Aroma Chemicals Market Size, Share & Trends Analysis Report By Source (Natural, Synthetic), By Chemical, By Application (Flavors, Fragrances), By Region, And Segment Forecasts, 2021 - 2028

Report Overview

The global aroma chemicals market size was valued at USD 5.2 billion in 2020 and is expected to expand at a compound annual growth rate (CAGR) of 3.5% from 2021 to 2028. The demand for the product is anticipated to be driven by increased consumption of flavors and fragrance products in the food and beverages, soaps and detergents, and cosmetics and toiletries industries.

Technological innovation in the market for extraction of aroma chemicals, and a surge in R&D activities among key industry participants have contributed to the growing varieties of customized aroma chemicals for targeted applications. Manufacturers are also focusing on backward integration to maintain uninterrupted raw material supply and reduce the operational cost of the final product. These factors have substantially contributed to the product’s demand.

The aroma chemical manufacturers are focusing on developing natural products to comply with stringent environmental norms. Additionally, consumers are increasingly becoming more aware of the product benefits, which has compelled the suppliers to maintain high-quality levels by integrating themselves into production.

Taste being a prominent factor in the case of edible items, aroma chemicals are used to enhance the taste in processed food and beverages. Increasing demand for health and wellness foods, government regulations, ban on the use of synthetic flavors are fuelling the growth of natural aroma chemicals. The suitability of natural flavors in wider applications, additional health benefits of certain natural flavors, and advanced technological innovation are the key factors driving the market for aroma chemicals.

Aroma chemicals are extensively used for the production of additives for food and beverage, health, and personal care products, thus establishing a stable market. Further, with respect to the overall product market scenario and evolving consumer demands, the chemical manufacturers are focusing on producing a natural type of aroma chemicals offering flavors similar to synthetic flavoring agents to gain a competitive advantage in the industry.

As these products are used as a base ingredient in formulating quality flavors and fragrances, the end-users including Procter & Gamble, Shiseido, L’Oréal, Unilever, Cargill, Incorporated, Delfi Limited, McKee Foods, Dean Foods Company, The Coca-Cola Company, and Nestlé, among others are market leaders in the food and beverages, personal care and cosmetics, and soaps and detergent industries.

Source Insights

The synthetic source segment dominated the market for aroma chemicals and accounted for the largest revenue share of 68.6% in 2020. This is attributed to the growing demand for synthetically produced aroma products in food and beverages, personal care, and cosmetics. Synthetic aroma chemicals emerged as the highest source to obtain the product as they are produced using the updated technologies in the ingredients industry. The products involve different categories of chemicals to reproduce the natural scents of various flavors.

Additionally, naturally derived aroma chemicals are observed to be a prominent source for flavors and are extracted from pine trees by natural extraction methods. Globally, consumers are getting aware of the effects of artificial additives and ingredients in food products.

Natural flavors can interact with other ingredients in unexpected ways. Also, natural flavor or scents can sometimes be difficult to produce as various natural ingredients do not have the capacity required for blending with the other fragrances. However, the high costs required for the manufacturing of natural flavors is restraining market growth.

Chemical type Insights

The terpenes and terpenoids chemicals segment dominated the market for aroma chemicals and accounted for the largest revenue share of 37.4% in 2020. Its high share is attributable to its natural availability and the increased utilization of terpenes resin in paints and printing inks, pressure-sensitive tapes, rubber adhesives, and chewing gums.

Terpenes also play an essential role as fragrances and flavoring agents for several end-use applications. The food and beverages and rubber industries hold a major share in the consumption of terpenes. However, a low supply of terpenes in a few areas along with the high cost of extraction is estimated to hamper the market growth.

Furthermore, the benzenoids segment is growing rapidly owing to their increasing commercial importance. They are being utilized, owing to their fragrance, in various applications such as soaps and detergents, cosmetics and personal care products, food and beverages, and other household products.

Application Insights

The fragrance application segment dominated the market for aroma chemicals and accounted for the largest revenue share of 68.9% in 2020. Its high share is attributable to the growing demand for unique fragrances and growth in emerging application areas such as men’s fragrance, cosmetics, and others. Considering the availability of unique ingredients for fine fragrances formulations, the products are estimated to witness substantial demand over the forecast period.

The high demand for natural flavoring products is a prominent driver for the product manufacturers. Further, emerging economies are expected to have great potential for the aroma chemicals market. Factors such as growing disposable income, increasing demand for beverages and processed foods, the rising popularity of exotic flavors, and surging demand for several food applications such as confectionery, convenience foods, bakery, and dairy, among others are expected to drive the demand.

The fine fragrance market is driven by the high demand for organic perfumes, unique fragrances, and increasing consumer awareness about organic products. Organic perfumes are certified by PETA and are completely vegan. In addition, they have their certifications from the USDA, which assures the consumers that the perfumes are made from ingredients that are assumed safe, tested, pure, and free from harmful dyes, petrochemicals, pesticides, solvents, and alcohol. The surge in demand for organic perfumes and organic personal care products from consumers is anticipated to contribute to the segment growth in the near future.

Regional Insights

Asia Pacific dominated the market for aroma chemicals and accounted for the largest revenue share of 30.1% in 2020. The market is anticipated to witness a CAGR of 5.2% from 2021 to 2028. This is attributed to the increasing demand for flavors and fragrances from major economies including India, China, and Japan.

The product market is expected to grow moderately in countries such as the U.S. and Canada owing to rising demand for low carbohydrate and low-fat food and beverage products and consumer goods coupled with expanding food processing industry. Rising consumer preference toward a healthy lifestyle has increased the demand for healthy foods as well as organic cosmetics in North America, which is expected to trigger the demand for aroma chemicals in the near future.

Furthermore, Europe emerged as a significantly growing market for the product, and this trend is expected to continue over the forecast period owing to the rapid growth of the personal care and cosmetics market along with a surge in the adoption of natural aroma chemicals in various applications such as soaps and detergents and beverage industries.

Key Companies & Market Share Insights

The market players are continuously focusing on capacity expansions and Chemical companies are managing their large bases of customers by partnering with other companies to develop distribution networks across diverse geographies to ensure optimal coverage. For instance, in 2019, SammChem, a subsidiary of Azelis (a distributor of specialty chemicals and food ingredients), partnered with BASF SE. Through this new partnership, the company distributes aroma ingredients to the flavors and fragrances market. The demand for the product from the end-use industry is anticipated to show a continuously growing trend over the forecast period. Manufacturers are focusing intensely on improving their product portfolios along with the introduction of natural products aimed at keeping pace with future requirements for sustainable development. Some of the prominent players in the aroma chemicals market include:

• Privi Organics India Limited

• BASF SE

• Kao Corporation

• Takasgo International Corporation

• Givaudan

• Bell Flowers & Fragrances

• Symrise

• S H Kelkar and Company

Aroma Chemicals Market Report Scope

Segments Covered in the Report

This report forecasts revenue growth at global, regional, and country levels and provides an analysis of the latest industry trends in each of the sub-segments from 2017 to 2028. 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, 2017 - 2028)

  • Natural

  • Synthetic

  • Natural-identical

• Chemicals Outlook (Volume, Kilotons; Revenue, USD Million, 2017 - 2028)

  • Benzenoids

  • Musk Chemicals

  • Terpenes & Terpenoids

  • Others (Ketones, Esters, Aldehydes)

• Application Outlook (Volume, Kilotons; Revenue, USD Million, 2017 - 2028)

  • Flavors

    • Confectionery

    • Convenience Food

    • Bakery Food

    • Dairy Products

    • Beverages

    • Others

  • Fragrance

    • Fine Fragrance

    • Cosmetics and Toiletries

    • Soaps and Detergents

    • Others

• Regional Outlook (Volume, Kilotons; Revenue, USD Million, 2017 - 2028)

  • North America

    • U.S.

    • Canada

    • Mexico

  • Europe

    • Germany

    • U.K.

    • France

    • Italy

    • Spain

  • Asia Pacific

    • China

    • India

    • Japan

    • South Korea

  • Central & South America

    • Brazil

    • Argentina

  • Middle East & Africa

    • Saudi Arabia

    • South Africa