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Organic and sustainable eating are hot trends nowadays, but one sector’s growth suggests the death of processed food may be exaggerated.
The resilience and growth of the flavors and fragrances (F&F) market is a testament to the fact that tastes and scents are here to stay, even as the largest firms in the space fly mostly under the radar. The nearly $25 billion sector has grown steadily for at least the last four years, according to Leffingwell and Associates, with analysts predicting at least 4 percent annual growth through 2020.
It’s not hard to understand why. Much of the food, drink and toiletries consumers use contain countless essences and the majority of them are produced by the F&F sector’s biggest names.
Overall, analysts see the sector as both competitive and lucrative. According to UBS U.S. Chemical Equity Research Director John Roberts, F&F products are consumed on a constant basis, and are less sensitive to changes in economic growth. Separately, Jonathan Feeney of Athlos Research described the industry as invaluable, rich in intellectual property and steadily consolidating.
Important trends in the flavor and fragrance industry include the following:
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Strong consumption growth in developing countries, driven by GDP growth and the expansion of the middle class.
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Increased interest in health and wellness. Demand for “better-for-you” foods—foods with reduced salt, fat or calorie content—is growing. Sophisticated flavor systems can help food manufacturers reduce the salt or calorie content of their products without sacrificing taste.
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Consumer interest in “clean-label” food products. A clean-label product is generally defined as one that is wholesome, minimally processed, and free of artificial or chemical-sounding ingredients, including artificial flavors.
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Heightened concerns about the allergic potential of widely used fragrance ingredients. Researchers are working to develop new, non-allergenic and non-sensitizing ingredients that have the same organoleptic properties as the traditional ingredients they replace.
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Growing demand for natural and organic ingredients, which are widely perceived by consumers as safer or better than artificial or synthetic ones.
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Strong demand for convenience foods, including microwaveable and prepared foods, in developed markets. This trend has generally increased the demand for flavors.
Worldwide consumption of F&F products is expected to grow at an average annual rate of 5–6% during the next five years. The demand for F&F products is fairly mature for most applications in the developed countries, but there is potential for growth in China, South-East Asia, South Asia (especially India), Latin America, and Central and Eastern Europe.
Thus, in order to position our ourselves to be a truly global company with worldwide recognition in this lucrative and viable business, we should also prioritize contributions to the health and safety of people in the community and protection of the environment while responding to diversified needs in an immediate and precise manner via marketing, research & development, and manufacturing in close contact with the community for the sustainable growth of the our company. Consistently, and relentlessly, pursuing “quality of life for the whole society” through the development of excellent products.
