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

World production of natural vanilla is low as compared to the demand from across the globe. Less than 1% of vanilla flavor comes from actual vanilla orchids. With demand on the upswing, trade in the coveted flavor is out of balance. The supply of vanilla beans in the world is low as compared to the demand it has across various end-user industries. With few producing countries and the high demand for vanilla, it is subject to volatile price development. A shortage in 2017 caused rising prices of vanilla, with prices dropping by a third again in 2019. Moreover, the production of natural vanilla from vanilla beans is extremely labor-intensive. Due to the high cost of vanilla beans, flavor/fragrance companies have long used chemistry to develop a cheaper, chemically synthesized vanillin. Food makers are confronting skyrocketing costs for natural vanilla, reformulation challenges, complicated labeling laws, and difficult regulations regarding the natural label.

Asia-Pacific dominates the global vanillin market regarding market revenue. Moreover, Asia-Pacific is expected to expand at a substantial growth. China is considered as one of the major producers and consumers of vanilla, according to the data by the UN Food & Agriculture Organization and was the largest exporter of vanillin in 2018. Similarly India is emerging as one of the prominent markets of vanilla since the last few years, as stated by ISS Institute Inc. Strategically, one of the leading vanillin producers, Camlin Fine Sciences Ltd acquired 51% stake in Ningbo Wanglong Flavors and Fragrances Company Limited (China) and gained a leading position among the vanillin producers in the global market. Europe held the second largest share, followed by North America, owing to the increasing chemical and pharmaceutical units in the region.