China is one of the major consumers of food-grade carbon dioxide in the Asia Pacific. Increasing demand from the food export industry, coupled with increasing domestic consumption, is expected to augment the market growth over the forecast period. China is one of the world’s largest soft drink manufacturers and exporters, which has increased the demand for food-grade carbon dioxide in the country.
The increased demand for food-grade carbon dioxide has increased the competitive rivalry in the country with many domestic and international players trying to capture the increasing demand. For instance, in March 2021, Guanggang Gas acquired Linde Wuhu Carbon Dioxide Company for an undisclosed amount. The acquisition included East China’s largest carbon dioxide plant, with an annual production capacity of 100,000 tons of food and industrial-grade carbon dioxide. The company also announced its plans to expand the facility and add dry ice to its product portfolio.
The growing adoption of carbon dioxide-based refrigeration systems is a positive indicator of the CO2 market in Japan. The consumption of soft drinks in Japan has reduced in the last few years owing to rising awareness concerning their side effects on health. However, companies are investing in R&D and developing healthier alternatives to keep up with the changing preferences of customers in the country.
Application Insights
The freezing & chilling segment accounted for the largest revenue share of 39.7% in 2022. CO2 is used in freezers and heat exchangers as a coolant within the food processing industry. Many food products are required to be at a specific temperature during the production process to ensure the quality of the product. Freezers and chillers are used in such instances to regulate the temperature in the production facility.
Freezers need a coolant gas to operate. Traditionally chlorofluorocarbons (CFCs) and hydro chlorofluorocarbons (HFCs) were used as the coolant gas. However, the use of CFCs and HFCs are being phased out due to the high environmental damage caused by them. Carbon dioxide gas is being used in freezers due to its cooling properties and less harm to the environment.
Asia Pacific Food Grade Carbon Dioxide Market share and size, 2022
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The packaging segment is expected to grow at the fastest CAGR of 6.8% over the forecast period. The food packaging industry uses carbon dioxide as a flushing gas. Food items generally have a short shelf life as the food gets oxidized and destroyed by bacteria, which makes it inedible. An inert gas is used to flush the food packaging to remove the oxygen present in the container.
Carbon dioxide is injected into beverages to impart a sparkly texture to the drink. Beverages that use carbonation in their production process are sugary carbonated beverages and alcoholic beverages such as beer and sparkling wine. In March 2020, Anheuser-Busch InBev opened its largest brewery in the Asia Pacific. The brewery is located in China and has a production capacity of 1.5 million tons per year.
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Source Insights
Based on source, the Asia Pacific food grade carbon dioxide market is divided into dairy and frozen products, beverages, meat, poultry, and others. The dairy and frozen products segment accounted for the largest revenue share of 31.9% in 2022. Carbon dioxide is widely used for packaging, preserving, and maintaining the freshness of dairy and frozen products.
Packaging dairy and frozen products with a carbon dioxide atmosphere slows mold growth in dairy products and prevents rancidity and spoilage during transportation. Vacuum packaging is also used as an alternative to modified atmosphere packaging. It is unsuitable for certain dairy products such as yogurt and cream cheese and is harder to open making them not preferable. The consumption of dairy products is on the rise in the Asia Pacific with many people buying prepackaged dairy products in stores.
The meat segment is anticipated to grow at the fastest CAGR of 6.6% over the forecast period. Meat products are particularly susceptible to spoilage from microbial growth in food products and require active preservation measures to increase their shelf life. Carbon dioxide is used during the packing of the meat to slow down microbial growth. Rising income levels in the region have increased the demand for meat as more people can afford to eat it which has led to increased demand for food-grade CO2 for meat preservation.
The beverage industry is one of the largest consumers of food-grade carbon dioxide in the Asia Pacific as carbon dioxide is used in carbonated beverages. The beverage industry is significantly growing in Asia Pacific with many companies establishing bottling facilities. For instance, in April 2022, PepsiCo completed the construction of its largest bottling plant in India. The plant is located in Bihar and can produce 16.22 million cases of carbonated soft drinks every year.
Carbon dioxide is an essential component in large-scale poultry farming as carbon dioxide is used in every stage of a chicken’s life cycle to maximize production. Carbon dioxide is used as a blanket gas over eggs to regulate their temperature and optimize the hatching time. Carbon dioxide is also used in chicken coops to slow down their metabolism and shorten the time required for chicks to transform into broilers or egg-laying hens.
Food grade carbon dioxide is used in other applications such as a propellant agent in aerosol cans. Many food items such as vinegar, olive oil, fruit creams, and cooking sprays are sold in aerosol cans which propel the food when the valve is opened. Pressurized carbon dioxide is used as a propellant in cans as it does not react with food in the container and does not have a risk of explosion.
Regional Insights
China accounted for a significant revenue share of 38.1% in 2022. China is one of the major consumers of food-grade carbon dioxide in the Asia Pacific. Increasing demand from the food export industry, coupled with increasing domestic consumption, is expected to augment the growth. China is one of the world’s largest soft drink manufacturers and exporters, which has increased the demand for food-grade CO2 in the country. The increased demand for food-grade carbon dioxide has increased the competitive rivalry in the country with many domestic and international players trying to capture the increasing demand.
Thailand is expected to grow at the fastest CAGR of 5.4% over the forecast period due to increasing demand for beverages, a growing need for modified atmosphere packaging (MAP), and rising exports of packaged food. The meat industry in Thailand is comparatively small, however, it is high in terms of value. According to a report published by Meat & Livestock Australia (MLA) in 2021, in Thailand, consumption per capita for fish, chicken, pork, beef and sheep was 41.0%, 41.0%, 15.0%, 3.0%, and 0.1% respectively.
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