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Report: Flavor & Fragrance Market Expected to Grow to $26.5 Billion by 2016
Posted: October 3, 2012
Flavor and fragrance demand—including demand for flavor and fragrance blends, essential oils and natural extracts, and aroma chemicals—is expected to rise 4.4% a year to reach $26.5 billion in 2016, according to a new report.
Market research firm The Freedonia Group says in its report "World Flavors & Fragrances" that across all markets, increasing consumer interest in natural products will drive value demand going forward, as these flavor and fragrance ingredients tend to be more expensive.
The report says rising production of processed foods, due in large part to growth in incomes in developing countries, will bolster flavor consumption since processed foods require the use of more flavor to maintain good taste. It also predicts that growing financial affluence in emerging economies will bolster demand in the toiletry and cleaner market, as more individuals become able to afford fragrance-containing goods.
The study forecasts the most robust gains in demand for flavors and fragrances in the developing economies of the Asia/Pacific region, Central and South America, and the Africa/Mideast region. Eastern Europe is expected to show growth in line with the global average, but still significantly faster than developed areas. China and India are projected to have particularly rapid advances, boosting consumption of flavors and fragrances in the Asia/Pacific region.
The study also notes that as developing regions continue to capture an increasing share of the global market, leading flavor and fragrance producers will continue to make investments in these areas. Although the report predicts the fastest growth in developing countries, it adds that industrialized countries will continue to account for the majority of demand, with the US alone accounting for 26% of total demand in 2016.
Other countries with a significant share of the market include Japan, China, France, Germany and India. Support for the largest market, food and beverages, is projected to arise from growing urbanization, rising incomes and increasing interest in Western foods and lifestyle. These trends, the report says, will lead to increased output of processed and convenience foods.
Finally, the study expects developing regions will see the fastest advances in the consumption of carbonated beverages, which the report says is one of the leading outlets for flavors. In the toiletry and cleaner market, fragrance demand is also projected to advance as production of toiletries and cleaners rises with personal consumption expenditures in emerging economies.