India Flavors Market Size, Share & Trends Analysis Report By Nature (Natural, Synthetic), By Form (Powder, Liquid/Gel), By Application (Food, Beverages, Others), By Country, And Segment Forecasts, 2024 - 2030

India Flavors Market Size & Trends

The India flavors market size value was estimated at USD 2.02 billion in 2023 and is expected to grow at a compound annual growth rate (CAGR) CAGR of 7.7% from 2024 to 2030. The growth can attributed to factors such as increasing number of people relocating to urban areas, growing consumer base for processed food & beverages, increasing number of products available in the market, growth of organised retail in the country, impact of aggressive marketing by multinational food & beverage companies, increasing manufacturing of products with natural and synthetic flavors within country, and increased availability of processed food across the regional sections in India, among others. Growing use as well as market penetration of ready-to-make, ready-to-eat foods, shifting nutritive preferences and growth in consumption of gluten-free, sugar-free, alcohol-free products are some of the key factors that are fuelling growth for the flavors market in the India.

The Indian market accounted for a share of 10.5% of the global flavors market in 2023. India is moving towards becoming a developed nation from developing country since dawn of 21^st century. With increased information accessibility, booming use of internet, influence of social media campaigns and rising research revelations about different food ingredients are some of the factors, which influence choice of food in India now. In addition, traditions, occasions, cuisines, conventional ways of food consumption and development have huge impact on food & beverages consumers across the country. International brands and domestic brands both have been paying attention to this feature of the market to present a product portfolio that can cater to a few of changing trends as well as some of the unyielding patterns of consumer behaviour. This has been encouraging the key market participants from food & beverage industry to innovate constantly on every front including procurement, production and processes. For instance, in March 2023, PepsiCo India launched crop Intelligence Model in Collaboration with Cropin. The new initiative under PepsiCo’s popular brand in the country, Lay’s, is aimed at helping potato farmers in maximizing yields coupled with quality through handy dashboards on user-friendly mobile apps. 

Use of natural flavors in product development has been part of India’s food industry since centuries. However, now with increasing cost associated with use of natural flavors is posing challenge in front of many businesses. This has led to unceasing use of synthetic flavors, which can be developed or procured at lesser cost as compared to natural flavors. Synthetic flavors are widely used by beverage companies in the country to attain hint of desired flavor without addition of real fruit, which might reduce the shelf life of beverages as well as stupendously increase the cost of making.

Market Concentration & Characteristics

The India flavors market is growing at an accelerating pace and the growth stage is identified as high. It is predominantly characterised by the extremely competitive market with presence of many established market participants as well as many small and medium sized makers and developers across different states within. Numerous branded companies manufacturing food & beverages, dairy products, meat & sea food products, sauces, condiments, snacks, and pet foods procure their ingredients for the production and formulas of popular products such local vendors. Innovation and flexible packaging strategies are two of the key strategies adopted by these applications industries.

Mergers and acquisitions in the India flavors market are at medium level. These partnership, collaborations, mergers or acquisitions primarily are strategic moves by key companies to expand their portfolio and in turn market share.

Threat of substitute is rather at low level, as flavors have expanded their role significantly in industrial processes of several products and service delivery businesses. This includes restaurants, processed food manufacturers from the country, food & beverages companies from across the globe, and pharmaceuticals leaders, among others.

This market is highly impacted by regulations in the country, The clear labelling and food safety regulations in India have regulated the market to ensure consumer’s health and safety. The processes to get necessary licenses, permissions and to adhere with compliance practices are set in such manner in the region.

Application Insights

The market for flavors in food applications accounted for a revenue share of 65% in 2023. The natural as well synthetic flavors are used in food industries such as dairy products, bakery & confectionery, supplements & nutrition products, meat & seafood products. Both powdered and liquid/gel-based flavors are used in production of snacks, pet foods, sauces, dressings & condiments, plant-based food, and baby food as well. International and domestic brands in production of popular carbonated soft drinks in the country. Stigmas associated with consumption of certain type of drinks also result in use of flavors to develop substitutes with closer to original tastes.

The demand for flavors in beverages is projected to grow at a CAGR of 8.1% from 2024 to 2030, driven primarily by the functional beverages category. Very high number of consumers for such beverages, growing awareness regarding fitness and health in the country, and availability and penetration of such products are some of the key aspects responsible for this projected growth over the coming years.

Form Insights

Powdered flavors accounted for a revenue share of 68.2% in 2023. Collective demand for powdered flavors can be attributed to flexibility and capability to advance flavour content of various foods and dishes. The powdered flavors are offered in dry state, which are easy to store, suitable for the practice, often right for processes such as baking, cooking, and production of beverages. Additionally, these powders can be mixed with variety of spices, salts, sugars and other ingredients.

The demand for liquid/gel flavors is expected to grow at a CAGR of 6.8% from 2024 to 2030. Generally, producers and manufacturers picking this form of the flavors need these products in larger quantities. Liquid/gel forms are usually concentrations of flavors, widely used manufacturing of beverages.

Nature Insights

The natural flavors market is expected to grow at a CAGR of 9.4% from 2024 to 2030. Often, the perspective of considering them as healthier and better and niche market requirements drive high demand for natural flavors.

The Indian market is also driven by global trends; however, country-based market trends drive the demand patterns, consumer behaviour, purchase decisions more than anything else. These factors are highly influenced by electronic media, internet, social media websites and other web contents.

The synthetic flavors market accounted for a revenue share over 68% in 2023. Often, costly nature of flavor solutions offered through natural sources have been resulting in more number of buyers using synthetic versions of flavors in India. These flavors are preciously made through adoption of artificial ingredients in laboratories using chemical synthesis.

Key India Flavors Company Insights

The India flavors market is identified as a fragmented market. It has presence of numerous companies that are operating at huge scale, however the market also occupied by small and mid-size producers which operate at lower scale and yet hold certain share of the local or state-size markets.

Symrise Pvt. Ltd., a popular brand in flavour & fragrance from Germany, opened its creative arm in Mumbai, Maharashtra, India a few years ago. The company provides solutions for industries such as dairy, culinary, food & beverages, pet food, aqua feed, and nutrition.

Recent Developments

• In May 2022, Symega, one of the key players in the India flavors market entered the plant-based protein space and the launched a newly built manufacturing unit in Kochi, India. In addition, it announced its strategy to develop a greenfield facility to make extruded proteins and increase existing capacity to twice as much.

• MANE, in November of 2022, opened flavor innovation centre in India. This newly opened arm of the French company is located at Hyderabad in 13,900 square feet area, HITEC City, a tech industry hub of the region.

India Flavors Market Report Scope

India Flavors Market Report Segmentation

This report forecasts revenue growth at the country level and offers a scrutiny of the most recent industry trends in each of the sub-segments from 2018 to 2030. For this study, Grand View Research has segmented the India flavors market report based on nature, form, and application:

• Nature Outlook (Revenue; USD Million; 2018 - 2030)

  • Natural

  • Synthetic

• Form Outlook (Revenue; USD Million; 2018 - 2030)

  • Powder

  • Liquid/Gel

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

  • Food

    • Dairy Products

    • Bakery & Confectionery

    • Supplements & Nutrition Products

    • Meat & Seafood Products

    • Snacks

    • Pet Foods

    • Sauces, Dressings & Condiments

    • Others (Plant-based Food, Baby Food, etc.)

  • Beverages

    • Juices & Juice Concentrates

    • Functional Beverages

    • Alcoholic Beverages

    • Carbonated Soft Drinks

    • Others (Smoothies, Coffee, etc.)

  • Other (Tobacco Products, Pharmaceuticals, etc.)