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Flavors and Fragrances Ingredient market size in 2020 generated a revenue of $30,071 million growing at a CAGR of 3.7% during the forecast period 2021-2026.
The Flavors and Fragrances Ingredients Market growth rate is
attributed to the growing demand for smoked flavors. Smokey flavors are
increasingly being used in snack foods, meats, seasonings, sauces, cheeses,
honey and salt which increase the demand in dessert, beverage, soups and
various other sweet and savory applications that increases the opportunities
for the growth of this market. In addition, change in taste and lifestyle of
consumers increases the trend of ready-to-eat products which increases the
opportunities to manufacturers to develop new innovations, to meet consumer
demand that increases the opportunity for the growth of this market. Flavors
and fragrances are substances used to improve a product's overall cosmetic
appeal by altering its taste and smell. Flavors are aromas found in edible
foods and beverages, while fragrances are aromatic mixtures used in items for
personal care. It is composed of esters, acids, alcohol, ketones, lactones and
aldehydes. Rapid urbanization, increased availability of disposable income for
purchasing products, and growing demand for flavor ingredients across food and
beverage applications are contributing to the growth of this industry.
Increased sanitary and hygiene awareness has also contributed to an increase in
the use of perfumes and deodorants, further fuelling the growth of the product.
Furthermore, an increasing demand
in the food and beverage industry for various types of flavors to improve the
taste of drinks such as smoothies, milkshakes and juices is driving the market
for flavor and fragrance ingredients. Apart from this, the rising consumption
of non-alcoholic beverages in the U.S. is a vital factor contributing to the
market growth. For instance, according to the Centers for Disease Control and
Prevention, water accounted for 51.2% of total non-alcoholic beverage
consumption among adults on a day in 2015-2018, followed by coffee (14.9%),
sweetened beverage (10.2%), tea (8.7%), fruit beverages (5.6%), milk (5.5%) and
diet beverages (3.8%). Investments in developing countries for enhancing the
food and beverage industry with high nutritional content are witnessing a
significant growth. Major players in different regions are adopting different
strategies such as launching new products in order to meet with the customer’s
demand which in turn is contributing to the propelled product demand. On the
other hand, stringent government regulation associated with flavor and
fragrances serves as a major setback for the growth of the flavors and
fragrances ingredients market during the forecast period 2021-2026.
Asia-Pacific is the major region
dominating the Flavors and Fragrances Ingredients Market owing to a steady rise
in the population's disposable income in the region. Rising consumption of
these products in different flavors leads to higher demand for certain
ingredients for flavor and fragrance. Efficient distribution networks are
another factor that has further contributed to this market's growth in the
region. Manufacturers have been working to advance their technology, as well as
their products quality. This has been a significant catalyst of business
innovation.
Also, synthetic ingredients in
2020 accounted for the largest market segment. This owes towards the long
lasting, emanate strong fragrance, and offer greater freedom of creativity to
manufacturers. In contrast to natural variants, synthetic fragrances are less
costly. Highly influential factors contributing to the growth of the fragrance
industry are anticipated to be growing numbers of retail outlets, new product
releases, and economic prices for personal care goods. Synthetic chemicals in
artificial flavors are usually cheaper to make. They may also be safer since
they have been thoroughly tested and used. However, the vanillin compound is
responsible for both the fragrance and the taste of vanilla. The market for
synthetic flavors and fragrances is expanding and growing rapidly, owing to the
growing global population with rising disposable incomes. Moreover, rapid
development in industrialization across the globe has led to a massive increase
in the production of flavored or synthesized products such as processed foods
and beverages, soaps, personal care products, detergents, household cleaners,
and oral hygiene products etc.
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Flavors and Fragrances
Ingredients Market Growth Drivers:
·
Rising
Demand of Flavors in Bakery and Confectionary Industry
The market for Flavors and Fragrances Ingredients is
anticipated to rise at a rapid pace during the forecast period 2021-2026. This
is owing rising demand of flavors in bakery and confectionary industry to provide
aroma, taste and sensate components to make the products more desirable is a
vital factor contributing to its market growth. Moreover, the rising demand
among consumers for various product with versatile taste and flavors have
compelled manufacturers to come up with a variety of products which in turn is
fostering the market growth. For instance, in May 2020, Pandy Foods AB launched
two jelly confectionaries varieties and three flavors of lentil chips. In
addition, the company is set to launch another new lentil chip flavors in order
to strengthen the product range with a whole new type of confectionary product.
According to the American Bakery Association, sales in the U.S. bakery aisle
jumped an unprecedented 62.3% over the week ending March 15,2020, with IRI
finding a sales increase of 44.3% for cookies and crackers alone.
·
Mergers &
Acquisitions in Flavor and Fragrances Ingredients Industry, with an aim to
develop new products
Major Flavor and Fragrance Industry manufacturers are pursing strategies
such as mergers, acquisition and other strategic alliances to strengthen their
foothold in the market. Using such means, they are also expanding their
business. Focus on research and development is necessary as they produce
innovative and cost-effective products for different industry. In November
2019, Neptune Wellness Solutions Inc., a health and wellness company focused on
extraction, purification and formulation of cannabinoids entered into an
agreement with International Flavors & Fragrances Inc., to co-develop
hemp-derived CBD products for the mass retail and health & wellness market.
In addition, under this strategic product development partnership, IFF will
leverage its intellectual property for taste, scent and nutrition to provide essential
oils and product development resources. Neptune will leverage its proprietary
cold ethanol and extraction processes and formulation to deliver high quality,
full and broad spectrum extracts for the development of hemp derived products
infused with essential oils, cosmetics, personal care and home care markets. The
rising number of merger and acquisition by the key players in order to expand
their product portfolio is a vital factor contributing to its market growth.
For instance, in November 2020 Croda International Inc., acquired Iberchem, a
global fragrance and flavors company for $970million. Under this development,
the primary goal is to provide full service offering to costumers in consumer
care markets and a compelling platform to grow the combined business in the
years ahead.
R&D
Investment:
Symrise AG has signed a purchase agreement with
Sensient Technologies Corporation to acquire their fragrance and aroma
chemicals activities. This acquisition will help Symrise to strengthen its
backward integration and broaden its leadership position as a supplier of
fragrance ingredients which has demanded in personal and home care products.
The Major
Players in this Market Include:
The major
companies in the Flavors and Fragrances Ingredients market include Givaudan, Firmenich,
International Flavors & Fragrances Inc., Symrise, Mane SA, Huabao
international Holdings Limited, Takasago, Sensient Flavors, Robertet SA, T.
Hasegawa. In March 2020, Symrise AG
has signed a purchase agreement with Sensient Technologies Corporation to
acquire their fragrance and aroma chemicals activities. This acquisition will
help Symrise to strengthen its backward integration and broaden its leadership
position as a supplier of fragrance ingredients which has demanded in personal
and home care products.
Although there has been
product withdrawals and low demand for the product, companies are conducting
research and development for the perfecting the products. Manufacturers are
rooting for the comeback of flavors and fragrances ingredients with effective
products. There are the major factors set to buoy the flavors and
fragrances ingredients market during 2021-2026.
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