Flavor and Fragrance Market - Growth, Trends, COVID-19 Impact, and Forecasts (2021 - 2026)

The Flavor and Fragrance Market is segmented by Source (Natural and Synthetic), Application (Food, Beverages, and Beauty and Personal Care), and Geography (North America, Europe, Asia-Pacific, South America, and Middle-East and Africa).

Market Snapshot

Flavor & Fragrance Market
Study Period: 2016 - 2026
Base Year: 2020
Fastest Growing Market: Asia Pacific
Largest Market: North America
CAGR: 5.91 %

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Market Overview

The flavor and fragrance market was valued at USD 3024.3 million in 2020, and it is estimated to register a CAGR of 5.91% during the forecast period (2021 - 2026).

The COVID-19 impact on the industry was evident during the initial few months of market lockdowns, followed by supply chain disruptions. However, countries rapidly adjusted their systems with the crisis and made the agricultural and food sector running during the pandemic, leading to a quick recovery of the industry sales.

The overall flavor industry runs over consumer demand to experience the most nuanced and subtle flavor in food, with the taste being the most specific factor influencing the purchase decision of a consumer. The organization reveals that the importance of taste has increased since 2018, with about 86% of consumers choosing taste over other food attributes prior to their purchase.

In the fragrance application, consumer goods are projected to be the largest segment. The rise in disposable income and changing the lifestyle of consumers are fuelling the demand for high-end cosmetics, detergents, soaps, perfumes, and other household and personal care products. This, in turn, is contributing to the overall growth of the consumer products segment. The spending pattern of consumers in developing countries has been increasing, especially in recent years. This trend is expected to drive the market in developing nations further.

Scope of the Report

Flavors and fragrances create scents and tastes for use in a broad range of consumer products, including prepared foods, personal care and household products, fine fragrances, cosmetics, and beverages. The flavor and fragrance market is segmented by source, which includes natural and synthetic. Based on the application, the market is segmented as food, beverages, and beauty and personal care. The food segment is further sub-segmented into savory snacks, dairy products, bakery, confectionery, meat products, and others. By geography, the report includes North America, Europe, Asia-Pacific, South America, and Middle-East and Africa. For each segment, the market sizing and forecasting have been done in value terms (USD million).

By Source
Natural
Synthetic
By Application
Food
Savory and Snacks
Dairy Products
Bakery
Confectionery
Meat Products
Other Food Applications
Beverages
Beauty and Personal Care
By Geography
North America
United States
Canada
Mexico
Rest of North America
Europe
Spain
United Kingdom
Germany
France
Italy
Russia
Rest of Europe
Asia-Pacific
China
Japan
India
Australia
Rest of Asia-Pacific
South America
Brazil
Argentina
Rest of South America
Middle-East and Africa
South Africa
United Arab Emirates
Rest of Middle-East and Africa

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Key Market Trends

Growing Demand for Smoked Flavors and Compounded Flavors

Smokey flavors are majorly used in snack foods, meats, seasonings, sauces, cheeses, honey, and salt. However, smoked flavors are witnessing significant demand in dessert, beverages, soups, confectionery, and various other sweet and savory applications from the last few years, which is changing the market dynamics. According to FONA International Inc., more than 193 smoke-flavored products were introduced in 2016, exceeding the 2015 figures, and the product launch is expected to witness a double-digit growth rate during the forecast period.

Additionally, key players in food flavors are also focusing on developing natural smoked flavors to cater to the demand for natural flavors in the market. In 2017, Bell Flavors & Fragrances developed a number of smokeless smoke flavors, which it calls "a natural alternative to traditional liquid smoke" that can be customized.

Flavor and Fragrance Market1

North America Leads the Global Market

The North American market for flavor and fragrance is mature and quite stable. Hence, there is a high potential for transformed growth, as the market recovers from the economic downturn. The United States is the largest market in the region, followed by Canada, owing to the high consumption of convenience and processed food. Owing to the United States' fast-paced food and beverage industries, foreign players are expanding their footprints in the country to deliver the most innovative nutritional flavors to cater to the increasing demand of consumers.​ In 2018, Firmenich, which is a European company, expanded its presence in the country by opening a manufacturing plant in California to deliver tailored taste and nutrition solutions to consumers, including a unique range of organic offerings.​

Flavor & Fragrance Market2

Competitive Landscape

The flavor and fragrance market is highly competitive, with key players competing for major market share and small regional players catering to smaller regions to acquire nearly half of the market share. Key players are majorly based in North American and European regions. Key strategies adopted by the players in the market are acquisitions, expansions, innovations, and new product launches. Some major players in the market studied include International Flavours & Fragrances, Merck Group, and Sensient.

Recent Developments

  • In October 2020, IFF announced the opening of a new Dubai Taste Creation Center in the United Arab Emirates to serve its customers’ unique needs better and drive growth in the African, Middle Eastern, Turkish, and Indian markets. The new lab will support both the creation and application needs of all key categories, including snacks, beverages, savory, sweet, and dairy.​
  • In February 2019, Solvay started offering two new natural vanillin solutions, including Rhovanil Natural CW and Rhovanil US NAT, which is globally recognized as a natural ingredient for the US food market, catering to this rising consumer demand for GMO-free, natural, and true-to-nature products.​
  • In August 2018, Kerry Group made an agreement with global chemical and ingredient distributor, Univar, to distribute Kerry’s products across four European markets, which include the United Kingdom, Ireland, Spain, and Portugal. This agreement helped the company to enhance its product portfolio in the larger marketplace.​

Table of Contents

  1. 1. INTRODUCTION

    1. 1.1 Study Deliverables and Study Assumptions

    2. 1.2 Scope of the Study

  2. 2. RESEARCH METHODOLOGY

  3. 3. EXECUTIVE SUMMARY

  4. 4. MARKET DYNAMICS

    1. 4.1 Market Drivers

    2. 4.2 Market Restraints

    3. 4.3 Porter's Five Forces Analysis

      1. 4.3.1 Threat of New Entrants

      2. 4.3.2 Bargaining Power of Buyers/Consumers

      3. 4.3.3 Bargaining Power of Suppliers

      4. 4.3.4 Threat of Substitute Products

      5. 4.3.5 Intensity of Competitive Rivalry

  5. 5. MARKET SEGMENTATION

    1. 5.1 By Source

      1. 5.1.1 Natural

      2. 5.1.2 Synthetic

    2. 5.2 By Application

      1. 5.2.1 Food

        1. 5.2.1.1 Savory and Snacks

        2. 5.2.1.2 Dairy Products

        3. 5.2.1.3 Bakery

        4. 5.2.1.4 Confectionery

        5. 5.2.1.5 Meat Products

        6. 5.2.1.6 Other Food Applications

      2. 5.2.2 Beverages

      3. 5.2.3 Beauty and Personal Care

    3. 5.3 By Geography

      1. 5.3.1 North America

        1. 5.3.1.1 United States

        2. 5.3.1.2 Canada

        3. 5.3.1.3 Mexico

        4. 5.3.1.4 Rest of North America

      2. 5.3.2 Europe

        1. 5.3.2.1 Spain

        2. 5.3.2.2 United Kingdom

        3. 5.3.2.3 Germany

        4. 5.3.2.4 France

        5. 5.3.2.5 Italy

        6. 5.3.2.6 Russia

        7. 5.3.2.7 Rest of Europe

      3. 5.3.3 Asia-Pacific

        1. 5.3.3.1 China

        2. 5.3.3.2 Japan

        3. 5.3.3.3 India

        4. 5.3.3.4 Australia

        5. 5.3.3.5 Rest of Asia-Pacific

      4. 5.3.4 South America

        1. 5.3.4.1 Brazil

        2. 5.3.4.2 Argentina

        3. 5.3.4.3 Rest of South America

      5. 5.3.5 Middle-East and Africa

        1. 5.3.5.1 South Africa

        2. 5.3.5.2 United Arab Emirates

        3. 5.3.5.3 Rest of Middle-East and Africa

  6. 6. COMPETITIVE LANDSCAPE

    1. 6.1 Most Active Companies

    2. 6.2 Most Adopted Strategies

    3. 6.3 Market Share Analysis

    4. 6.4 Company Profiles

      1. 6.4.1 Merck Group

      2. 6.4.2 Firmenich SA

      3. 6.4.3 International Flavors & Fragrances Inc.

      4. 6.4.4 Kerry Group PLC

      5. 6.4.5 Sensient Technologies Corporation

      6. 6.4.6 Takasago International Corporation

      7. 6.4.7 Archer Daniels Midland Company

      8. 6.4.8 Solvay SA

      9. 6.4.9 BASF SE

      10. 6.4.10 Corbion NV​

    5. *List Not Exhaustive
  7. 7. MARKET OPPORTUNITIES AND FUTURE TRENDS

  8. 8. IMPACT OF COVID-19 ON THE MARKET

**Subject to Availability

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Frequently Asked Questions

The Flavor and Fragrance Market market is studied from 2016 - 2026.

The Flavor and Fragrance Market is growing at a CAGR of 5.91% over the next 5 years.

Asia Pacific is growing at the highest CAGR over 2021- 2026.

North America holds highest share in 2020.

Sensient Technologies Corporation, International Flavors & Fragrances Inc., Merck Group, Solvay, Kerry Group are the major companies operating in Flavor and Fragrance Market.

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