Flavors And Fragrances Market Analysis By Product (Natural, Aroma), By Application (Flavors, Fragrances), By Region (North America, Europe, APAC, MEA, Central & South America), & Segment Forecasts, 2018 - 2025

Industry Insights

The global flavors & fragrances market size was valued at USD 18.6 billion in 2015 and is expected to grow at a CAGR of 4.5% over the forecast period. The industry is expected to acknowledge a remarkable growth over the forecast period owing to increasing demand in application industries such as food, beverages, and cosmetics & toiletries.

The food & beverage industry is projected to grow at a high CAGR over the coming years on account of demand for ready-to-eat meals, processed food, snacks, juices, and other beverages. The growing demand for food & beverages is expected to complement flavors demand over the forecast period.

Mature markets such as the U.S. and the UK have witnessed a high demand for personal care products, predominantly produced using natural ingredients with major brands such as Melvita, Annemarie Borlind, JĀSÖN, and Avalon Organics increasing natural content in their products.

U.S. flavors and fragrances market revenue by product, 2014-2025 (USD Million)

Increasing use of flavors in the pharmaceutical, dietary supplements, and nutraceutical market is also projected to augment market growth. The health & wellness trend prevailing in the market is anticipated to enhance the preference given to natural flavor ingredients.

Increasing disposable income in developing economies is projected to augment the demand for fragrances used in cosmetics, toiletries, perfumes, and soaps & detergents. Natural fragrances are perceived to be safe, healthier, and therapeutic. Manufacturers engaged in developing natural fragrances often charge a “green premium” on their products.

The demand for synthetic fragrances is also predicted to heighten at 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 as compared to natural fragrances.

Erratic 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. There is an increasing trend for preference of natural products, which is spurring demand for natural fragrances and flavoring agents.

Product Insights

Aroma chemicals are expected to maintain the largest market share. The majority of the demand for these chemicals is likely to come from fragrance industry. Esters demand from flavors & fragrances was valued at USD 5,115.0 million in 2015. Increasing concern about fitness and well-being by people of all ages is likely to provide lucrative opportunities for aroma chemicals in fragrances. Further, increasing research expenditure on developing fragrance compounds is expected to support the demand for aroma chemicals in upcoming years.

Natural flavors and fragrances market are supposed to emerge as the fastest growing product segment. Growing demand for this segment is supported by a rapid shift towards natural products, especially in developed countries. Essential oils are expected to emerge as the largest as well as fastest growing natural product segment.

The use of natural essential oils is on the rise owing to increasing demand for exotic essential oil for use in natural cosmetics, aromatherapy, pharmaceuticals, etc. advanced countries are demanding functional fragrances where odor value of a fragrance is reinforced with natural oils.

Application Insights

Fragrances are projected to grow at the highest CAGR over the forecast period. Increasing investment in new product developments for fragrances catering to the personal care, home care, automotive, pharmaceutical, and hospitality industry is projected to augment market demand.

Application market share, by revenue 2015 (USD Million)

Increase in utilization of flavors to numerous foods and beverages in domestic as well as commercial applications The demand for flavors used in beverages is projected to grow at the highest CAGR. New product launches coupled with the increasing demand for functional beverages and juices is projected to boost market growth.

Regional Insights

Asia Pacific is projected to grow at the highest CAGR on account of availability of the raw material and increasing demand. The market in flavors segment is expected to witness growth owing to increased demand in the food processing, pharmaceuticals, dietary supplements, and nutraceuticals industry. Changing consumer preferences coupled with demand for new exotic flavors is projected to augment market demand over the coming years.

North America accounted for 25.2% of market share in 2015. The region is projected to grow at a CAGR of 4.7% over the forecast period. The market for fragrances segment is anticipated to grow owing to increased demand for personal care, cosmetics, home care, oral care, therapy and air fresheners products. The North America and Europe region is particularly anticipated to register growth owing to concentration of cosmetics industries.

Competitive Insights

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

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

Report Scope

Segments covered in the report

This report forecasts revenue growth and provides an analysis on the latest trends in each of the sub-segments from 2014 to 2025. For the purpose of this report, Grand View Research has segmented flavors and fragrances market 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

    • UK

    • France

  • Asia Pacific

    •  China

    • India

    • Japan

  • Middle East & Africa

    • Saudi Arabia

  • Central and South America

    • Brazil