Report: F&F Industry Stable Through 2010

Despite continued economic weakness in 2009, the global flavor and fragrance industry is expected to remain stable throughout the remainder of the year and 2010, with growth returning in future years, according to a new report from Koncept Analytics. The flavor and fragrance industry's key customer base—particularly food and beverage, pharmaceuticals, home, and personal care—"are less cyclical than other industries," the analysis notes. 

The report red flags a number of factors the industry will have to overcome for success:

  • High raw material prices.
  • Prolonged consumer and customer destocking, which could potentially lead to negative growth.
  • Ongoing softness in the luxury segment.

The analysis also provides a number of bright spots:

  • The "basic necessity" status of many product segments served by the flavor and fragrance industry, as mentioned above. As a result, the report concludes that the economic crisis "does not threaten the survival" of the industry.
  •  The flavor segment's ongoing "dominance" in the industry, in part as a result of rising soft drink, fast food and snack consumption in developing markets.
  • The ongoing, if slowing, growth of markets in Asia and Eastern Europe.


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