Dehydrated Onions Market to Grow at CAGR of 4.8% through 2028

The global dehydrated onions market holds promising growth prospects over 2018-2028, indicates Future Market Insights

Extensive use of dehydrated onion as a condiment will continue to fuel the demand from Western countries. As the recent past has been observing substantial growth of the convenience food sector, the growth of dehydrated onions market is also evidently increasing. As implied by a recent research study, Future Market Insights expects the US$ 950 Mn dehydrated onions market to surpass the revenue worth US$ 1,500 Mn by the end of 2028. Over the next decade, the global market for dehydrated onions is expected to witness steady growth at a CAGR of 4.8%.

India’s Position Strengthens as an Export-oriented Market, Europe Prevails in Dry Onion Import

China, India, and US are among the top five onion producing countries, and India secures the top position in dried onion export, according to a recent survey. While India currently captures over 30% share of the global dehydrated onion export share, China will also continue to be a major exporter. US, Germany, and UK are foreseen to retain their positions as key importers throughout the next decade. Australia is foreseen to be among the key importers of dehydrated onions in the next few years.

The European countries such as UK have been prominently generating robust demand for dehydrated onions, and some of the top importers include UK, Germany, Japan, Netherlands, Russia, and Spain. Sustained demand from developed markets such as North America and Europe will continue to push the dehydrated onions market up in near future. Increasing demand for processed onions to create thriving markets in developed regions such as Europe and North America. In some developing countries, fresh onions are available only in specific seasons, prompting at an attractive opportunity for dry onion manufacturers to provide consumers with an economical alternative in off-seasons. Kenya, where spring onions have been the top consumer preference due to cheaper price, is recently identified to raise an escalating demand for red bulb onions and dehydrated onions.

Manufacturers Target Lucrative Applications of Dehydrated Vegetables Emerging in Processed Food Industry

The consumption of dehydrated vegetables is mushrooming worldwide, primarily attributed to their ability to retain culinary palatability and quality. Moreover, dry vegetables bring in economy in terms of both storage as well as transportation. The onion and dehydrated onion manufacturers thus seek optimum utilization of surplus product, besides saving a considerable amount associated with packaging materials and tinplate. Acceptance of dehydrated vegetables as a streamline product over fresh foods is remarkably low within a majority of developing Asian economies. However, with an increasing number of manufacturers stepping in the dehydration industry and growing awareness among consumers about a series of health benefits of consuming dehydrated vegetables, the sales of different forms of dehydrated onions are expected to surge up in coming years.

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The industry has witnessed immense advent of technology incorporated in the entire production process of dehydrated onions, which will also contribute to market growth. Dry vegetables are rapidly gaining traction as an imperative ingredient in packaged foods, which is proliferating the consumption of dehydrated onions by processed food industry, which will reportedly drive the market growth.

Market Can Potentially Cater to Elevating Onion Demand against Short Supply during India’s Price Escalation Scenario

India, in addition to being among the top five onion producers, is the second largest producer of dehydrated onions, globally. However, the volatility in pricing of onion provides a high-potential opportunity to promote consumption of dry onions, almost each year. Though onion prices continue to fluctuate due to seasonal pressure, dehydrated onion sales are not hitting the roof. Dry onion manufacturers are struggling to overcome a lost opportunity due to relatively lower awareness about consuming dry onions, through promotional efforts targeted to households. However, robust demand from ready-to-cook food providers, processed food manufacturers, hotels and restaurants, and large scale masala makers are expected to account for a robust share in terms of revenue.

An industry expert quotes, "Of the total 60,000-70,000 tons of dehydrated onions produced annually in India, nearly 85% are exported to European countries. Domestically based wholesale consumers account for the consumption of the rest 15% of the total produce. Revenue generated through demand from household consumers has been negligible." "Looking at the price fluctuation, dry onions are relatively more stable than fresh onions. Dehydrated products can be stored for extended periods, and are economically more viable compared to fresh onions," he further adds.

One of the largest dehydration units in India also reaffirms that the price of dehydrated onions is not impacted by seasonal volatility in onion prices, as a majority of manufacturers prefer commencement of procurement at the beginning of season, when the prices are low. Gradually increasing encouragement from government is anticipated to support market growth, in addition to the financial support by the Agricultural and Processed Food Products Export Development Authority (Apeda) for awareness and promotional campaigns. Moreover, manufacturers are striving to promote dehydrated products as healthy foods, through augmented focus on research and development. Most of manufacturing companies are prioritizing export, trade, and production facility expansion.

Recommendation: For product sourcing and distribution, stakeholders in the retail sector are recommended to focus more on creating a robust and reliable supply chain network through horizontal integration and partnerships.

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