Aroma Chemicals Market Size, Share & Trends Analysis Report By Source (Natural, Synthetic), By Chemical (Terpenes & Terpenoids, Benzenoids, Musk Chemicals), By Application (Flavors, Fragrances), And Segment Forecasts, 2020 - 2027

Report Overview

The global aroma chemicals market size was valued at USD 5.5 billion in 2019 and is expected to grow at a compound annual growth rate (CAGR) of 5.8% from 2020 to 2027. Growing demand from the food and beverage as well as the fragrance industries is expected to be a major factor driving the market. Rapid urbanization, coupled with increased consumer spending, has led to augmented demand for innovative and attractive flavors from the food and beverage industry. The fragrance is a prominent factor, along with taste inedible items, aroma chemicals are used to enhance the taste in processed food and beverages. Increasing demand for health and wellness foods, regulations, and a ban on the use of synthetic flavors are triggering the growth of natural aroma chemicals. Suitability of natural flavors in wider applications, additional health benefits of certain natural flavors, and advanced technological innovations are the key factors driving the market.

The basic raw materials required for producing aroma chemicals are pine trees, petrochemicals, and musk. Key players in the market are mostly integrated across the value chain from manufacturing to distribution in order to maintain the quality of raw material. Owing to this, key players are gaining a competitive advantage regarding cost benefits with an increased profit margin.

To study the development of improved processes, key players are spending a significant amount on R&D. The competition to develop unique and innovative products is leading to high R&D expenses, thus increasing the manufacturing cost in the fragrance industry. Increasing R&D expenses are thus expected to hamper the market growth.

Source Insights

Synthetic aroma chemicals accounted for the largest revenue share of 73.9% in 2019 and are anticipated to maintain their lead over the forecast period. Synthetic aromas are witnessing augmented demand from the personal care, cosmetics, and food and beverage industries. Synthetic aroma chemicals are still preferred over natural chemicals by cosmetics and personal care formulators as the use of synthetic ingredients can produce a strong scent without hampering the characteristics of other chemicals used in cosmetic formulations. Moreover, skin sensitivity, along with an increasing number of allergies among individuals due to the use of natural aroma chemicals, has now compelled the cosmetics manufacturers to rely on synthetic sources.

Natural aroma chemicals are considered to be therapeutic, sustainable, and greener by consumers. As the natural aroma products raise the spirit of healthy and green sustainability among consumers, their demand in the global market is expected to grow at a large scale. However, lack of availability of raw materials, along with the high cost to produce fragrance by natural aroma chemicals, will hamper the growth of natural aroma chemicals during the forecast period.

Application Insights

Fragrance accounted for a revenue share of almost 69.0% in 2019 and is anticipated to maintain its lead over the forecast period. The synthetic flavorings segment is a prominent driver for the flavor manufacturers owing to its low cost than the natural flavors. The emerging economies are estimated to have great potential for the flavors market. Major factors driving the flavor market are growing disposable income, increasing demand for beverages and processed foods, the growing popularity of exotic flavors, and rising demand for various food applications.

The growing popularity of authentic aromas in the food and hospitality sectors is expected to augment market growth over the coming years. Rising demand for natural personal care products created using various aromas is expected to foster market growth. Increasing public awareness related to health and hygiene, coupled with a growing preference for organic and natural ingredients, is projected to boost product demand.

Aroma chemicals are widely utilized in the animal feed industry. For instance, cinnamaldehyde and vanillin are prominently used for animal feed products. In addition, carvacrol and thymol are used for animal feed mixes owing to their flavoring potentials.

Chemical Insights

Terpenes & Terpenoids emerged as the largest chemical segment with a volume share of over 30.0% in 2019. Terpenes & Terpenoids possess effective medical properties, such as antiseptic, anti-carcinogen, and antimicrobial properties. Continuous usage of terpene for pharmaceutical and nutraceutical applications is estimated to propel the segment growth. 

Musk chemicals are a special type of aroma chemicals that are extracted naturally as well as synthetically. Natural musk is obtained from animals and plants, which include roots as well as seeds, the rump gland of the musk deer, muskrat, and civet cat. Musk chemicals find wide scope in different applications, such as soap and detergent, cosmetics and personal care, food, and household products.

Some of the prominent market trends for the musk chemicals market are the increasing number of working professionals, the growing middle-class population, and raising awareness. The rising popularity of different types of personal care items and fine fragrances is expected to trigger the demand for musk chemicals over the forecast period. New product innovation and the increasing popularity of various types of perfumes and cosmetic items are anticipated to fuel the demand for musk chemicals over the forecast period.

Regional Insights

Asia Pacific emerged as the largest regional market for aroma chemicals with a revenue share of 29.6% in 2019 and is expected to dominate the market over the forecast period. Developing countries like China, India, and Japan are also estimated to witness positive growth in the near future. Moreover, increasing demand for flavors and fragrances from the developing countries, such as China, India, and Japan, are triggering the demand for aroma chemicals in the region. The market for flavors varies in different countries as the consumers have different taste preferences.

Asian flavors and fragrances have also gained increased popularity in the major regions, such as North America and Europe. China, India, Indonesia, and Vietnam are among the prominent food flavors markets in the Asia Pacific region. Many manufacturing companies are focusing on investments in R&D facilities and the expansion of their business in the Asia Pacific region.

India is one of the largest emerging economies in the Asia Pacific region. Demand for aroma chemicals is estimated to increase in India owing to rising demand from manufacturing companies for the production of soap and detergents and home care products. The high spending power of the consumers in the country is another factor contributing to the growth of the market in India.

The market in North America is expected to be stable in countries, such as the United States, Canada, and Mexico, owing to growth in the consumer goods and food processing industries. The growth in developed countries is predicted by trends, which support mergers in the end-use industries. The market growth in developed countries is estimated to be slow as compared to the developing countries.

The U.S. held the largest share in the North American market in terms of revenue in 2019 owing to growth in the cosmetics and personal care market. Moreover, an increase in the disposable income in the country is anticipated to fuel the demand for cosmetics, personal care products, and food and beverages that will further trigger the demand for the aroma chemicals.

However, a few inflexible regulations by the U.S. government taking into account the contamination caused during the production of aroma chemicals can hamper the growth of the market in the country over the forecast period.

Key Companies & Market Share Insights

Leading manufacturers have been present in the industry for a very long time and have huge production capacities. However, owing to the augmented product demand, these players are focusing on acquisition, expansion, and investment strategies to enhance their product portfolio and meet the growing demand from the end-use markets. New market entrants are seeking greater opportunities in the global market. Companies attempting to establish themselves in the market have to compete with the existing multinationals. Consumers are increasingly becoming more aware of the product benefits, which has compelled the producers to develop high-quality, sustainable, and affordable products. In addition, these players observe high integration across the value chain and are involved in raw material sourcing to the distribution of finished products. Some of the prominent players in the aroma chemicals market include:

• BASF SE

• Bell Flavors & Fragrances

• Givaudan

• Kao Corporation

• Symrise

• Takasago International Corporation

Aroma Chemicals Market Report Scope

Segments Covered in the Report

This report forecasts volume and revenue growth at the global, regional, and country levels and provides an analysis of the latest industry trends and opportunities in each of the sub-segments from 2016 to 2027. For the purpose of this study, Grand View Research has segmented the global aroma chemicals market report on the basis of source, chemical, application, and region:

• Source Outlook (Volume, Kilotons; Revenue, USD Million, 2016 - 2027)

  • Natural

  • Synthetic

• Chemical Outlook (Volume, Kilotons; Revenue, USD Million, 2016 - 2027)

  • Terpenes & Terpenoids

  • Benzenoids

  • Musk Chemicals

  • Others

• Application Outlook (Volume, Kilotons; Revenue, USD Million, 2016 - 2027)

  • Flavors

    • Confectionary

    • Convenience Food

    • Bakery Food

    • Dairy Products

    • Beverages

    • Others

  • Fragrances

    • Fine Fragrances

    • Cosmetics and Toiletries

    • Soaps and Detergents

    • Others

• Regional Outlook (Volume, Kilotons; Revenue, USD Million, 2016 - 2027)

  • North America

    • The U.S.

    • Canada

    • Mexico

  • Europe

    • Germany

    • The U.K.

    • France

  • Asia Pacific

    • China

    • India

    • Japan

  • Central & South America

    • Brazil

  • Middle East & Africa

    • Saudi Arabia