Flavors And Fragrances Market Size, Share & Trends Analysis Report By Product (Aroma Chemicals, Natural), By Application (Flavors, Fragrances), By Region, And Segment Forecasts, 2024 - 2030

Flavors And Fragrances Market Summary

Rising disposable income in emerging economies like India and China coupled with population growth, is expected to augment demand for personal care and cosmetic products in industry. In addition, busy lifestyle pattern upheld in developing as well as developed countries is anticipated to augment demand for processed foods & beverages, thereby increasing demand for flavors.

Natural fragrances and flavors are costly due to their processing; and because of limited resources, industry players have developed cost-efficient synthetic alternatives. These products have advantages of regular supply, steady pricing, and lower production costs. In past years, there used to exist an arrangement in which dealers would have a multi-year contract with other dealers.

However, such an arrangement is no longer popular. Due to increased awareness about adverse effects of allopathic medicines, increasing concerns about medicinal benefits and therapeutic effects of herbal products are likely to fuel demand for herbal products, dietary supplements, and herbal-based beauty aids derived from botanical extracts. These extracts are used in anti-aging cosmetic products to help reduce radical damage caused by bioflavonoids in their composition.

Flavors and fragrances provide strong sensory impressions, often determined when applied via medical products, beverages, food, and other substances. These products enhance aesthetic value and overall appeal of consumer goods. The increasing demand for health and wellness foods, Ready-to-Eat (RTE), and convenience meals, as well as rapid technological advancements, are expected to further augment industry growth.

Market Concentration & Characteristics

The industry is fragmented and dominated by large-scale multinational companies. Smaller companies differentiate themselves by creating unique natural fragrances and flavors, and as a result, make it difficult for their competitors to imitate and enter domestic market. The manufacturers are experiencing profit margin problems, which have become worse due to demands of retailers and processors and their private label brands. Safety considerations and environmental protection laws are becoming vital in most developed countries.

The type of flavor manufactured by a company is largely influenced by consumer preferences prevailing in different countries or regions. Flavor developers must consider various aspects such as application, raw material used, taste, and product form. Flavors have found increased applications in beverages, dairy products, confectioneries, snacks, ready-to-eat meals, toothpaste, dietary supplements, and other products.

Manufacturers have integrated their distribution channels and production for better market approachability. Key companies are vertically integrated and formulate products that cater to several applications. Manufacturers need to comply with labeling & manufacturing laws, guidelines, and regulations published by regulatory authorities including European Food Safety Authority, U.S. Department of Agriculture (USDA), Food & Drug Agency (FDA), Health Canada, and World Health Organization. In January 2023 Symrise AG invested in Ignite Venture Studio. It is a B2C startup venture in the personal care sector. Symrise has invested in Ignite Venture Studio to drive product innovations in fragrance and cosmetic ingredients.

Operating costs and the cost of investment are also getting higher each year. Under these circumstances, clearances for new projects are tough to obtain in developed countries. Furthermore, creativity and innovation are the most important factors for achieving a competitive edge. Thus, to achieve this, new ingredients are being searched resulting in higher processing costs. These factors are expected to be a challenge for industry players.

Product Insights

In terms of product, the natural chemicals segment dominated the industry in 2023 with the maximum revenue share of more than 74.5%. This is attributed to ever-increasing product usage in various application industries such as pharmaceuticals, aromatherapy, and natural cosmetics. Furthermore, increasing research spending for development of natural fragrance compounds is expected to have a positive impact on overall industry. Aroma chemicals are synthetic aromas, which are used in many applications, such as essential oils, food & beverages, and perfumes.

Aroma chemicals play a crucial role in manufacturing fragrances and flavors that are used in food industry to enhance the appeal and flavor of product. These chemicals are classified as phenols, aldehydes, alcohols, esters, and other chemicals. The use of natural products is on rise due to high demand for exotic essential oils that are used in pharmaceuticals, aromatherapy, and natural cosmetics. The demand for fragrances where odor value of a fragrance is replaced with natural oils is high in developed countries. Thus, many exotic essential oils like sandal, junipers, rosemary, lavender, geranium, etc. find applications in multiple new blends.

Application Insights

The fragrances application segment dominated the global industry in 2023 with the maximum revenue share of more than 51.9%. The large share of this segment can be attributed to increased demand for various fragrances in toiletries, such as hand washes, detergents, soaps, personal care products, and cosmetics. Furthermore, fragrance plays an important role in aromatherapy applications, owing to which essential oils, materials, compounds, and aromatic oils demand is likely to be driven in aromatherapy applications.

n addition, growing demand for aromatherapy diffusers is likely to fuel industry's growth in the coming years. Flavors are aromas used in food & beverage products. There is a rise in application of flavors in several foods and beverages in commercial as well as domestic applications. In addition, feed and feed additive manufacturers are focusing more on providing palatability solutions to increase feed intake. This, in turn, it is projected to propel demand for flavors in animal feed applications supporting overall market growth.

Regional Insights

Asia Pacific dominated global industry in 2023 with the largest revenue share of more than 32.0%. This large share is attributed to shift in choices of consumers towards nutritional and healthy foods and beverages in most populated countries like India and China. Asian flavors and fragrances have also gained popularity in major regions of Europe, Middle East and North America. Indonesia, India, China, and Vietnam are among the prominent food flavor markets in Asia Pacific region. Multiple manufacturing companies are focusing on expansion of their business and investments in R&D facilities in the Asia Pacific region.

Factors, such as government subsidies, tax benefits, and high per capita income, are attracting global companies to expand and start their operation in this region. The Comprehensive Economic & Trade Agreement (CETA) is predicted to remove customs duty on food and agricultural products and several other industrial products. The trade agreement between Canada and the European Union is likely to enable it to participate in public bids in Canada. This is further intended to propel trade of essential oils between Europe and North America, thereby providing a significant growth opportunity for essential oils & floral extracts industry players in North America.

Key Flavors And Fragrances Company Insights

Some of the key players includesGivaudan,Young Living Essential Oils, and dōTERRA International

• Givaudan manufactures and sells fragrances and flavors. The company offers a range of fragrances for fabric, personal care, hair and skin care, household care products. It has a wide network of suppliers for its production facilities with 185 locations worldwide, and 79 production sites.

• Young Living Essential Oils is engaged in manufacturing natural oils and chemicals. The company operates through offices and production units located in Australia, Europe, the U.S., Canada, Japan, and Singapore along with farms located in the U.S., Ecuador, Canada, France, and Oman.

Recent Developments

Key companies are adopting several organic and inorganic growth strategies, such as capacity expansion, mergers & acquisitions, and joint ventures, to maintain and expand their market share.

• In January 2023 Symrise AG invested in Ignite Venture Studio. It is B2C startup ventures in the personal care sector. Symrise has invested in Ignite Venture Studio to drive product innovations in fragrance and cosmetic ingredients.

• In December 2022, -Symrise had partnered with Norwest Ingredients for comprehensive sustainability assessment of peppermint and spearmint raw materials.

• In December 2022, Mane Group has opened two new facilities in India. The first site is located at MANE KANCOR Angamaly, Kerala; the second is at MANE KANCOR Byadgi, Karnataka

Flavors And Fragrances Market Report Scope

Global Flavors And Fragrances Market Report Segmentation

This report forecasts revenue and volume growth at the global, regional, and country levels and provides an analysis of the latest industry trends and opportunities in each of the sub-segments from 2018 to 2030. For this study, Grand View Research has segmented the global flavors and fragrances market report based on product, application, and region:

• Product Outlook (Volume, Kilotons; Revenue, USD Million, 2018 - 2030)

  • Natural

    • Essential Oils

      • Corn mint Essential Oils

      • Eucalyptus Essential Oils

      • Pepper Mint Essential Oils

      • Lemon Essential Oils

      • Citronella Essential Oils

      • Patchouli Essential Oils

      • Clove Essential Oils

      • Ylang Ylang/Canaga Essential Oils

      • Lavender Essential Oils

    • Oleoresins

      • Paprika Oleoresins

      • Black Pepper Oleoresins

      • Turmeric Oleoresins

      • Ginger Oleoresins

    • Others

  • Aroma Chemicals

    • Esters

    • Alcohol

    • Aldehydes

    • Phenol

    • Terpenes

    • Others

• Application Outlook (Volume, Kilotons; Revenue, USD Million, 2018 - 2030)

  • Flavors

    • Esters

    • Alcohol

    • Aldehydes

    • Phenol

    • Terpenes

    • Others

  • Fragrances

    • Esters

    • Alcohol

    • Aldehydes

    • Phenol

    • Terpenes

    • Others

• Regional Outlook (Volume, Kilotons; Revenue, USD Billion, 2018 - 2030)

  • North America

    • U.S.

    • Canada

    • Mexico

  • Europe

    • Germany

    •  UK

    • France

    • Spain

    •  Italy

    • Russia

    •  Portugal

    • Turkey

  • Asia Pacific

    • China

    • China

    • India

    • Japan

    • SEA

    • Indonesia

    • Bangladesh

    • Philippines

    • Australia

  • Central & South America

    • Brazil

    • Columbia

    • Argentina

  • Middle East & Africa

    • Saudi Arbia

    • Iran

    • Africa Continent