The global flavoring agents market is expected to witness significant demand over the forecast period on account of increasing consumption of processed and ready-to-eat foods in both developed and developing economies. Flavoring agents are used to enhancing food quality, most notably in food products that lose their natural flavor over some time.
Flavoring agents are complex mixtures obtained from natural or artificial processes to alter the taste of the product. Flavoring agents enhance the flavor of the product which aids in stimulating the appetite. Moreover, the product is used extensively in the processed food industry wherein the degradation of natural flavors is evident over some time. Furthermore, flavoring agents resonate with tastes that are authentic and familiar to consumers, thereby influencing their purchase decisions.
The flavoring agents' market value chain consists of raw material suppliers, manufacturers, distributors, and end-users. The raw material suppliers provide the substances and chemicals required to produce the flavoring agents. These raw materials are mixed or processed to produce different flavoring agents and are distributed via direct as well as third-party distributors. The end-users of flavoring agents are manufacturers of snacks, frozen foods, bakery products, and beverages among others.
The flavoring agents market is segmented based on type and application which is further segmented across major regions including North America, Europe, Asia Pacific, Central & South America, and Middle East & Africa. Based on type, the market is segmented into natural and artificial flavors.
Natural flavoring agents are produced from materials extracted from plants and animals through microbiological, physical, or enzymatic processes. Some of the natural flavors include fruit, vegetables, nut, seafood, spice blends, and wine among others. Artificial flavoring agents are obtained from combining or processing chemicals identical to natural flavoring agents and are deemed fit for human consumption. Some of the artificial flavoring agents include alcohols, esters, ketones, phenolics, terpenoids, and pyrazines among others.
Natural flavor implies the essence, essential oil, oleoresin, or extractive, distillate, protein hydrolysate, or any product of heating, roasting, or enzymolysis, which comprises the flavoring constituents derived from a fruit, spice, vegetable, herb, root, edible yeast, bud, bark, leaf or similar plant material, poultry, meat, dairy products, eggs, seafood, or fermentation products thereof, whose important function in food is a flavoring and not nutritional.
Many flavors, particularly fruit flavors, have one or a few important chemical components that carry the bulk of the taste/smell signal called esters. For example, the esters called octyl acetate and isoamyl acetate are a fundamental component in orange flavor and banana flavor respectively. Other chemicals including flavor carriers, stabilizers, emulsifiers, and acidity regulators among others are also added in correct proportions to produce the final product.
The primary drivers for the flavoring agents market include increasing disposable income, traveling around the world, which in turn increases the interest in unique experiences and global cuisines. Moreover, busy lifestyles have resulted in a growing demand for packaged foods. These flavoring agents are widely used by manufacturers of beverages, bakery & confectionaries, dairy & frozen foods, processed foods, pet food, pharmaceuticals, e-cigarettes, and vapor machines.
Strict laws and regulations regarding labeling of the products have urged the food & beverage manufacturers to use natural flavors owing to their health benefits. Moreover, increasing health awareness has resulted in increasing acceptance of natural flavoring agents across the food & beverage industry. In addition to this, flavoring agents are witnessing growing demand from manufacturers of sports, energy, carbonated, and alcoholic drinks globally.
The flavoring agents' market growth is expected to experience resistance owing to the high cost of production and stringent laws regarding food additives. For instance, the European Flavor and Fragrance Association has formed laws regarding the number of flavoring agents used in different types of food products including dairy, bakery, beverage, snacks, savory & convenience foods owing to the impact of flavoring agents on human health.
The Asia Pacific is expected to grow significantly owing to the rapid growth of the food & beverage industry. The Indian government has permitted 51% Foreign Direct Investment (FDI) in multi-brand retail and 100% FDI in the food processing industry and single-brand retail. This would strengthen supply chains and employment in the country contributing to the growth of the FMCG sector, in turn, boosting the demand for the beverage flavoring systems market. The growing demand for packaged juices, sports drinks, and energy drinks is expected to further drive the demand for flavoring agents in the Asia Pacific.
The flavoring agents market is highly consolidated, with the top four companies accounting for the maximum market share. Key market players include Givaudan SA, Firmenich, International Flavors & Fragrances Inc., Symrise AG, Kerry, Takasago, Mane, Sensient, Wild, Haubao, Hasegawa, and Robertet. The manufacturers focus on customized products and application development to gain competitive rivalry. As a result, market players are engaging themselves in numerous mergers and acquisitions to expand their product portfolio.
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FDA, in particular, has relaxed the nutrition labeling of products which is expected to aid in increasing the distribution of packaged foods by restaurant operators leading to the optimum supply chain of products to consumers. Furthermore, food safety testing and processing industries are expected to function at full capacity owing to consumers stock-piling goods during the COVID-19 lockdown. The report will account for Covid19 as a key market contributor.