The global saffron market size is expected to reach USD 1.6 billion by 2027, registering a revenue-based CAGR of 7.3% over the forecast period.
The growing food industry, improved standard of living, and increasing consumer disposable income are likely to trigger the demand for saffron products over the coming years. It is majorly used in the food industry to add flavor, aroma, and color to the food products.
According to the UN statistics, global population has increased from 1.8 billion in 1915 to 7.6 billion people in 2020. Population growth along with increasing disposable income in developing countries is driving the global food demand, which is expected to create a positive impact on the crops production, including saffron.
Expansion of healthcare sector is anticipated to remain a driving force for the market over the forecast period. Saffron has crocin and safranal that are known to cure various types of diseases. It is used in several herbal and pharmaceutical drugs owing to rising awareness among consumers regarding health benefits of saffron.
Saffron falls under expensive range of products due to which fraudulent practices of selling adulterated products occur at large. These practices are likely to hamper the market growth over the forecast period. Adulteration is done by mixing beet or pomegranate fibers, dyed silk fibers, or stamens of the saffron crocus itself. Some other methods of adulteration include dipping the threads in honey or vegetable oil to give it a non-bitter taste and adding turmeric, paprika, and other fillers to its powder.
Labor intensive harvesting process and volatility in climatic conditions are other challenges for the saffron producers and is projected to affect cultivation in some regions. The production requires climatic conditions such as dry and hot summers, snowy winters, and 300 mm of rain during growth period. These factors affect the prices of final products and are likely to create short-term challenges for the market.
Government regulations and initial capital investment is anticipated to restrict entry of new players in the saffron market. Compared to initial investment in the saffron business, the yield of final products is very less, which makes it difficult to achieve profit in the initial phase of business. Regulations pertaining to purity and quality of saffron products are also likely to obstruct the new entrants in the market.
Further key findings from the report suggest:
Food application accounted for the highest revenue share and was valued at USD 485.7 million in 2019. The growing population in Asian and Middle East countries is likely to boost the product demand
In terms of volume, medical application accounted for a share of 23.9% in 2019. This segment is anticipated to be impacted by rising R&D expenditure on saffron compounds
The cosmetics application segment is projected to expand at revenue-based CAGR of 6.7% from 2020 to 2027. Improvement in living standards coupled with heavy marketing by cosmetics companies is projected to drive the segment growth
In terms of volume, Asia Pacific dominated the global saffron market and is anticipated to maintain its position during the forecast period owing to expansion of medical sector and increase in health expenditure
Europe is projected to attract significant demand for products over the forecast period on account of growth of cosmetics and food industries and advancement of healthcare sector