Industry Experts Address Evolving Materials Sourcing Landscape, Challenges in Logistics in F&F

As factors such as climate change and geopolitical tensions continue to put strain on natural resources, companies in the flavor and fragrance industries are adapting their sourcing strategies.

Perfumer & Flavorist+ reached out to  Dean Anthony, chief executive officer of Monova Food Ingredients; Captain T.R. Muralidharan, managing director of Asean Aromatics Private Limited; Bhuvana Nageshwaran, director of F&F at Ultra International Limited; Dimitar Petkov, co-founder and business development manager at Essential Oils and Herbs Ltd; Ambre Pelissier, director at SCA3P; and Lillian Wu, founder of ILITAKAO International to get their thoughts on how this area of their business has changed and when they see on the horizon.

How have you seen the materials sourcing landscape evolve over the last decade in the flavor and fragrance industry?

Dean Anthony [DA]: This is a fascinating subject, as global challenges affect even the most modest of procurement demands. There is a generational decoupling, and in my view, this exacerbates the demands placed on the traceability, materials sourcing, and logistical teams. Dean Anthony, chief executive officer of Monova Food IngredientsCourtesy of Monova Food Ingredients

Capt T.R. Muralidharan [TRM]: Having spent over 30 years in the fragrance & flavor industry, the sourcing of several raw materials have seen new geographical areas coming up. To emphasise on one such example from my 15 years experience specializing in Indian Santalam album, famously known as Indian sandalwood, I’ve seen the sandalwood scene rapidly evolve. India was the primary, undisputed destination for santalum album, [but it is] now being cultivated in other parts of the world due to certain factors such as sustainability and legality. We are now seeing the resurgence of Indian sandalwood with active support from the government of India. The government forest department (Mysore and others) are conducting  frequent auctions for sale of legal sustainable sandalwood. 

Bhuvana Nageshwaran [BN]: Over the last decade, materials sourcing in the flavorBhuvana Nageshwaran, director of F&F at Ultra International LimitedCourtesy of Ultra International Limited and fragrance industry has become increasingly dynamic, driven by a greater focus on sustainability, traceability, and quality. There has been a noticeable shift towards more transparent supply chains, with brands and consumers demanding greater visibility regarding the origins of ingredients. Innovations in technology, such as blockchain and advanced data systems, have enabled companies to trace materials from farm to final product more efficiently. Additionally, there has been a greater emphasis on sourcing raw materials responsibly, ensuring that environmental and social standards are met.

Dimitar Petkov [DP]: Over the past decade, the sourcing of essential oils has shifted significantly toward sustainability,  traceability, and ethical production. Bulgaria,Dimitar Petkov, co-founder and business development manager at Essential Oils and Herbs Ltd renowned for its high-quality rose and lavender  essential oils, has seen producers increasingly adopt organic farming practices and advanced  distillation techniques to meet global demand. However, economic pressures and shifting agricultural policies have placed traditional producers  under immense strain. Family farms—once the backbone of the essential oil industry—are  struggling to survive due to fluctuating market prices, rising production costs, and labor  shortages. Many smallholders are being forced to abandon traditional cultivation, leading to  significant changes in rural landscapes and livelihoods. 

Ambre Pelissier [AP]: Over the past decade, we've seen significant variations inAmbre Pelissier, director, SCA3P supply and demand within the essential oils lavender industry, which we represent. The Covid-19 pandemic boosted consumption, prompting growers to plant. Demand subsequently weakened, and prices fell sharply against a backdrop of overproduction. After several years of crisis, demand seems to be picking up again, while supply is declining following a major grubbing-up in a gloomy market context. Demand for natural, certified, and responsibly sourced products, seems to be increasing. The international geopolitical context and climate deregulation have also generated new demand for French origin as part of derisking strategies.

How has consumer demand for natural and organic products impacted your approach to sourcing materials?

Lillian Wu [LW]: Consumers and brands are now more concerned about whereLillian Wu, founder of ILITAKAO InternationalCourtesy of ILATAKAO International raw materials come from, how they are grown and whether the sourcing supports sustainability. For us, this shift aligns with our sourcing philosophy. Our jasmine, osmanthus, and hybrid rose are not just used for fragrance, they are also supplied to tea plantations in Taiwan. Because tea production is regulated under strict food safety laws, every botanical ingredient we source must meet the highest standards of traceability, purity and safety. 

[TRM]: The awareness about insecticides and pesticides and their impact on human health and wellbeing has increased significantly over the last few years. So much so that organic cultivation is being taken up on a much larger scale. Consumers are more aware of what now goes into a product and watch trends veryCaptain T.R. Muralidharan, managing director of Asean Aromatics Private LimitedCourtesy of Asean Aromatics Private Limited closely to have a more transparent understanding of what to buy and how it enhances their experience. Our vendors are now showing keen interest on how natural ingredients are grown and sourced. We are encouraging co-operative societies run by farmer unions to cultivate various essential oil bearing plants in an organic manner.

[BN]: The growing consumer demand for natural and organic products has led to a fundamental shift in how materials are sourced. We are now seeing more investments in organic certification processes, as well as partnerships with sustainable farms and production facilities. It has also led to an increased demand for raw materials that are not only natural but also free from harmful chemicals and GMOs. We are prioritizing organic certifications and working with trusted suppliers who meet high sustainability and ethical standards.

[DP]: The surge in consumer preference for clean-label, natural, and organic products has reshaped  sourcing strategies. Bulgarian producers are expanding pesticide-free cultivation and seeking  certifications like ECOCERT and USDA Organic to meet strict regulatory and market  requirements. 

Beyond compliance, industry players are also investing in biodiversity conservation, sustainable  harvesting, and fair-trade initiatives. However, for true sustainability, the industry must go  beyond certification and ensure that farmers receive fair compensation for their crops,  incentivizing them to continue traditional farming instead of switching to more commercially  viable but ecologically damaging alternatives.

How are geopolitical factors, such as tariffs or supply chain disruptions, impacting your ability to source and export materials?

[TRM]: Still tariffs will always have a huge impact on businesses. However, various trade agreements between the countries go a long way in reducing tariffs and are beneficial to the participating countries. For instance, the treaty between India and Japan allows us to export duty-free. Similarly the treaty between India and Indonesia allows us to import without customs duty.

[BN]: Geopolitical factors like tariffs, trade wars, and supply chain disruptions have significantly impacted material sourcing and export capabilities. For instance, tariffs on raw materials or finished goods can increase costs, leading to the need to reconsider supply chain strategies or find alternative sources. Trade barriers or political instability in key sourcing regions have also created a level of uncertainty. In some cases, we've had to diversify suppliers and explore new regions to mitigate risks. Additionally, ongoing supply chain disruptions, such as those caused by the pandemic or extreme weather events, have highlighted the need for greater flexibility and resilience in our sourcing and distribution networks.Raw materials like sandalwood have been increasingly challenging to source.Madeleine Steinbach at Adobe Stock

What new trends do you anticipate will shape materials sourcing and global trade in the coming years?

[DA]: We must work harder and closer with our raw material manufacturers in partnerships at their locations. Maintaining the highest levels of integrity while protecting our intellectual property is always a challenge, but in today's geopolitical landscape it is more mission-critical than ever. In my experience, the expansion and contraction of market demands is the watermark of our profession. We were good at it back in the day, and even better at it today. I anticipate the optimism of youthful contributors shaping the most positive trade routes yet to be pioneered.

[BN]: In the coming years, I anticipate that sustainability will continue to be a major trend influencing material sourcing. As companies face mounting pressure to reduce their carbon footprints, there will likely be increased investments in sustainable materials and eco-friendly packaging. Additionally, innovations in biotechnology may give rise to new sustainable materials that could transform sourcing practices. Another trend will be the continued rise of regional sourcing, as companies seek to mitigate risks related to international supply chain disruptions. Lastly, the integration of digital tools such as blockchain for greater transparency and traceability will be crucial for meeting consumer demands for accountability in sourcing practices.

[LW]: While consumers are becoming more aware of natural and organic products, I believe that awareness alone isn’t enough. "Organic" is often a business tool. Large-scale organic farming dominates the organic industry, shaping certifications, supply chains, and pricing structures to fit profit-driven models.  And many “organic” certifications can be manipulated, or selectively applied to fit business needs. Let’s be honest—there are plenty of ways to work around regulations in the industry. Consumers assume that an organic label automatically means better, safer, and more environmentally friendly, but that’s not always the case.  

Small farmers and businesses who genuinely follow organic principles struggle to stay profitable. They don’t have the money for certifications, and they can’t produce at the scale that big companies do. Even though they might be growing and processing their materials with far more care, they’re often left behind in the market. What they do doesn’t  make financial sense in today’s economy.

I think it's time to rethink what “organic” really means. In the future we may move beyond organic certification and prove real transparency in sourcing. By strengthening direct relationships with farmers and small producers to ensure ethical practices.  And one more, it's about recognizing and valuing the people who dedicate their lives to cultivating high-quality, sustainable ingredients. By supporting them, we can share this joy with customers who believe in the same values.

[AP]: We believe that the demand for natural products and products sourced ethically and responsibly, with a short supply chain and full traceability, will continue to grow as consumers increasingly expect sustainability. We are also convinced that geopolitical tensions will lead to a change in cultivation areas and more protectionism. Finally, climate change could also impact the distribution of crops at the global level. This context could lead to a revaluation of prices at first but could also subsequently create economic imbalances, and a potentially even more volatile environment.