Flavoring Agents Market

Flavoring Agents Market Size, Growth, Forecast (2023-2028)

The Global Flavoring Agents Market size was worth US$ 15 billion in 2022, and it is anticipated to reach a valuation of US$ 21.1 billion, developing at an annual progression rate (CAGR) of 4.5% between 2023 and 2028.

Market Overview:

Flavoring agents are substances that are added to food to improve flavor and taste. The flavors fall into two broad categories, namely natural and artificial. The agent retains original fragrance of food for a long period of time during storage. Liquid and dry flavors are the most common form on the market. These agents are regulated by government agencies such as the FDA, the Codex Alimentarius Commission, and FSSAI to ensure safety for consumption and are classified as food additives. They are widely used not only for commercial production, but also for culinary purposes. Flavoring agents are classified into natural flavorings, identical natural flavoring substances, and artificial flavoring substances. Natural aromas are obtained through physical processes from vegetable and animal raw materials in a natural or processed form suitable for human consumption. Flavoring agents identical to natural ones are synthesized or chemically separated from aromatic raw materials identical to substances in natural products. Artificial flavoring is a chemical formula made by fractional distillation and other chemical processes to give it a natural-like flavor. The Flavoring agents are used in a variety of food and beverage industries, including beverage, dessert, bakery, confectionery and snack food.

Flavoring Agents Market Growth:

Factors such as increased demand for healthy, low-calorie foods, increasing popularity of flavored soft drinks, and consumer preference for natural products are supposed to drive the global flavoring agents market growth.

REPORT COVERAGE:

Drivers:

Changes in consumer lifestyles will accelerate the growth of the flavoring agents industry as processed foods and beverages become more popular in both developed and developing countries. Growing health awareness among consumers has led to increased use of flavors made from mixes of nuts, vegetables, seafood, wine, fruits, and spices. Additionally, strong orders from retailers and distributors to the supply chain and the high pace of globalization in developing countries have led to increased availability and demand for products. Spices are widely used and accepted around the world to enhance the taste and palatability of bland and tasteless foods. They are commonly used in beverages, processed foods, confectionery, bakery, and pharmaceutical formulations. The flavors are manufactured and used according to the five basic flavors: sweet, flavor, bitter, sour, salty and umami. Increased demand for new food additives, development of new products, increased demand for taste modification by consumers, development of food technology, investment in R&D, development of artificial aromas, improved flavor quality, technological innovation and advancement, change in existing products, upgrade of the new and unique taste, advanced sensory evaluation and taste testing, and the increased reliability of processed and ready-to-eat products are some other prominent drivers of the global flavoring agents market.

Additionally, consumer propensity for ready-to-eat products, natural foods, and prepared meals will increase the use of flavors in a variety of applications including beverage, bakery, dairy, ready-made meals, and confectionery. Extensive investment in R&D to produce better varieties of artificial and natural flavors has led manufacturers to adopt state-of-the-art technology to improve product suitability and stability. Strong prospects for these products in various baking applications are expected to increase segment share. Due to lifestyle changes and busy work schedules, the propensity for packaged and processed foods among consumers will support business growth. Increased awareness of natural ingredients in processed foods will further aid the growth of the global flavoring agents market during the forecast period. Additionally, the application of a variety of flavoring agents, such as dietary supplements, catering, processed foods and beverages, and nutraceuticals, is also driving the global flavoring agents market growth.

Restraints:

However, expensive raw materials, a ban on certain flavoring ingredients unfit for human consumption, knowledge of artificial flavors, the unpleasant aftertaste of certain flavors, traditional flavoring methods, allergic reactions, and increased competition hinder the flavoring agents market growth. Fluctuations in commodity prices can hamper market growth during the outlook period. The high costs associated with the production of flavorings related to raw materials and strict regulations for the labeling of clean products can slow the growth of the flavoring agents industry.

Flavoring Agents Market Segmentation Analysis:

By type, the Flavoring agent’s market is segmented into artificial and natural flavors. Artificial flavors accounted for more than 50% of the total industry share in 2020. This is because food manufacturers are in high demand for these products to enhance flavor and essence and to give the final product visual appeal that is lost while food is being processed. Key aspects, including ease of availability, low cost, and convenient manufacturing process compared to natural ingredients, will drive growth in the segment. Natural flavors are estimated to increase by more than 5% from 2022 - 2027. Increasing consumer awareness of the benefits of consuming natural ingredients will increase the market share of these products. Increased production of alcohol, juices, and carbonated beverages in a variety of flavors will provide a strong business outlook for industry expansion. The demand for natural flavors is also supposed to rise further as the number of cases of food poisoning associated with the consumption of artificial chemicals in food and beverages increases.

By application, the flavoring agents market is segmented into dairy, beverages, meat, bakery, etc. The beverage sector will dominate the global market due to its intensive use of flavors in hot beverages, alcoholic beverages, sports and nutritional drinks, juices and carbonated soft drinks. Increased consumption of ethnic beverages, along with changes in the lifestyle of the adult population in emerging countries, will further expand the market. Additionally, strong demand for processed organic beverages is foreseen to be a major growth engine for the industry. The dairy sector accounted for more than 12% of the total industry share in 2020. Growing consumer interest in probiotic beverages, combined with unexpected eating habits, will drive growth in the sector. Flavored dairy products have seen significant growth recently, fortified with essential nutrients like magnesium, calcium and potassium.

Impact of COVID-19 on the Flavoring Agents Market:

The coronavirus scenario affected sales and revenue in the Flavoring agents market due to disruptions that occurred in the global supply chain during the shutdown period due to export and import bans from regulatory agencies. The acquisition of commercial flavors has decreased due to transport restrictions and production difficulties. Initially, the production unit was closed due to a shutdown scenario and production was hampered by a lack of manpower. Distribution channels such as supermarkets and points of sale were closed to avoid a massive rebound, which resulted in a drop in sales, affecting revenues from the spice market.

Geographical Segmentation Analysis:

• North America - the United States and Canada
• Europe - United Kingdom, Spain, Germany, Italy, and France
• The Asia Pacific - India, Japan, China, Australia, Singapore, Malaysia, South Korea, New Zealand, and Southeast Asia
• Latin America  - Brazil, Argentina, Mexico, and Rest of LATAM
• The Middle East and Africa - Africa and Middle East (Saudi Arabia, UAE, Lebanon, Jordan, Cyprus)

Regional Analysis:

The Asia Pacific Flavoring agents market shows profitable growth opportunities during the forecast period due to the increasing popularity of processed foods and beverages, increased demand for premium products such as condiments and sauces, and increased consumer spending in healthy drinks. In addition, the combination of catering, hamburger and fast-food expansion patterns and the development of attractive food applications will augment the demand for products in the restaurant sector. Additionally, growing demand for organic products and clean product labels is likely to drive the Flavoring agents market growth. Europe accounted for more than 25% of the total market in 2020. The modernization and globalization of European countries has increased the need for flavor in the food processing industry. Increasing consumption of low-carbohydrate, low-fat, and low-salt foods is a key factor in stimulating the demand for and consumption of flavored foods. Because flavors vary by country and region, manufacturers have focused on formulating custom flavors to gain greater market share.

Key Players in the Market:

Major Key Players in the Global Flavoring Agents Market are

• International Flavors & Fragrances, Inc
• Givaudan
• Symrise AG
• Mane SA
• Keva Flavors Private Limited
• Takasago International Corporation
• Flavorcan International Inc
• Kerry Group
• Robertet SA
• Firmenich