Microencapsulation Market - Forecast(2023 - 2028)

Microencapsulation Market Overview

Microencapsulation market size is forecast to reach US$6.5 billion by 2027 after growing at a CAGR of 4.5% during 2022-2027. Globally, the increasing usage of microencapsulation in the pharmaceutical & healthcare industry for controlled and targeted drug delivery and release of active compounds is set to drive the market growth. Rising demand for microencapsulation from the food & beverage industry for coloring, flavoring, and also for ethyl cellulose and polysaccharides as coating materials, due to their easy approval by regulatory authorities, for being non-toxic is also driving the market growth. Additionally, strong growth in the cosmetics industry, and increasing demand for microencapsulated fragrances in the household & personal care products is anticipated to boost the growth of the microencapsulation industry over the projected timeframe.

COVID-19 Impact

The COVID 19 outbreak widely affected the pharmaceutical & healthcare, and food & beverage industries over 2020. Owing to the nationwide lockdown, the production process of various products in these industries declined due to the non-functioning of the manufacturing plants. Economies of each sector got affected and resulted in stagnation of activities across the sectors that use microencapsulation. Business communities even faced several issues related to raw material shortage, labor shortage, and temporary closure of operations, supply chain disturbance, and many more. However, COVID-19 palindrome and nationwide lockdown had a lesser impact on the pharmaceutical & healthcare industry, since there was a significant increase in drug production and sales, occurred during the COVID-19 epidemic wave, has positively affected the growth of the microencapsulation market.

Report Coverage

The report: “Microencapsulation Market – Forecast (2022-2027)”, by IndustryARC, covers an in-depth analysis of the following segments of the microencapsulation industry.

By Technology: Chemical Process (Interfacial Polymerization Methods, In Situ Polymerization Methods), Physiochemical Process (Coacervation phase Separation, Complex Emulsion, Meltable Dispersion, Powder Bed Methods), Mechanical Process (Air-Suspension Method, Pan Coating, And Spray Drying, Spray Congealing, Micro-Orifice System, Rotary Fluidization Bed Granulator Method, Spheronization), Electrostatic Process, and Others

By Core Material: Liquid (Dispersed Material, Dissolved Material), Solid (Active Constituents, Stabilizers, Diluents, Excipients, Release-Rate Retardants or Accelerators), and Others

By Coating Material: Polyvinyl Alcohol, Gelatin, Ethyl Cellulose, Cellulose Acetate Phthalate, Styrene Maleic Anhydride and Others

By Application: Cosmetics, Oils, Colorings, Flavorings, Sweeteners, Microorganisms, Agrochemical (Insecticides, Pesticides, Microbiocides, Others), Drugs, Biotech, and Others

By End-Use Industry: Pharmaceutical & Healthcare, Food & Beverages (Confectionery, Meat/Poultry, Dairy, Condiments, Others), Household & Personal Care, Textile & Apparel, Agriculture, and Others

By Geography: North America (USA, Canada, and Mexico), Europe (UK, Germany, France, Italy, Netherlands, Spain, Russia, Belgium, and Rest of Europe), Asia-Pacific (China, Japan, India, South Korea, Australia and New Zealand, Indonesia, Taiwan, Malaysia, and Rest of APAC), South America (Brazil, Argentina, Colombia, Chile, and Rest of South America), Rest of the World (Middle East and Africa)

Key Takeaways

• The North America region dominates the microencapsulation market owing to the rising growth and increasing investments in the food & beverage industry. For instance, according to the Government of Canada, in 2021, government of Canada and Ontario invested, US$ 6 million, in food and beverage processors projects in Ontario, to improve operations, and adapt challenges after the pandemic.
• Rapidly rising demand for microencapsulation in pharmaceutical & healthcare industry, to increase the bioavailability of drugs, and dietary supplements, is estimated to drive the microencapsulation market growth.
• The increasing demand for microencapsulation in the agrochemical industry for the production of insecticides and pesticides is considered to be the critical factor driving the growth of the microencapsulation market in the upcoming years.
• However, instability of microencapsulation of the products in varying atmosphere can hinder the growth of the microencapsulation market in the forecast period. 
  

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Microencapsulation Market Segment Analysis – By Technology

The mechanical process segment held the largest share in the microencapsulation market in 2021. The spray drying procedure in mechanical process is excessively being used in microencapsulation, due to the quick processing at cheaper rates and the possibility of large-scale production in the continuous mode. The mechanical process also have an excellent encapsulation efficiency, a number of choices in coating material, and stability of the finished product as compared with other processes. Additionally, spray drying method are largely applied in the huge scale production of food and pharmaceutical grade microencapsulation. Thus, with the rising demand for spray drying method in mechanical process segment, the market is anticipated to rise over the forecast period.

Microencapsulation Market Segment Analysis – By Coating Material

The ethyl cellulose segment held the largest share in the microencapsulation market in 2021. Ethyl cellulose is applicable in pharmaceutical & healthcare sector as a coating material, flavoring fixative, filler, drug carrier, film-former, binder, and stabilizer. It is one of the most widely used water-insoluble polymers for the coating of solid-dosage forms, as compared to other coating materials. Ethyl cellulose has the ability to withstand the release of drugs. This coating, on organic application, can accommodate the swelling matrix, as compared to aqueous coating, to a greater extent and hence, coating rupture and subsequent drug release is prevented. Thus, to modulate drug release profile and reduce drug release variability, ethyl cellulose as a coating material is required. Thus, with the rising demand for ethyl cellulose coating material due to its alluring properties, the microencapsulation market is anticipated to rise over the forecast period.

Microencapsulation Market Segment Analysis – By Application

The drugs segment held the largest share with 25% in the microencapsulation market in 2021, due to increasing health issues and modernization of healthcare infrastructure. In the healthcare sector, drugs and medical dyes are manufactured using microencapsulation. The growth in the R&D sector and the increasing government investments in pharmaceutical industry, will drive the market for microencapsulated drugs. For instance, according to the Pharmaceutical Research and Manufacturers Association (PhRMA), in the U.S., R&D in pharmaceuticals stood at US$ 75 billion, about more than half of the world's R&D, and also acquired a hold on the intellectual property rights on most of the new medicines. Microencapsulation is increasingly being used as a dietary supplement, in various countries, specifically among the younger population and athletes. Various organizations are focusing on improving the production of microencapsulation due to its effective and targeted drug delivery and to fulfill their growing demand. Rising government investment in drug manufacturing, and R&D activities, is predicted to uplift the microencapsulation market growth.

Microencapsulation Market Segment Analysis – By End-Use Industry

The pharmaceutical & healthcare industry held the largest share in the microencapsulation market in 2021 and is expected to grow at a CAGR of 5.1% during 2021-2026. Microencapsulation is a cost-effective option in pharmaceutical & healthcare industry for rising the bioavailability of drugs. The demand for microencapsulation is increasing, due to the immunity boosting power and health benefits, such as in dietary supplements, as it reduces the health threat possibility. The major usage of microencapsulation in the pharmaceutical & healthcare industry is in the protection of drugs from the surroundings, stabilizing sensitive drug substances, eliminating incompatibilities, and masking unpleasant taste. The need for microencapsulation is increasing rapidly in emerging economies such as in the United States, Canada, China, India, and other countries. Globally, with the rising government investments in the healthcare sector, the demand for microencapsulation of drugs is also estimated to rise. For instance, according to Invest India, the Indian healthcare market is expected to reach US$ 372 billion by 2022 from US$ 190 billion in 2020. Thus, the rising government investments in the pharmaceutical & healthcare sector is anticipated to drive the growth of the market over the forecast period.

Microencapsulation Market Segment Analysis – By Geography

North America region dominated the microencapsulation market with a share of 38% in 2021 and is projected to dominate the market during the forecast period 2022-2027. The increasing demand for medicinal drugs and increasing awareness about the value-added products for areas such as food, nutrition, personal care, and healthcare, has raised the demand for microencapsulation in the North American region. In North America, the microencapsulation market is also supported by the increasing investments by the government in the healthcare industry. For instance, according to the Government of Canada, in 2021, the government Invested US$46 Million in order to expand virtual health care services in Ontario. Thus, the rising government investments in the pharmaceutical & healthcare sector is anticipated to drive the growth of the market over the forecast period.

Microencapsulation Market Drivers

Increasing Demand for Microencapsulation in the Food and Beverage Industry

In the food and beverage industry, microencapsulation finds usage in colorings, oil, flavorings, sweeteners, and others. Microencapsulation uses coating materials such as ethyl cellulose, gelatin, styrene maleic anhydride, and polysaccharides in food and beverage industry, since these are non- toxic. Microencapsulation provides many advantages, such as preventing ingredient interactions, improving the stability of nutrients, and degradation. The increasing growth of the food and beverage industry will drive the demand for microencapsulation in the upcoming years. For instance, according to the China Chain Store & Franchise Association, China's food and beverage (F&B) sector reached approximately US$595 billion in 2019, with a 7.8 percent increase over 2018. Also, according to the Food Export Midwest USA, USDA’s Office of Agricultural Affairs (OAA) in Rome referred that, in 2019, Italy’s food retail sales reached US$145 billion, 1% more than in 2018. Thus, with the rising growth of the food and beverage sector, the market for microencapsulation is further projected to rise over the forecast period. 

Surging Demand for Microencapsulation with the Growth of the Agrochemicals Industry

The demand for agrochemicals made with microencapsulation to protect the crops from infectious diseases caused by insects and pests such as bacterial panicle blight and bacterial leaf scorch is expected to drive the microencapsulation market. Additionally, the rising urbanization with decreasing arable land generates the necessity for using agrochemicals to prevent the damage of the food crops. Moreover, increasing government initiatives to strengthen the agrochemicals sector is anticipated to surge the demand for microencapsulation. For instance, according to the Indian Brand Equity Foundation, in 2021-2022, the government plans to introduce production-linked incentives (PLI) scheme to promote domestic manufacturing of agrochemicals, with an allocation of US$ 32.2 million to the department of chemicals and petrochemicals. Thus, to protect the farm yield, the need to control the damage of farm output, and the increased investments by the government, the growth of the microencapsulation market is forecasted to rise. 

Microencapsulation Market Challenges

Instability of Microencapsulation in Varying Atmosphere Will Hamper the Market Growth

Optimization of the characteristics such as physical and chemical of microcapsules is important to achieve the stability of microencapsulation of the products. It is challenging for manufacturers to maintain this stability in varying environmental conditions such as temperature, humidity, and pressure. The characteristics of microcapsules such as permeability, cell viability, targeted delivery, shelf-life, controlled release, mechanical stability, and drug stability, are required to be optimized. Achievement of these parameters in order to attain stability is difficult due to the varying atmosphere. Challenges such as combination of moisture-sensitive ingredients with liquid food persists even after the usage of novel technologies. This is due to the humid atmosphere, in which it is difficult to achieve the required stability of microcapsules. Thus, instability of microencapsulation in a varying atmosphere will create hurdles for the market growth in the forecast period.

Microencapsulation Market Landscape

Technology launches, acquisitions, and R&D activities are key strategies players adopt in this market. Microencapsulation top 10 companies include:

1. Givaudan S.A.
2. International Flavors & Fragrances, Inc.
3. Encapsys, LLC
4. Reed Pacific Pty Limited
5. Firmenich Incorporated
6. Symrise AG
7. Ingredion Incorporated
8. BASF SE
9. Lubrizol Life Science Health
10. Koehler Innovative Solutions

Acquisitions/Technology Launches

• In 2020, Lubrizol Life Science Health (LLS Health) launched ASTAGILE microcapsules, its new sustainable, organic-certified, astaxanthin, microencapsulated with spirulina, to promote mental agility and support healthy ageing for young and senior adults.

Relevant Reports

Food Encapsulation Market – Forecast (2021 - 2026)

Report Code: FBR 39260

Personal Care Encapsulation Materials Market - By Type, By Application, By End Use and By Geography Analysis - Forecast 2020 – 2025

Report Code: CMR 29111

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