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The global food flavors market size was USD 14.12 billion in 2019 and is projected to reach USD 19.28 billion by 2027, exhibiting a CAGR of 4.36% during the forecast period.
The food flavors industry is majorly fuelled by the increasing consumption of various packaged food products and beverages. All the packed foods consist of various food additives which include flavoring agents. Owing to the fast-paced lifestyle and increasing working women population, the consumption of ready-to-eat food products are in demand. This directly aids in the growth of this market.
However, the current market for these flavors will get affected due to the global pandemic caused by coronavirus disease (COVID-19). Since most of the countries are in lockdown, the purchasing power of the consumers has negatively impacted the growth of processed food products. Rules and regulations imposed by various governments regarding the gathering of people in places such as all types of markets (hypermarkets, supermarkets, convenience stores, etc.) for the purchase of food products have led to a slight decline in the sales of various food and beverages. Less manpower in the production houses and fewer stocks of food products in various underdeveloped countries have become a threat to the market. On the other hand, closure of all sorts of restaurants, hotels, food chains, etc. is estimated to negatively affect this market. Nevertheless, the market finds its pace to grow in the upcoming years owing to the regular consumption of packaged food products.
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Growing Consumer Inclination towards Organic and Clean-label Ingredients
The growing organic trend in various developing countries and the adoption of clean-label products are factors that aid in the growth of natural food flavors. Consumers are inclined towards the consumption of natural products (chemical-free) and the ingredient label-knowledge are positively impacting the growth of natural flavoring agents. Consumers prefer plant-based and plant-derived ingredients which helps them to lead a healthier lifestyle. The right amount of awareness regarding these natural products among them is also a factor that helps in creating demand for organic ingredients in products.
According to the Organic Trade Association, the sales of organic food in the U.S. in 2017 was US$ 43.3 billion, which is an increase of US$ 3.3 billion from the prior year. The growth rate from 2016-17 was 5.3%.
Consumer Inclination towards Botanicals and Floral Flavors
Floral flavors emerged as one of the major flavor trends as per the 2019 food flavor market trends. Various floral and fruity flavors are added to the bakery products which gives a natural aroma and taste. The fruit flavors are usually paired with botanical flavors, which gives a natural aroma to the food product. Over the past few years, the floral and botanical flavors grew from a niche sector to a larger one. The majority of the floral flavors are used in baked goods and the growth rate of these flavors ranged between 2015-2018 was 132%. Few examples of the flavors used in the bakery products are lemon-lavender cookies, honey-lavender gelato, lemon-violent granola, blackberry-rose marshmallows, and others. The adoption of floral flavors as a trend is majorly attributed to the consumer’s willingness to spend on natural food products and ingredients.
Rising Consumer Awareness regarding Natural Food Flavors Aids Market Growth
A significant number of consumers are aware of the synthetic ingredients that are used in food products. There is a rise in awareness of the usage of natural ingredients and a consumer shift towards the consumption of clean-label ingredients. This factor propels the usage of natural food flavors. The manufacturers coping with the growing trend and are producing products that are naturally-sourced and provides clean-label food products. The usage of natural flavors helps to retain the ethnicity of the food products and provides an authentic taste and flavor. In recent years, synthetic flavors such as pyridine, benzophenone, styrene, and ethyl acrylate are identified to be carcinogenic. These synthetic flavors are thus replaced by various natural flavors. Majority of natural flavorings act as a preservative, which subsides the usage of artificial preservatives.
Stringent Regulations constraints the Growth of the Market
The food flavoring industry faces a legal obligation in order to abide by various rules and norms imposed by regulatory affairs. The regulatory standards varies from one country to the other, but the common goal is to maintain high quality of the flavors. Such regulations ensure proper labelling of the ingredients and the right usage of the flavoring agents usage in the food products. These norms and regulations imposed by various regulatory bodies will constraint the market growth as it delays the new product launch or development by the manufacturers, thereby leading to product recalls. Therefore, the stringent regulations imposed by multiple nations may negatively impact the global food flavoring agents market.
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Natural Food Flavors Hold Largest Market Share, with its Authentic Taste and Flavor
The natural food flavors market holds the largest market share owing to various regional cuisine influences. Natural extracts from various plants provide the ethnicity of a regional dish, unlike synthetic flavors. Various food chains are adopting the usage of these natural flavors to unleash authentic taste. Additionally, the young generation prefers to use various botanicals and adaptogens in their culinary. This is due to the awareness regarding the harmful effects of synthetic flavorants. Prolonged usage and consumption of artificial flavoring agents lead to various health issues such as skin rashes and cancer to an extent. Various manufacturers are engaged in the production of natural food flavors. Innovative usage of the natural sourced raw materials will create growth opportunities for the manufacturers.
On the other hand, the usage of synthetic food flavors grows at a moderate CAGR, this is owing to the decreased consumer preference of these artificial food additives. The production of these flavors are cost-effective, which is the reason for the manufacturers to adopt the usage of it in their food products. Whereas, the natural-identical flavors helps to mimic the natural flavoring agents used in the food products. However, various research practices are in pipeline to develop natural-identical flavors on a larger scale as it has better scope in the future.
The Bakery Sector to hold Largest Market Share, Owing to Increased Consumption of Packaged Baked Goods
The bakery sector contributes a decent share in the global food and beverage market. Improving the economy has led to an increase in the purchase of various packaged food products, among which packed bakery products holds a large share. The emergence of allergen-free and gluten-free bakery products have created a positive impact on the market. Use of various flavorful nuts gains traction among the youth. The bakery industry tries unusual pairing of flavors, such as sweet and savory. Such innovations provide an excitement among the consumers to try such new flavors in the market. Also, the trend of seasonal and limited edition attracts various consumers. Thus, the increased consumption of bakery products aids in the expansion of the food flavor additives market.
According to the American Bakers Organisation, in 2018 the baked goods industry grew at a rate of 8% in the overall food and beverage sales across the stores.
Asia Pacific Food Flavors Market Size, 2019 (USD Billion)
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Asia Pacific to Exhibit Highest Growth due to Emerging Processed Food Industry
Asia Pacific market is growing at a rapid pace due to the large consumption of processed food products and beverages. Asia Pacific is an emerging economy which consists of a large population and rising working professionals. Population dynamics being one of the major macro-economic factors supports the food flavors market growth. In addition to this, investments from various multinationals, especially from major nations such as China, India, and Japan will create opportunities to various mid-tier companies. The rise in the number of working women population and a busy lifestyle led to the consumption of various ready-to-eat/drink products.
Moreover, the consumption of confectionery products and baked products in the region is also expected to hold a high potential for growth. This is owing to a large consumer base for bakery goods. A steep downfall in the market is observed due to the global pandemic condition caused by COVID-19. All the countries in the region were locked down, only the essential food items were served. Airports of major economies such as Singapore, Malaysia, India, China, Japan, and Australia are shut down for a year, which appears to be a negative factor for tourism as well as the food and beverage industry.
Followed by Asia Pacific, North America is expected to hold the second-largest market share in the market. This is owing to the consumption of various regional cuisines in the region. The migrant population in the region leads to the consumption of its authentic food products, which led to the opening of various international food services in the region. The consumers in the U.S. have a liking for Japanese and Indian food. The retailers and restaurants draw the popularity of Japanese ingredients and foods such as matcha, sushi, and ramen. Japanese food products utilize various flavors such as umami. The usage of umami in Japanese cuisine lingers the taste of the whole food product. This positively helps in the growth of this market in North America.
However, a major drawback was caused due to the rapid prevalence of COVID-19 and the number of patients affected in the U.S. Large number of deaths were reported in the U.S. which has affected the economy of the country and propelled it to shut down for a couple of months. This will also have a negative impact on the market.
In Europe, Russia holds the largest market share owing to the presence of a large population base in the country. The U.K. holds the second-largest market share as the consumption of organic products are growing rapidly. One of the three products sold in the U.K. are claimed to be organic, and this supports the growth of natural food flavors in the country.
South America and the Middle East and Africa hold the least market share, whereas the growth rate of the Middle East & Africa remains to be the second largest. This is due to the growing popularity of Middle Eastern cuisines such as spreads and sauces. These cuisines are evolved from the Eastern Mediterranean flavors, thereby contributing to the growth of the market in the region.
Industry Focus in Development of Natural Food Flavors
The global food flavors market structure has the presence of various domiant players in the market. The industry has a majority of organized players. These manufacturers are focusing in the production of natural ingredients to bide with the trend. This way it helps provide transparency in the supply and the production of the products. It also helps in providing quality products to consumers. Givaudan SA, International Flavors and Fragrances, Koninklijke DSM NV, Symrise AG, Sensient Technologies Corp, and ADM are some of the prominent market players.
The natural food flavors segment has witnessed significant growth in the overall market globally. The growing world population is stepping towards an increased awareness for varied food flavorants and its benefits with high efficacy. This is anticipated to aid in expansion of the global market in the future years.
The report provides qualitative and quantitative insights into the market. It also offers a detailed analysis of its utility, applications, types of food flavors, market size and growth rate for all possible segments in the market.
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Along with this, the report provides an elaborative analysis of the market, future growth dynamics, and competitive landscape. Various key insights presented in the report include an overview of related markets, recent industry developments such as mergers & acquisitions, the regulatory scenario in critical countries, and key industry trends.
Value (USD Billion)
Fortune Business Insights says that the value of the market was USD 14.12 billion in 2019 and is projected to reach USD 19.28 billion by 2027.
Growing at a CAGR of 4.36%, the market will exhibit a steady growth in the forecast period (2019-2027).
The natural food flavor segment is expected to be the leading segment based on type in the global market during the forecast period.
Rising consumer awareness regarding clean-label ingredients and organic food products is a key factor driving the market.
Symrise AG, ADM, Givaudan SA, and Sensient Technologies are few key players.
Asia Pacific is expected to hold the highest market share in 2019.
Bakery application is expected to grow at a faster rate.
Increased consumption of processed food products and beverages is a major growth factor for the market.
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