iCrowd Newswire – Jul 23, 2020
Flavors and Fragrances Market size in 2019 is $28 billion, and is growing with a CAGR 6.2% during the forecast period 2020-2025. Increasing demand for flavor ingredients across food and beverage applications is driving the market. Natural flavor and fragrance ingredients are derived from spices, herbs or other naturally available crops through a process of extraction either solvent-based or supercritical. In addition the use of flavors in bakery and confectionary to produce aroma is further propelling the market during the forecast period 2020-2025.
By Ingredients – Segment Analysis
By Ingredients, Natural segment is projected to be the fastest growing with a CAGR 5.80% during the forecast period of 2020-2025. By Ingredients the flavor and fragrance ingredient market is segmented into Natural, and Synthetic. The synthetic ingredients segment is estimated to be the dominant segment owing to its low cost and prominent usage in various end-use products. Synthetic ingredients include aroma chemicals such as esters, aldehyde, phenol, and others. Some popular natural ingredients are botanical extracts from various plant sources such as guaiac wood, citrus oils, and others. The flavors provide taste and aroma to various food & beverage products. There is also an increasing demand for natural ingredients in the production of both flavors and fragrances.
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By Application- Segment Analysis
By Application, the Beverage segment is estimated to be largest in the market in 2019. Increasing market penetration and product development of health and energy drinks is a major factor leading to the dominance of this segment. Furthermore, the launch of beverages constituting health and functional ingredients is a major factor driving the demand for beverages. Rapid urbanization, growth of disposable income availability of convenience goods coupled with growing health concerns are further contributing to the industry growth. Additional factors such as the awareness among government and consumers to address specific health and nutritional needs are strongly fueling the food and beverage market, which in turn is boosting the flavor and fragrances market. In addition, the demand for new variants especially in health food and beverages keeps the market growing, a trend which is expected to continue in the coming years. The high demand for various consumer products is increasing with the rise in disposable incomes; organized retail chains; and changing lifestyles.
Geography- Segment Analysis
North America accounts for 35% of the Flavors and Fragrances Ingredients Market share in 2019 owing to a steady increase in the disposable income of the population in the region. A high percentage of people here are consuming processed & packaged foods. Increasing consumption of such foods in various flavors is contributing to higher demand for such flavor and fragrance ingredients. Another factor that has further contributed to the growth of this market in the region is efficient distribution channels. The fragrances ingredients market growth has been largely dependent on distributors who are bridging the gap between fragrances manufacturers and consumers. Their role has been indispensable in assuring the growth of the flavors and fragrances ingredients market in the North American region. Furthermore, the increasing demand for flavor and fragrances in pharmaceutical, energy drinks and nutraceuticals are further contributing to the dominance of this region in the market.
Drivers – Flavor and Fragrances Market
Increasing disposable income
With a major share of the population belonging to the working class, their purchasing power has increased along with the availability of disposable income. Also, changes in lifestyle have increased the demand for consumer goods and personal care products. High income and lifestyle changes have led to a rise in the use of higher-end products for health or leisure applications. People are more into aromatherapy and such procedures for relieving stress. Such products tend to be expensive. Also, natural products are also more costly but increased demand along with income for such products does not restrict their sales.
Rising demand for essential oils and fragrances
There is a surge in the demand for personal care products. Increased sanitary and hygiene consciousness has led to a rise in the use of perfumes and deodorants as well. Fine fragrances are now considered an essential part of personal hygiene. Thus increasing demand for fragrances across the world is also said to be driving the growth of Flavors and Fragrances Ingredients Market. Apart from providing a pleasant smell, aromatherapy oils can provide respiratory disinfection, decongestant, and physiological benefits. In addition inhaling, essential oils stimulate the olfactory system, the part of the brain connected to smell including the nose and brain. Furthermore, it boosts energy levels, relieves headaches, calm nerves while retaining focus, relieves pain in muscle pain and joints.
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Challenges – Flavors and Fragrances Ingredients Market
Irregular supply of raw materials results in price fluctuations that have led to increased use of synthetic ingredients. However, with rising awareness of natural products and their demand, synthetic materials cannot meet this requirement in the long run. This provides a threat, in perfumery, essential oil products, and such others. The high cost of production and selling prices of these natural products also further challenge the market growth. Furthermore stringent regulations on the use of artificial flavors in food by regulatory bodies such as the FDA are hindering the market growth.
Flavors and Fragrance Ingredient Market Industry Outlook
Flavor and Fragrance Ingredient top 10 players are Givaudan, Firmenich, International Flavor and Fragrances, Symrise, Takasago, Sensient, Mane, Robertet, Bell Flavors and Fragrances, Kerry, T.Hasegawa and others.
In January 2020, Sleep Score Labs the company behind the world’s most comprehensive suite of data-backed sleep solutions collaborated with International Flavors & Fragrances (IFF), a leading innovator of taste, scent, nutrition, and ingredients, to create and validate products designed to support healthier lives through improved sleep.
In February 2019, McCormick & Company collaborated with IBM pioneering the use of artificial intelligence in Flavor and Food Product development.
In January 2020, Blue Pacific Flavors collaborated with McCormick & Co to provide Flavor Cells encapsulation technology to provide high-impact, encapsulated flavor delivery in powdered beverages, confectionery, and bakery products.
Rising demand of fragranced personal care and household products is also said to be driving the Flavor and Fragrance Ingredients Market during the forecast period 2020-2025.
Rapid urbanization, increased availability of disposable income to purchase goods are further contributing to the growth of this market.
North America dominated the flavor and ingredient market due to the rising demand of fragrances, as well as food and beverages flavoring in that region.
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