Flavors and Fragrances Market Size, Share & Trends Analysis Report By Product (Natural, Aroma), By Application (Flavors, Fragrances), By Region, And Segment Forecasts, 2019 - 2025

Industry Insights

The global flavors and fragrances market size was valued at USD 20.75 billion in 2018 and is expected to expand at a CAGR of 4.7% over the forecast period. Increasing demand from application industries such as food, beverages, and cosmetics and toiletries is projected to drive the growth.

Food and beverage industry is estimated to register a notable CAGR over the forecast period owing to increasing demand for juices, snacks, processed food, ready-to-eat meals, and other beverages. Mature markets such as U.S. and U.K. have witnessed a high demand for personal care products, predominantly produced using natural ingredients.

Growing demand for personal care products coupled with food and beverages is projected to trigger market growth over the forecast period. Increasing use of flavors in pharmaceutical, dietary supplements, and nutraceuticals is projected to augment demand in the forthcoming years. The upward trend of health and wellness is anticipated to enhance the preference given to natural flavor ingredients.

Increasing disposable income in developing economies is projected to augment the demand for cosmetics, toiletries, perfumes, and soaps and detergents. This factor is anticipated to drive the market in near future. Natural fragrances are perceived to be safe, healthier and therapeutic. Natural flavor and fragrance ingredients are expected to grow rapidly owing to the rising preference for organic ingredients in food and personal care sector. Manufacturers engaged in developing natural fragrances often charge a green premium on their products.

The demand for synthetic fragrances is also predicted to witness a significant CAGR as they are long lasting, emit strong fragrance, and offer a greater freedom of creativity to manufacturers. Moreover, synthetic fragrances are less expensive compared to natural variants. Growing number of retail stores, new product launches, and economic prices of personal care products are anticipated to be extremely influential factors contributing to the growth of the fragrance market.

Irregular supply, resulting in fluctuating prices of essential oils has brought about an irreversible substitution of these oils by synthetics. This provides a real threat, especially with regard to perfumery oils. With so many essential oil products there exists a huge variance across the prices of each essential oils product. Rising preference for natural and organic ingredients is anticipated to continue spurring demand for natural products.

Product Insights

Aroma chemicals are expected to hold the largest market share over the forecast period. Majority of demand for these chemicals is likely to come from fragrance industry. The demand for esters was valued at USD 5.73 billion in 2018. Increasing concern about fitness and well-being by people of all ages is likely to provide lucrative opportunities for aroma chemicals in fragrances. Increasing R&D investments is projected to further drive the demand for aroma chemicals over the forecast period.

Natural segment is estimated to witness the fastest growth over the forecast period. Rapid shift towards natural products, especially in developed countries is projected to drive the growth in the forthcoming years. Essential oils is anticipated to emerge as the fastest growing product segment during the forecast period. The use of natural essential oils is on the rise owing to increasing demand for exotic essential oils in natural cosmetics, aromatherapy, and pharmaceuticals among others. Developed countries are anticipated to drive the demand for functional scents where odor value is reinforced with natural oils.

Application Insights

Fragrances are projected to expand at the highest CAGR over the forecast period. Increasing investment in new product developments to cater to demand from personal care, home care, automotive, pharmaceutical, and hospitality industries is projected to augment growth.

Synthetic chemicals in the artificial flavors are usually cheaper to manufacture than finding natural sources of chemicals. They are also possibly safer since they have been thoroughly tested and used. The compound vanillin, for example, is accountable for the fragrance as well as flavor of vanilla. Rising popularity for authentic aromas in the hospitality and food sector is projected to drive growth over the forecast period.

Increasing utilization of flavors in numerous foods and beverages in domestic and commercial applications is anticipated to bode well for segment growth. Demand for flavors used in beverages is projected to expand at the highest CAGR in the forthcoming years. New product launches coupled with increasing demand for functional beverages and juices is projected to boost the market.

Regional Insights

Asia Pacific is projected to register the highest CAGR of 6.7% during the forecast period on account of availability of raw materials and increasing demand from different application industries. The flavors segment is expected to witness growth owing to increased demand from food processing, pharmaceuticals, dietary supplements, and nutraceuticals industry. Changing consumer preference coupled with demand for exotic scents is likely to boost regional demand in the forthcoming years.

North America accounted for 24.0% of market share in 2018. It is projected to expand at a CAGR of 2.9% over the forecast period. The fragrance segment is anticipated to grow owing to increased demand for the products from personal care, cosmetics, home care, therapy, oral care, and air freshener products. North America and Europe are anticipated to register growth owing to concentration of cosmetics industries in these particular regions.

Flavors and Fragrances Market Share Insights

Manufacturers have integrated their production and distribution channels for better market approachability. Most companies are vertically integrated and produce products that cater to various applications. Manufacturers have to abide by manufacturing and labeling laws, regulations, and guidelines published by regulatory authorities such as Food and Drug Administration (FDA), U.S. Department of Agriculture (USDA), Health Canada, European Food Safety Authority, and World Health Organization (WHO).

Manufacturers also obtain certifications such as Kosher, Halal, and ISO to gain a competitive edge in the market. End-user business activities greatly influence financial condition as well as operations of raw material manufacturers and suppliers.

Report Scope

Segments Covered in the Report

This report forecasts revenue growth at global, regional, and country level and provides an analysis of the latest industry trends in each of the sub-segments from 2014 to 2025. For the purpose of this report, Grand View Research has segmented the global flavors and fragrances market report on the basis of product, application, and region:

• Product Outlook (Revenue, USD Million, 2014 - 2025)

  • Natural

    • Essential Oils

      • Orange

        • Limonene

        • Myrcene

        • Others

      • Corn Mint

        • Menthol

        • Menthone

        • Others

      • Eucalyptus

        • Eucalyptol

        • Limonene

        • Others

      • Pepper Mint

        • Menthol

        • Menthone

        • Others

      • Lemon

        • Pinene

        • Limonene

        • Camphene

    • Oleoresins

    • Paprika

      • Piperine

      • Others

    • Black Pepper

      • Piperine

      • Others

    • Turmeric

      • Curcumin

      • Others

    • Ginger

    • Gingerol

    • Others

    • Others

  • Aroma Chemicals

    • Esters

      • Ethyl Acetate

      • Benzyl Acetate

      • Ethyl Benzoate

      • Methyl Decanoate

      • Others

    • Alcohol

      • Lauryl alcohol

      • Menthol

      • Others

    • Aldehyde

      • Benzaldehyde

      • Vanillin

      • Others

    • Phenol

      • Ethylvanillin

      • Others

    • Others

• Application Outlook (Revenue, USD Million, 2014 - 2025)

  • Flavors

    • Confectionary

    • Convenience Foods

    • Bakery Food

    • Dairy Food

    • Beverages

    • Others

  • Fragrances

    • Fine Fragrances

    • Cosmetics and Toiletries

    • Soaps & Detergents

    • Others

• Regional Outlook (Revenue, USD Million, 2014 - 2025)

  • North America

    • U.S

  • Europe

    • Germany

    • U.K.

    • France

  • Asia Pacific

    • China

    • India

    • Japan

  • Middle East & Africa

    • Saudi Arabia

  • Central and South America

    • Brazil