The growth of the global flavours and fragrances market is braced by the changing trends in a number of emerging markets like packaged food, cosmetics and beverages. Economic factors like increased spending capacity of consumers, emerging middle class population and an overall financial development augment these markets. This in turn aids the incessant growth of the F&F market at a global level.
Factors influencing the flavours and fragrances market
With an expected CAGR of 4.3 per cent between 2014 and 2019, the world demand for flavours and fragrances is undoubtedly on a growing spree. While factors like changing consumer food habits, corporate mergers and the need to be a competitive forerunner through product differentiation have a positive influence on the industry there is also another flip side to this market. The high costs involved in the research and development of newer products, fluctuation in regulatory issues and price of constituent products hamper the growth of the industry.
Changes expected to affect the industry in the next five years
In the upcoming years there seems to be an overall betterment in terms of the growth opportunities for the market through elimination of negative parameters and the emergence of newer geographical markets.
Newer products and better packaging
The industry players in the F&F industry will shift focus towards developing newer products in order to satiate the changing demands of the consumers. Revamped marketing strategies and a strategic analysis of the existing product line are needed to stay above the competition.
Latin America to become the largest patron of the fragrance industry
The fragrance ingredients industry is expected to grow by 5.6% by 2019. Europe dominated the market up until 2013, after which there has been gradual shift towards the west. The increasing spending patterns and the increasing income levels are expected to push Latin America up the ladder in the consumption of fragrances.
Application based growth in the fragrance market
The global fragrance market can be segmented into five categories such as fine fragrance, cosmetics and toiletries, soaps and detergents, household products and others. The cosmetics and toiletries segment of this industry is expected to showcase the maximum growth. This sector of the industry is projected to grow at a CAGR of 6 per cent in the upcoming five years.
Application based growth in the flavours market
The global flavours market can be segmented into five categories such as dairy, beverage, savoury, confectionary and others. The savoury and the confectionary segments of this industry will be undergoing maximised growth trends in the next five years.
Products with lower health risks will always stay in trend
The increasing health hazards and the higher awareness levels among consumers has been a major impairment for the F&F industry. With the introduction of regulations like REACH in the Europe, fragrances and flavours derived from natural ingredients will be a good niche to target.
With these impending changes in the forthcoming years, the F&F industry is expected to witness remarkable growth through intense competition, corporate expansions and new product development.