Flavors & Fragrances market COVID-19 Impact,Trends & Business Statistics By 2025

Posted by Mrudula Anil Karmarkar on October 19th, 2021

The global flavors and fragrances market size is anticipated to reach USD 28.64 billion by 2025, according to a new report by Grand View Research, Inc. It is projected to expand at a CAGR of 4.7% during the forecast period. Flavors and fragrances deliver long-lasting sensory impressions, when applied through medical products, beverage, food, and other substances. These products enrich the overall aesthetic value and appeal of consumer goods.

Flavors and fragrances are generally manufactured using essential oils and volatile chemicals to enhance existing flavors or to provide a precise flavor. The products are primarily categorized into natural and synthetic. Rising demand for natural and fresh products has added to exponential growth of the market.

Increasing demand for ready-to-eat and convenience foods, health and wellness foods coupled with technological advancements are predicted to trigger the flavors and fragrances market growth. Increasing consumer disposable income along with rapid industrialization in developing countries such as India and China is estimated to fuel the food flavors market.

Owing to the massive demand for natural products, forests have been chopped down to develop minute quantity of oil. Numerous arable lands have also been transformed into monoculture farming lands to nurture a single crop or plant gain a particular oil. This, in turn, has led to restricted availability of raw materials for natural products.

Flavor and fragrance producers operate by collaborating with artists, filmmakers, writers, musicians, and scientists to knock into artistic minds to reveal perfumes to new as well as constantly developing creative approaches and territories. Manufacturers also build creative teams which comprise fragrance perfumers, flavorists, and evaluators.

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Food and beverage industry is estimated to register a notable CAGR over the forecast period owing to increasing demand for juices, snacks, processed food, ready-to-eat meals, and other beverages. Mature markets such as U.S. and U.K. have witnessed a high demand for personal care products, predominantly produced using natural ingredients.

Further key findings from the report suggest:

• Aroma chemicals is projected to hold the largest share of flavors and fragrances market with more than 70.0% in terms of revenue by 2025
• Increasing cost of R&D for fragrance compounds is expected to support the demand for aroma chemicals over the forecasts period
• Essential oils are anticipated to grow as the fastest as well as largest emerging natural product segment
• Demand for orange essential oil was valued at USD 1.64 billion in 2018
• Fragrances application segment is predicted to lead the market and is projected to register a CAGR of 5.0% from 2019 to 2025
• Asia Pacific is expected to register the fastest CAGR on account of availability of raw materials and increasing demand

Growing demand for personal care products coupled with food and beverages is projected to trigger market growth over the forecast period. Increasing use of flavors in pharmaceutical, dietary supplements, and nutraceuticals is projected to augment demand in the forthcoming years. The upward trend of health and wellness is anticipated to enhance the preference given to natural flavor ingredients.Manufacturers have integrated their production and distribution channels for better market approachability. Most companies are vertically integrated and produce products that cater to various applications. Manufacturers have to abide by manufacturing and labeling laws, regulations, and guidelines published by regulatory authorities such as Food and Drug Administration (FDA), U.S. Department of Agriculture (USDA), Health Canada, European Food Safety Authority, and World Health Organization (WHO).

Manufacturers also obtain certifications such as Kosher, Halal, and ISO to gain a competitive edge in the market. End-user business activities greatly influence financial conditions as well as operations of raw material manufacturers and suppliers.

Increasing disposable income in developing economies is projected to augment the demand for cosmetics, toiletries, perfumes, and soaps and detergents. This factor is anticipated to drive the market in near future. Natural fragrances are perceived to be safe, healthier and therapeutic. Natural flavor and fragrance ingredients are expected to grow rapidly owing to the rising preference for organic ingredients in food and personal care sector. Manufacturers engaged in developing natural fragrances often charge a green premium on their products.

About Grand View Research

Grand View Research, Inc. is a U.S. based market research and consulting company, registered in the State of California and headquartered in San Francisco. The company provides syndicated research reports, customized research reports, and consulting services. To help clients make informed business decisions, we offer market intelligence studies ensuring relevant and fact-based research across a range of industries, from technology to chemicals, materials and healthcare.