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The flavors and fragrances market size is forecast to increase by USD 14.11 billion at a CAGR of 6.73% between 2023 and 2028. The market's growth hinges on various factors, including the escalating number of new product launches, particularly in personal care and food flavoring segments. This trend is fueled by the rising consumer demand for innovative and diverse products. The industry witnesses a growing preference for natural flavors and fragrances driven by regulatory standards and compliance requirements. Moreover, the market sees a surge in the adoption of natural cosmetics and fragrance compounds, with consumers showing a preference for synthetic alternatives. Additionally, the market benefits from the increasing disposable income of consumers, which enables them to spend more on such products. These factors collectively contribute to the expansion of the market, creating opportunities for companies to introduce new and exciting products to meet the evolving needs and preferences of consumers.
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The market continues to thrive, fueled by the rising demand for ready-to-eat food products and personal care items. With an increasing working-class and middle-class population, urbanization, and the prevalence of busy lifestyle patterns, consumers are gravitating towards convenient packaged and preserved foods, as well as personal care products. Phenols, aldehydes, alcohols, and esters, along with exotic essential oils like sandalwood, are among the key ingredients shaping the diverse landscape, catering to evolving consumer tastes and preferences. Our researchers analyzed the data with 2022 as the base year, along with the key drivers, trends, and challenges. A holistic analysis of drivers will help companies refine their marketing strategies to gain a competitive advantage. Flavor ingredients are used in cosmetic products to create natural fragrance compounds, appealing to the working-class population with scents like sandals.
The increase in disposable income is driving growth in the market. The increasing expenditure on food and personal care products, because of the rise in disposable income, is likely to drive the growth of the global market during the forecast period. With the increase in disposable income, households have more money to either save or spend on products that are not strictly essential.
However, the strong consumer base and high disposable incomes of North America and Europe make it an appealing market for fragrance products. The ability for consumers in North America to purchase power to indulge in luxury and premium fragrances results in increased demand in the whole market. Therefore, the increase in disposable income will significantly drive the global market during the forecast period.
The growing investments in the market is a primary trend in the market. New technologies are being used by a number of local and global players in the global companies for spices and fragrances to develop improved varieties of Natural and synthetical flavors so as to gain stability. These companies are increasingly engaging in several R&D activities to introduce innovations and technological advances. Such activities will increase the demand globally, which will drive the growth of the global market.
Moreover, In order to preserve the taste that is derived from natural ingredients, particularly fruits, manufacturers are developing advanced methods of flavor extraction. Some of the popular technologies include supercritical carbon dioxide technology, solid-liquid extraction, high-power ultrasound, and supercritical fluid extraction. Innovations and technological advances are emerging as a popular trend, which can help accelerate the growth momentum of the global market during the forecast period.
The threat of counterfeit products is a major challenge in the market. At the same time, increasing demand for flavor and fragrance products resulted in an increase in the influx of counterfeit products into the market Counterfeiting refers to the branding and sales of unauthorized products, which represents a major challenge for genuine companies. The manufacture of counterfeiting spices and perfumes is carried out on the basis of low-cost, non-standard materials.
However, due to their low cost, which affects the brand image and sales of the company, most consumers are unable to distinguish between originals and counterfeits and buy them. Hence, companies across the world are taking active measures to stop counterfeiting. Moreover, with the increasing digitization and growth in e-commerce platforms, the penetration of counterfeit products is likely to increase, which will act as a challenge for the global market during the forecast period.
The market forecasting report includes the adoption lifecycle of the market, covering from the innovator’s stage to the laggard’s stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their market growth and forecasting strategies.
Market Customer Landscape
Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.
Archer Daniels Midland Co. - The company offers flavors and fragrances such as mint and vanilla flavors.
The research report also includes detailed analyses of the competitive landscape of the market and information about 15 market companies, including:
Qualitative and quantitative analysis of companies has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize companies as dominant, leading, strong, tentative, and weak.
The fragrances segment is estimated to witness significant growth during the forecast period. The dominance of key companies is likely to drive the demand for fragrances during the forecast period. The vendor's objective is to increase its presence in the world market by adopting Organic and Inorganic growth strategies, such as product launches and acquisitions, and partnerships.
The fragrances segment was the largest segment and was valued at USD 16.10 billion in 2018. The fragrances segment is expected to grow during the forecast period, owing to the rising demand from end-users such as manufacturers of fine fragrances, cosmetics and toiletries, soaps and detergents, household cleaners, and air fresheners. Also, the global demand for household cleaners and air fresheners is driven by increased awareness about hygiene, as well as increasing per capita income. Hence, such factors are fuelling the growth of this segment which in turn drives the market during the forecast period.
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APAC is estimated to contribute 47% to the growth of the global market during the forecast period. Technavio’s analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period. The market in APAC is expected to grow during the forecast period. Factors such as the presence of a huge consumer base, rising working women population, growing demand for international cuisines, and penetration of key companies into the region are attributed to the high growth of the market in the region.
Moreover, the rapid development in the economies of countries such as China, India, and Indonesia has resulted in an increasing proportion of the middle-class population in APAC. The growing demand for flavor and fragrance is being driven by middle-class families who seek to improve their lifestyle standards, which leads to more consumption of home care products and personal care products. Such factors will increase the market growth during the forecast period.
Segment Overview
The market research report provides comprehensive data (region wise segment analysis), with forecasts and estimates in "USD Million" for the period 2024-2028, as well as historical data from 2018 - 2022 for the following segments.
The market continues to expand, driven by various factors such as the demand for packaged foods, preserved foods, and ready-to-eat meals amidst urbanization and the working-class population's busy lifestyles. Regulatory standards and compliance remain crucial in ensuring product safety and meeting consumer preferences, especially in online food shopping and retail grocery segments. Synthetic and natural ingredients play a significant role in flavor and fragrance development, catering to diverse consumer needs across beverages, confectionery, dairy, and personal care products. However, challenges like profit margin issues, regulatory clearances, and environmental protection laws persist, impacting both larger multinational companies and smaller players in this fragmented industry.
Adaptability, creativity, and adherence to labeling and manufacturing regulations are essential for market approachability and sustained growth in this dynamic sector. The market experiences growth driven by various factors, including the demand for ready-to-eat food and consumer products shopping facilitated by apps and the Internet. It caters to a busy lifestyle pattern by offering a wide range of synthetic and natural fragrances and flavors for processed foods, cosmetics, and personal care products.
Moreover, both large-scale multinational companies and smaller firms contribute to this market, facing challenges such as profit margin problems and regulatory considerations. The industry innovates with new ingredients and natural chemicals, serving sectors like pharmaceuticals and aromatherapy. Aromatherapy applications, aromatic oils, and essential oils like lavender and eucalyptus are popular, with applications in hand washes and aromatherapy diffusers, catering to consumer preferences for natural products.
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Market Scope |
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Report Coverage |
Details |
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Base year |
2023 |
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Historic period |
2018 - 2022 |
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Forecast period |
2024-2028 |
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Growth momentum & CAGR |
Accelerate at a CAGR of 6.73% |
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Market growth 2024-2028 |
USD 14.11 billion |
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Market structure |
Fragmented |
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YoY growth 2023-2024(%) |
5.87 |
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Regional analysis |
APAC, North America, Europe, South America, and Middle East and Africa |
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Performing market contribution |
APAC at 47% |
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Key countries |
US, China, Japan, Germany, and Italy |
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Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
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Key companies profiled |
AARAV Flavors and Fragrances Pvt. Ltd., Alpha Aromatics Inc., Archer Daniels Midland Co., BASF SE, Ernesto Ventos SA, Firmenich SA, Givaudan SA, Huabao International Holdings Ltd., International Flavors and Fragrances Inc., Kerry Group Plc, McCormick and Co. Inc., Ogawa and Co. Ltd., Robertet SA, S H Kelkar and Co. Ltd., Sensient Technologies Corp., Solvay SA, Symrise AG, T. Hasegawa Co. Ltd., Takasago International Corp., and V. Mane Fils |
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Market dynamics |
Parent market analysis, Market forecast, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, Market condition analysis for forecast period. |
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Customization purview |
If our report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
We can help! Our analysts can customize this market research report to meet your requirements.
1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by Type
7 Market Segmentation by Product
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Opportunity/Restraints
11 Competitive Landscape
12 Competitive Analysis
13 Appendix
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