The global beverage flavoring system market size was estimated at USD 4.7 billion in 2020 and is expected to expand at a compound annual growth rate (CAGR) of 5.3% from 2020 to 2028. The availability of a wide variety of beverages such as sparkling drinks, juices, energy drinks, flavored milk, mocktails, smoothies, tonic water, beer, wine, cider, cocktails, hard alcohol, alcohol-free cocktails, spiked sodas, alcohol-free beers, and spirits and their increasing consumption is driving the demand for beverage flavoring system.
A flavoring system refers to the combination of varied ingredients such as flavoring agents, flavor carriers, flavor enhancers, preservatives, emulsifiers, and stabilizers among others. These ingredients enhance the flavor or taste of alcoholic and non-alcoholic beverages. The increasing awareness about the various ingredients among manufacturers along with their respective functionalities is driving the market.
The U.S. market was dominated by non-alcoholic beverages in 2020 attributed to availability of variety of non-alcoholic beverages in the country such as juices, mocktails, smoothies, refreshing drinks, and nourishing drinks. The country has high consumption rates of beverages and the increasing manufacturing capability of a variety of beverages from the manufacturers in order to meet the changing consumer demand for non-alcoholic drinks.
The demand for drinks that can complement or satisfy the need for well-being is projected to create potential demand in efforts to boost immunity against coronavirus. These drinks consist of ingredients that contribute to a healthy lifestyle. Holistic product solutions that promote long-term benefits for mental, physical, and emotional well-being are estimated to exhibit potential growth over the forecast period from 2020 to 2028.
The continuously rising stress level of people across the globe are boosting demand for drinks that can provide relief or boost mind and mood are projected to create potential growth in the near future. The ingredients such as botanicals, adaptogens, CBD, and L-theanine are used in manufacturing relaxation drinks. The calming effect of these drinks on the body and mind is estimated to create potential opportunities over the forecast period from 2020 to 2028.
The rising trend of marketing drinks and food on social media in an effort to inspire others is anticipated to create growth over the forecast period from 2020 to 2028. Increasing experiments for unusual combinations to create evolved taste and appearance are boosting the market for beverage flavoring systems. Particularly, in the non-alcoholic section, mocktails range including fruity, floral, sour, and spicy flavors are gaining demand across meals to complement exquisite dishes.
The flavoring agents segment dominated the market for beverage flavoring systems and held the largest revenue share of 71.4% in 2020. These agents are also estimated to maintain their dominance throughout the forecast period. These agents are added to modify, magnify, or complement the taste and aroma of the beverages. Some of the common flavoring agents utilized in the formation of beverages include alcohols, esters, aldehydes, MSG, protein hydrolysates, and ketones.
The flavoring agents are made up of natural and artificial origin substances. Natural flavoring agents are derived from plants and animals, whereas, artificial flavoring agents are manufactured from varied chemicals. Artificial flavoring agents are copies of natural flavors and are manufactured to smell and taste like them. These are easily available and less expensive as compared to their natural counterparts. In spite, artificial flavoring agents are having a lesser share in the market as compared to the natural flavoring agents.
The non-alcoholic segment dominated the market for beverage flavoring systems and held the largest revenue share of about 75.9% in 2020. The wide range of products under the non-alcoholic segments such as energy drinks, flavored milk, flavored water, mocktails, and juices, among others are contributing to the dominating share of the segment. The increasing varieties of aforementioned product types under non-alcoholic beverages are further supporting the maximum revenue share of the segment in the market for beverage flavoring systems.
The benefits associated with non-alcoholic beverages over an alcoholic is another major factor supporting segmental growth. These beverages can promote post-exercise recovery, rehydrates the body, improves cardiovascular health, reduces the risk of osteoporosis, improves copper metabolism, promotes better sleep, and reduces anxiety and stress among others. The rising awareness about the health benefits associated with non-alcoholic beverages especially among the young population is contributing to the growth of the segment. Moreover, the increasing number of health freaks across the globe supports the demand for energy drinks and sports drinks.
The alcoholic beverages segment is projected to experience the fastest growth over the forecast timeframe. The increasing demand for flavored alcoholic drinks like rose-flavored vodka, gin, and beer is projected to support the fastest growth during the estimated timeframe. Manufacturers are focusing on the development of new and different flavors of alcoholic beverages, thereby propelling the growth of the segment.
The liquid form segment dominated the market for beverage flavoring systems and held the largest revenue share of about 73.7% in 2020. The segment is also projected to maintain its dominance over the forecast period. The ease of processing associated with the liquid flavors is primarily contributing to its dominance in the market for beverage flavoring systems. This easy mixing capability offers increased stability that leads to its preference by the beverage manufacturers.
The liquid segment is also projected to exhibit the fastest CAGR of 5.4% from 2020 to 2028. The rapidly increasing demand for beverages in the market is contributing to the fastest growth of the segment in the market for beverage flavoring systems. The wide range of beverages and their respective liquid flavors for essences, extracts, and emulsions are supporting the fastest growth in the near future.
The natural origin segment dominated the market for beverage flavoring systems and held the largest revenue share of about 57.5% in 2020. The health benefits associated with the natural flavors since they are sourced from naturally available products such as parts of plants or animals is the primary factor contributing to the maximum revenue share. Commonly, these flavors are extracted from varied sources like fruits, leaves, pods, or the roots of plants. Some of the ingredients used to derive natural flavors include orange, mango, rose, coffee, and ginger.
The natural-origin flavors are safer for human consumption as compared to their chemical counterparts. Chemically synthesized flavoring ingredients often result in health hazards such as allergies or chronic diseases such as cancers. Additionally, natural-origin ingredients are also eco-friendly because they don’t contribute to severe environmental pollution as compared to the artificial flavors while production or disposal. As a result, beverage manufacturers’ focus is inclining towards the use of naturally derived ingredients also owing to the surging consumer demand for environment-friendly products.
Asia Pacific dominated the market for beverage flavoring systems and accounted for the largest revenue share of 37.9% in 2020. Countries such as China, India, and Indonesia are highly populous. The high population base contributes to the increased demand for packaged and ready-to-drink beverages. Rising urbanization in these countries is further supporting the demand for the increased alcoholic, as well as non-alcoholic beverages.
In Asia Pacific, the market for beverage flavoring systems is anticipated to exhibit the fastest growth during the forecast period from 2020 to 2028. The market is also gaining growth owing to the continuously growing demand across the developing economies of the region due to the increasing purchasing power of the people. Additionally, the countries from the Asia Pacific such as China and India are the high potential markets, as the trend of innovative beverage flavors is on the rise in these countries.
North America region accounted for more than 28.0% of the revenue share in 2020. North America follows Asia Pacific in terms of revenue derived from various beverages flavoring systems. In North America, U.S. accounted for the largest revenue share of 76.3% in 2020. The demand for alcoholic beverages such as beer, wine, and spirits is high in the country. The rising production of beverages due to the presence of major beverage manufacturers The Coca-Cola Company, PepsiCo, and Starbucks Corporation among others in the country are contributing to the growth of the market in the region.
The beverage flavoring system market is large and fragmented worldwide, which has increased the competition between players. The market is fragmented across varied small-and-medium-sized players. Flavors manufacturers are adopting new technologies particularly to manufacture natural and synthetic flavors for better stability and efficient flavor production. The extraction of flavors from source ingredients is a complex procedure. Hence, manufacturers are adopting various advanced methods such as biotechnology, encapsulation, and emulsion to increase the effectiveness of the flavors. These enable them to meet the global demand for various flavors.
The market is highly competitive as flavor manufacturers are focusing more on distribution and supply chain strategies. The flavor manufacturers have also been keeping the track of emerging trends in the beverage industry, which is helping them to cope up with the future demands from their customers. The continuously changing preference of the consumers about taste and flavor is the key aspect for the flavor manufacturers. For instance, International Flavors and Fragrance (IFF) is expanding its core product line with beverage solutions having citrus and other natural flavors. The company’s citrus flavor is its key product line in the entire product portfolio. IFF is focused on introducing new and innovative citrus flavors for the food and beverage industry.
Along with that, the presence of a huge customer base in the Asia Pacific countries like China and India along with the high percentage of the youth population, which is more likely to invest in alcoholic and non-alcoholic beverages is attracting leading manufacturers in the region. In February 2019, the Switzerland-based company, Givaudan opens the state-of-the-art flavor manufacturing facility in Pune, India to strengthen its footprint in the Asia Pacific flavors market. Some of the prominent players in the beverage flavoring system market include:
Sensient Technologies Corporation
International Flavors and Fragrances Inc.
Takasago International Corporation
Flavorchem & Orchidia Fragrances
Tate & Lyle
Market size value in 2021
USD 4.8 billion
Revenue forecast in 2028
USD 7.0 billion
CAGR of 5.3% from 2020 to 2028
Base year for estimation
2017 - 2019
2020 - 2028
Revenue in USD million and CAGR from 2020 to 2028
Revenue forecast, company ranking, competitive landscape, growth factors, and trends
Ingredients, beverage type, flavor type, form, origin, region
North America; Europe; Asia Pacific; Central &South America; Middle East & Africa
U.S.; Canada; Mexico; U.K.; Germany; France; Italy; China; Japan; India; Australia; Brazil; Argentina; South Africa
Key companies profiled
ADM; Givaudan; Sensient Technologies Corporation; Kerry Group; International Flavors and Fragrances Inc.; Firmenich SA; Takasago International Corporation; Flavorchem & Orchidia Fragrances; Tate & Lyle; MANE; Döhler; Symrise
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This report forecasts revenue growth at the 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 beverage flavoring system market report on the basis of ingredients, beverage type, flavor type, form, origin, and region:
Ingredients Outlook (Revenue, USD Million, 2017 - 2028)
Beverage Type Outlook (Revenue, USD Million, 2017 - 2028)
Carbonated soft drinks
Flavor Type Outlook (Revenue, USD Million, 2017 - 2028)
Chocolate and browns
Herbs & botanicals
Fruits & vegetables
Form Outlook (Revenue, USD Million, 2017 - 2028)
Origin Outlook (Revenue, USD Million, 2017 - 2028)
Regional Outlook (Revenue, USD Million, 2017 - 2028)
Central & South America (CSA)
Middle East & Africa (MEA)
b. The global beverage flavoring system market was estimated at USD 4.7 billion in the year 2020 and is expected to reach USD 4.8 billion in 2021.
b. The global beverage flavoring system market is expected to grow at a compound annual growth rate of 5.3% from 2020 to 2028 to reach USD 7.0 billion by 2028.
b. The Asia Pacific emerged as a dominating region with a volume share of 32.9% in the year 2020 owing to the growing demand for beverages across the rapidly developing economies of the region China and India.
b. The key player in the global beverage flavoring system market includes ADM, Givaudan, Sensient Technologies Corporation, Kerry Group, International Flavors and Fragrances Inc., Firmenich SA, Takasago International Corporation, Flavorchem & Orchidia Fragrances, Tate & Lyle, MANE, DÃ¶hler, and Symrise.
b. Increasing demand for beverages coupled with the growing purchasing power of developing economies residents are expected to drive the beverage flavoring system market growth.
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