Global Flavor and Fragrance Demand to Reach $26.5 Billion in 2016

Flavor and fragrance demand -- including demand for flavor and fragrance blends, essential oils and natural extracts, and aroma chemicals -- is forecast to increase 4.4 percent per annum to $26.5 billion in 2016.  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.  Rising production of processed foods, due in large part to growth in incomes in developing countries, will bolster flavor consumption given that processed foods require the use of more flavor to maintain good taste.  Growing affluence in emerging economies will also benefit demand in the toiletry and cleaner market, as more individuals will be able to afford these fragrance-containing goods. These and other trends, including market share and product segmentation, are presented in World Flavors & Fragrances, a new study from The Freedonia Group, Inc., a Cleveland-based industry market research firm.  

Going forward, the most robust gains in demand for flavors and fragrances will be realized in the developing economies of the Asia/Pacific region, Central and South America, and the Africa/Mideast region.  Eastern Europe will exhibit growth in line with the global average but still significantly faster than developed areas.  China and India will exhibit particularly rapid advances, boosting consumption of flavors and fragrances in the Asia/Pacific region.  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.  Though the fastest growth will be experienced in developing countries, industrialized countries will continue to account for the majority of demand, with the US alone accounting for 26 percent 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, will arise from growing urbanization, rising incomes, and increasing interest in Western foods and lifestyle.  These trends will lead to increased output of processed and convenience foods.  Furthermore, developing regions will see the fastest advances in the consumption of carbonated beverages, one of the leading outlets for flavors.  In the toiletry and cleaner market, fragrance demand will also realize healthy advances as production of toiletries and cleaners rises with personal consumption expenditures in emerging economies. 

The Freedonia Group is a leading international business research company, founded in 1985, that publishes more than 100 industry research studies annually. This industry analysis provides an unbiased outlook and a reliable assessment of an industry and includes product segmentation and demand forecasts, industry trends, demand history, threats and opportunities, competitive strategies, market share determinations and company profiles.