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US Essential Oil and Oleoresin Market: $588.4 m

Posted: July 26, 2007

"US Essential Oils and Oleoresins Markets," a new analysis from Frost & Sullivan, reports that the market's revenues reached $588.4 million in 2006. This is expected to grow to $859.6 million by 2013. The main drivers for this growth, says the report, includes consumers' growing association of natural products with safety and health connotations. This has ramped up the desire for natural ingredients in food and beverage, personal care, and household products. In the flavor segment, natural materials are finding increasing application in confectionary and savory categories. Essential oils are finding use in beverage flavors such as flavored waters, soft drinks, health drinks, fruit-based drinks, tea-based drinks and flavored alcoholic drinks. (The report further notes that essential oils are growing in popularity in fragrances as well.)

Challenges: The analysis points out a number of challenges facing the essential oil and oleoresin market in the United States and beyond, particularly the convenience of synthetics/nature identical materials. These ingredients tend to be preferred due to their affordability, availability and consistency. In fact, because natural raw materials are increasingly popular, they are by definition more difficult than ever to source affordably, which is narrowing profit margins. The report's analysts suggest that the answer lies in product innovation and efficient technology to justify naturals' higher prices. Adding value to products by delivering on innovation and stable global supply chains will be the key to competing successfully.

For a copy of the full report, visit foodandbeverageingredients.frost.com.