THE OPPORTUNITY

Global Flavor and Fragrance Market Opportunity 2015-2020

According to a new market report published by Lucintel, the future of the flavor and fragrance market looks good with opportunities in the dairy, soap & detergents, fine fragrance and cosmetic & toiletries industries. The global flavor and fragrance market is forecast to grow at a CAGR of 3.6% from 2015 to 2020. The major drivers of growth for this market are growth of end use applications, growing urbanization and changing lifestyle.

In this market, aroma chemicals and essential oils are the major raw materials used for making flavor and fragrance compounds. Lucintel predicts that the demand for fragrance is likely to experience the highest growth in the forecast period, supported by growing demand in end use applications. Major end use application for flavor are beverage, savory, confectionery, and dairy for flavor, while for fragrance it is soap & detergents, fine fragrance, cosmetic & toiletries, and household & air care. On the basis of comprehensive research, Lucintel forecasts that diary, savory, fine fragrance, cosmetics & toiletries, and soaps & detergents industries are expected to show above average growth during the forecast period.

Within flavor and fragrance market, beverage application is likely to remain as the largest segment for flavor during the forecast period, while soap & detergents is for fragrance market.

North America is expected to remain the largest market due to growth in end use applications. Asia Pacific and the Rest of the World are expected to witness significant growth over the forecast period because of increase in disposable income and changing lifestyle.

For market expansion, the report suggests innovation and new product development to enhance the performance of flavor and fragrance. The report further suggests the development of partnerships with customers to create win-win situations and development of better product for the end user.

Emerging trends, which have a direct impact on the dynamics of the industry, include increased use of biotic ingredients and capacity expansion by major players in emerging markets. Givaudan, Firmenich, IFF, Symrise, and Takasago are among the major suppliers of the flavor and fragrance. Some companies are opting for M&A as a strategic initiative for driving growth.

Note: Lucintel is a leading global strategic consulting and market research firm.