The global flavor and fragrance market is expected to grow to $33.5 billion by 2019, with a compound annual growth rate (CAGR) of 5.8%, according to market researcher BBC Research.
Changing consumer preferences and a growing trend among customers to purchase products with natural ingredients is causing market players to launch a variety of new and innovative products to better position themselves in the global market, the recent Global Markets for Flavors and Fragrances report said.
Potential opportunities exist in the Asian and Latin American regions due to the low cost of raw materials for natural ingredients and the availability of labor, according to the report. The Asian flavor and fragrance market was worth $6.9 billion in 2013 and is anticipated to reach $9.6 billion by 2019, growing at an estimated CAGR of 6.2% from 2014 to 2019.
Strong growth in low-fat and low-carbohydrate foods and beverages will increase demand in the North American flavor and fragrance market. However, Asia will gradually overtake the North American market due to increased growth predicted for this region. Growth in Western Europe, on the other hand, will continue to be moderate because of market maturity as well as consolidation in the industries that use flavor and fragrance.
Rising production of processed foods due, in large part, to growth in developing countries increased flavor consumption because processed foods require the use of more flavors to maintain good taste, according to Natraj Pandal, BCC Research analyst.
Increased penetration of packaged food products and the willingness of consumers to try new flavors and fragrances further boosted growth in the global flavor and fragrance market. However, he said the market is facing various challenges such as the high cost of migration from synthetic to natural sources, lack of transparency in flavor and fragrance patent protection laws, and concerns related to synthetic products.