Vanillin Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022-2027)

Market Overview

The global vanillin market was valued at USD 886.5 million in 2021, and is projected to grow by registering a CAGR of 8.13% during the forecast period, 2022-2027.

The vanillin market has been widely affected by the COVID-19 pandemic at different stages, right from the procurement of raw materials to the production of the end product. Initially, manufacturers faced challenges in sourcing their raw materials from different parts of the world due to the lockdown, while the shortage of labor for operating the manufacturing facilities and transportation was a major setback for many manufacturing units. For instance, according to The Observatory of Economic Complexity (OEC), the export of vanilla beans decreased by 17.4%, from USD 1.14 billion to USD 937 million between 2019 and 2020. 

Over the review period, the growth of the vanillin market is driven by its diversified applications in end-user industries, from food and beverages to pharmaceuticals. Due to the continued trend of natural ingredients, the market has seen an increase in demand for natural vanillin. Major food companies such as Nestle, Unilever, and Kellogg’s had vowed to eliminate artificial flavors and ingredients from their products. However, with respect to vanillin, the availability of natural vanillin has been scarce, and this has been a major challenge for the food manufacturers who want to shift to natural ingredients.

Scope of the Report

Vanillin is a crystalline phenolic aldehyde that is produced synthetically or from the extraction of vanilla beans and is used in diverse industries for its flavor and fragrance functionalities. The global vanillin market is segmented by type, by application, and geography. By type, the market is segmented into natural vanillin and synthetic vanillin. The market studied is segmented by application into food and beverage, pharmaceuticals, fragrances, and other applications. The report also analyzes the emerging and established geographical regions, covering regions such as North America, Europe, Asia-Pacific, and the Rest of the World (South America, and Middle-East and Africa). The report offers market size and forecasts in value (USD million) for the above segments.

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Key Market Trends

Deficient Vanilla Production Drives Synthetic Market

Global 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. Synthetic vanillin is now used more often than natural vanilla extract as a flavoring agent in foods, beverages, and pharmaceuticals due to the difficulties in sourcing natural vanillin ingredients and the costs involved. Synthetic vanillin exhibit higher functionality and stability in products and is more commonly used in most applications. Synthetic vanillin manufacturers have been working on value addition to their offerings. For instance, in January 2022, Foodmate Co. Ltd. declared the launch of the FoodVanil product, which steadily releases the essence of vanilla beans at more than 200℃ temperatures. This increased stability of vanillin at higher temperatures opens up new application areas for vanillin thus, driving the market growth.

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 high costs for natural vanilla, reformulation challenges, complicated labeling laws, and difficult regulations regarding the natural label.

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