Natural Flavors And Fragrances Market Size, Share & Trends Analysis Report By Application (Flavors, Fragrances), By Technology (Extraction, Distillation), By Product (Essential Oils, Dried Crops), By Region And Segment Forecasts, 2022 - 2030

Report Overview

The global natural flavors and fragrances market was valued at USD 9.15 billion in 2021 and is anticipated to expand at a compound annual growth rate (CAGR) of 6.3% from 2022 to 2030. The growth is driven by the growing demand for the product in convenience food and packaged food items. The industry growth was hampered amid the COVID-19 pandemic, as there were several restrictions on the import and export of chemicals coupled with quarantine and lockdown measures acting as some of the key barriers faced by several product manufacturers. The pandemic directly impacted people’s choices, lifestyles, preferences, health, and well-being.

Due to the shortage of labor owing to health concerns, many companies had to shut down their manufacturing units for a long period. Natural fragrances and flavors are derived from natural sources, such as plants and animals. These sources include vegetables, fruits, meat, spices, fish, roots, leaves, and more. It contains rich properties of fruits or vegetables that can be used for various purposes, such as adding flavor to food or instilling fragrance in beverages. Furthermore, natural flavors & fragrances are extensively consumed in the preparation of convenience foods. Food & beverage-producing companies tend to rely on these products owing to their organic nature and less harmful chemical content.

The increasing population coupled with the high disposable individual income in countries like the U.S., the U.K., China, India, Brazil, and South Africa has elevated the consumption of convenience or packaged foods & beverages, such as bakery products, dietary food, flavored drinks, and more. In addition, pharmaceutical companies are producing medicines that are sweet and acceptable to a vast majority of the population. Predominantly for children, the companies tend to mask the bitter taste of medicines with fragrances & flavors to make them easily consumable. Rising awareness about child health is likely to be a major factor stimulating the demand for natural fragrances & flavors in the pharmaceutical industry.

Product Insights

Based on products, the global industry has been further segmented into essential oils, oleoresins, dried crops, herbal extracts, and others. The essential oils product segment dominated the global industry in 2021 and accounted for the maximum share of more than 74.65% of the overall revenue. This high share is attributed to the wide applicability of these products as aromatic and flavoring agents in different end-use applications, such as cleaning & home, food & beverage, medical, and spa & relaxation among others. Orange essential oil witnessed a high demand due to its usage as a raw material in the personal care and detergents market on account of its antioxidant, anti-cancer, anti-depression, and weight loss properties among others.

Orange oil witnessed the highest demand in Europe owing to its high consumption as a flavoring and aromatic agent across diverse end-use industries. The rising geriatric population has fostered the development of medicinal orange oil applications as well. Dried crops are used on an everyday basis in different food items to add extra flavor and color to them. Dried crops need to be stored in an airtight container inside a cabinet to maintain their shelf life for a longer period. They might lose potency very quickly, especially when exposed to heat or sunlight. Dried crops include grapes, beans, tomatoes, pumpkin, and plums among others.

Technology Insights

The distillation technology segment dominated the global industry in 2021 and accounted for the highest share of more than 42.35%. This high share is attributed to various advantages of the process, such as reduced operation cost, improved extraction yield, shorter time of extraction, effective heating, and faster transfer of energy. Traditionally, microorganisms are widely used to produce flavors. This can be attributed to the presence of various volatile as well as non-volatile components with varied chemical and physicochemical properties. Various compounds, including alcohols, aldehydes, dicarbonyls, esters, ketones, lactones, phenolic, methyl, and sulfur, among others, are responsible for the aroma of certain food products.

These compounds are manufactured naturally with the help of microbes and enzymes. Microbes naturally synthesize flavors as secondary metabolites during the fermentation process. The microorganisms-based fermentation process can synthesize molecules high in demand, including nootkatone and valencene. The other technologies used to produce natural flavors & fragrances include encapsulation and extrusion. The encapsulation method is often used to offer protection, isolation, controlled release, and improved stability of volatile flavors and fragrances. This method has been developed to cater to specific end-use applications and their customizable requirements. Since it offers tailor-made solutions, the duration for extraction is extensive compared to other techniques.

Application Insights

The flavors application segment dominated the global industry in 2021 and accounted for the maximum share of more than 53.65% of the overall revenue. Its high share is attributed to the extensive usage of multiple flavors in various end-use industries, especially in foods and beverages like confectionery, convenience food, dairy food, and bakery items. In addition, the usage of flavors in animal feed is also expected to have a positive impact on the global industry. In the beverage industry, not only the taste but also the texture, smell, and color of a product play a key role in its demand. The growing consumer preference for natural ingredients has led to the development of uniquely flavored beverages.

The commonly used fruit flavors in natural sodas include apple, berry, cherry, grapefruit, orange, and lemon, among others. They impart a refreshing and delicious flavor to the beverages. Growing awareness regarding non-toxic and eco-friendly cleaning products is expanding the application scope of essential oils in this segment, which, in turn, is projected to drive the industry. The use of essential oils in natural cleaning recipes leads to the creation of an environment free of toxic chemicals, germs, and grime on account of their antimicrobial and antibacterial properties. This, in turn, is projected to propel the demand for these products in soaps & detergents applications over the forecast period.

Regional Insights

Europe dominated the global market with the highest revenue share of 28.04% in 2021. This is attributed to the increased popularity of ethnic cuisines and growing awareness regarding less sodium intake. Countries, such as the U.K., Germany, Spain, and France, are characterized by the presence of a well-developed food industry, which is the most significant end-user for the product. The presence of advanced end-use industries coupled with growing awareness regarding the benefits of essential oils is estimated to provide significant growth potential for the Europe regional market. In addition, the German economy is considered diverse and is the largest economy in Europe.

Growth in the GDP and expanding population are projected to boost the growth of various sectors including food & beverage, medical services, and spa, which are the key end-users of essential oils. An increase in the disposable income of consumers and growing demand for premium healthcare products in the country is anticipated to boost the product demand over the coming years. Furthermore, the favorable weather conditions for agriculture, low-cost labor, and ample availability of raw materials are some of the factors acting as the driving forces for the region’s growth. Many manufacturing companies are focusing on investments in R&D facilities and expanding their business in the region. Moreover, the change in customer preference toward nutritional and healthy food & beverages in India and China is projected to provide lucrative growth opportunities for the global players.

Key Companies And Market Share Insights

The global industry is characterized by the presence of multinational manufacturing companies that have a prominent hold on the market. The competition in the industry is high owing to the presence of numerous companies and competing based on product portfolio & differentiation and geographical expansion. The key players undertake various strategic initiatives, such as expansion, acquisitions, and partnerships, to strengthen their position in the industry. For instance, Firmenich SA and DSM are going to merge in the current year. These two companies are well-established companies having a diverse portfolio of products. Both companies have a stronghold in natural fragrances and flavors manufacturing. Some of the prominent players in the global natural flavors and fragrances market are:

• MANE

• Keva Flavours Pvt. Ltd.

• DOHLER GmbH

• Blue Pacific Flavours, Inc.

• Stringer Flavours Ltd.

• BIOLANDES

• Young Living Essential Oils, LC

• dōTERRA

• Falcon

• BASF SE

• Symrise

• Firmenich SA

• Givaudan

• International Flavors & Fragrances Inc.

• FLAVEX Naturextrakte GmbH

• Universal Oleoresins

• Manohar Botanical Extracts Pvt. Ltd.

• Sensient Technologies

• Takasago International Corporation

• T. HASEGAWA CO., LTD.

• ROBERTET

• McCormick & Company, Inc.

• Kerry Group plc

• ADM

Natural Flavors And Fragrances Market Report Scope

Global Natural Flavors And Fragrances Market Segmentation

This report forecasts revenue growth at global, regional, and country levels and provides an analysis of the latest industry trends in each of the sub-segments from 2018 to 2030. For this study, Grand View Research has segmented the global natural flavors and fragrances market report based on product, technology, application, and region:

• Product Outlook (Revenue, USD Million, 2018 - 2030)

  • Essential Oils

    • Orange

    • Corm Mint

    • Eucalyptus

    • Pepper Mint

    • Lemon

    • Citronella

    • Patchouli

    • Clove

    • Ylang/Ylang Cananga

    • Lavender

    • Others

  • Oleoresins

    • Paprika

    • Black Pepper

    • Turmeric

    • Ginger

    • Others

  • Dried Crops

  • Herbal Extracts

  • Others

• Technology Outlook (Revenue, USD Million, 2018 - 2030)

  • Fermentation

  • Extraction

  • Distillation

  • Others

• Application Outlook (Revenue, USD Million, 2018 - 2030)

  • Flavors

    • Confectionery

    • Convenience Food

    • Bakery Food

    • Dairy Food

    • Beverages

    • Animal Feed

    • Others

  • Fragrances

    • Fine Fragrances

    • Cosmetics & Toiletries

    • Soaps & Detergents

    • Aromatherapy

    • Others

• Regional Outlook (Revenue, USD Million, 2018 - 2030)

  • North America

    • U.S.

    • Canada

    • Mexico

  • Europe

    • Germany

    • U.K.

    • France

    • Spain

    • Portugal

    • Turkey

  • Asia Pacific

    • China

    • India

    • Japan

    • Southeast Asia

  • Central & South America

    • Brazil

    • Colombia

  • Middle East & Africa

    • UAE

    • Saudi Arabia

    • South Africa