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Global Food Flavor and Enhancer market- Growth, Trends, Forecast for the period (2017 - 2022)

Global Food Flavor and Enhancer market- Growth, Trends, Forecast for the period (2017 - 2022)

Market Insights

Food flavors and enhancers are the primary building blocks in the food and beverage industry. In this highly competitive market, the growth in innovative products can be attributed to the growth of food flavors and enhancers. The important trigger to these innovations is the region-wise and country-specific adoption of flavors & flavor enhancers by manufacturers. Final products of food and beverages segment constitute around 0.1 to 0.5% of the flavor enhancers. The major companies operating in the global food flavors and enhancers market are Givaudan, Firmenich, IFF, and Stymies Ag, holding about 55% share of the market.

The global market size in 2016 was estimated USD 9.2 billion and is estimated to increase at a compound annual growth rate (CAGR) of 3.5% and reach nearly USD 12 billion by 2022.

Sensient Flavors’ has launched a product line including seasonal combinations for spring, summer, autumn and winter. Fruit flavors are perceived by consumers as being healthier options than other flavors. Sensient’s product line allows manufacturers to reinvigorate their brands and includes concepts designed to appeal to adults as well as children.

Cargill’ has introduced erythritol as a flavor and it opened up new avenues for the ingredient which till now had been pigeonholed as a bulk sweetener.

Market Dynamics

Globalization and modernization are the primary factors that have increased the demand for flavors and enhancers. The changing lifestyle of people has also impacted their food habits. Earlier, natural herbs and spices were used in home cooking to get a tinge of flavor in the food, which eventually turned into an industrial need to cater to the big food processors. Owing to the increase in working women population there is a need in the market for processed foods, impelling food manufacturers to cater to the growing population resulting in the use of several flavors and enhancers. Also, the consumer’s preference for a low-salt, low-fat and low-carbohydrate diet is a key driver in the increase of consumption of flavors and enhancers. Since the flavors are region and country-specific, the manufacturers are constantly trying to hold a larger share of the pie, through rigorous R&D and innovations in the market.

The increase in health awareness among consumers is proving to be a major restraint in the artificial flavors market, flavors like monosodium glutamate (MSG). Consumers are now aware of the deteriorating health effects of MSG. For instance, when Maggi noodles were reported to be containing more than the required amount of MSG, it had to go through 8 lab tests to finally gain its place in the market. Hence consumer awareness is directly proportional to the market, wherein, when consumers realize the negative effects of artificial flavors, it subsequently results in a decrease in their demand, thus ticking the demand for natural flavors. Many new entrants face a challenge in the flavor and enhancer industry, as massive natural resources are needed to extract flavors. Also, the change in preferences and tastes of the consumers are constant constraints for the manufactures. Moreover, there are many regulatory bodies that have banned the use of artificial food flavors and enhancers, especially in Europe.

Market Segmentation

Regarding product type, the food flavor and enhancer market is segmented into food flavor and food enhancers. The food flavors segment is bifurcated into natural flavors and synthetic flavors. Natural flavors are sub-segmented into essential oils, aroma, natural extracts, and others; while synthetic flavors are sub-segmented into fruit flavors, citrus flavors, savory flavors, identical nature flavorings, and other synthetic flavors. The food flavors are further segmented by application into dairy, bakery & confectionery, meat & fish products, snacks & savories, beverages, and others.

Flavor enhancers are segmented by type into – glutamates, which is subdivided into MSG and others like DSG, MPG, etc.; and nucleotides, which is subdivided as disodium guanylate, disodium inosinate, ribonucleotides, etc. These food enhancers are further segmented by application into noodles, soups, seasonings & spices, meat products, and others.

Both, food flavors and enhancers, have their major applications in the beverage industry, occupying most of the share in flavor and enhancers market, followed by confectionery, soup, and bakery products. By type, the artificial flavors are expected to witness a fall in the market due to consumer preference for natural flavors. However, monosodium glutamate holds the major share, more than the natural flavors. The major constraint in the natural flavors industry is the need for large amounts of natural resources to extract flavors and enhancers according to consumer preference.

Regional Segmentation

The major global manufacturing hubs are North America and Europe, which hold a large share in the food flavor and enhancer market. These regions are followed by Asia-Pacific, South America, and Africa. Snack and confectionary is leading the market in consumption in Europe, since a few years, followed by bakery items and meat. The European market is a mature market and has several bodies that stringently regulate the use of food flavors and enhancers, keeping the consumers’ health in mind. Germany constitutes the major share having XX%, followed by the UK, Spain, The Netherlands, and Italy. The market value of synthetic flavors was about USD 912 million and that of natural flavors about USD 755.65 million, in the year 2014.

The strong growth in low-fat and low-carbohydrate food and beverages is expected to increase the demand in the North American flavor and fragrance market. However, Asia is projected to gradually overtake the North American market, due to an increase in growth estimated for this region. On the other hand, growth of the European market would continue to be moderate, due to market maturity, as well as, consolidation in the industries that use food flavors and enhancers.

Competitive Landscape

The major companies operating in the global food flavors and enhancers market are Givaudan, Firmenich, IFF, and Stymies Ag, holding about 55% share of the market. Other key players in the industry are Takasago, Mane SA, Frutarom, Sensient flavors, Robertet SA.

Capital Activities

ConAgra Foods struck a $340m deal to sell its Spicetec flavors and seasonings business to Givaudan.

Ajinomoto has started the third stage of its $2bn global acquisition campaign at Europe. The company aims for takeover deals, with specific attention over UK, Germany and France.

Future Spotlight

The flavors segment forms the largest component of the overall food ingredients market, and the segment can be featured as specialized, highly technical, and innovative in nature. A good example of the approach in action can be found in the Philippines and Indonesia, where Givaudan has applied consumer understanding techniques to develop flavors for powder juice drinks, which are very popular in these parts of Asia-Pacific. When compared to other categories, within the food and beverage market, this industry is highly competitive and concentrated. The companies that operate in the flavor and flavor enhancers industry not only develop and supply a variety of flavor and flavor enhancing ingredients and components to food and beverages, but also to pharmaceuticals, food industries, and to the suppliers of household products. Also, this industry is bound to region-wise customization, which is highly complex in nature, with great variance in product formulations, from country to country, and within the countries.

The flavors and textures of processed foods are customized by the local preference. Traditional or local foods have unique flavors, which evolve from the indigenous climate and land.
In recent years, the global flavor and flavor enhancers market has reached a threshold of enormous growth. The growth of the segment can be partially attributed to the expansion of global beverage industry, and increasing demand for convenience food, change in consumer lifestyle, and a rising number of sensory-oriented consumers around the world. On the other hand, factors like mounting raw material prices, high entry barriers, regulatory limitations, and price pressure on manufacturers owing to the consolidations, are influencing the industry’s growth. Major trends that prevail in the market are consolidations in the industry; ‘No artificial flavors or colors,’ is in trend with the emergence of biotech flavors and sensory trend.

Key Players

Givaudan S.A
Firmenich Industries Ltd,
International Flavors & Fragrances Inc.
Stymies Ag.
Quest Inc.
Takasago International Corporation
Sensient Technologies Corporation
V. Mane Fils SA
Key Deliverables in the Study:

A five-year forecast of the global food flavor and enhancer market and noted trends.
Value and growth analysis for global food flavor and enhancer market with inputs on individual segment share within each category and the change in their market share forecast for 2017-2022.
Detailed research and segmentation of the main flavor and enhancer like natural, synthetic and nature identical food flavor and the important segments of food in which it is used the most.
An assessment of the competitive landscape and market shares for major flavor and enhancer companies
Insights on the major countries/regions where the food flavor and enhancer market is developing and to also identify the regions that are still untapped.
Market share of brands and private labels and private label growth analysis during 2017-2022

1. Introduction
1.1 Research methodology
1.2 Market Definition
1.3 Report Description
2. Key Findings
3. Market Overview & Dynamics
3.1 Introduction
3.2 Drivers
3.2.1 Globalisation and modernization in the food habits
3.2.2 Expanding beverage industry
3.2.3 Increasing sensory oriented consumers
3.2.4 Growth in emerging economies
3.3 Restraints
3.3.1 Consumers demand for natural Additives
3.3.2 Region specific customization
3.3.3 Mounting raw material prices
3.3.4 Regulatory requirements
3.4 Opportunities
3.4.1 Innovations in natural flavors segment
3.4.2 Innovations to meet the wellness demand
3.4.3 Wider Acceptance of GSFA for improved International Trade
3.4.4 Increasing demand of the ready to eat,ready to drink and processed food
3.5 Porter’s Five Forces Analysis
3.5.1 Bargaining power of Suppliers
3.5.2 Bargaining power of Buyers
3.5.3 Degree of Competition
3.5.4 Threat of Substitution
3.5.5 Threat of new entrants
4. Market Segmentation
4.1 Food Flavors Segmentation
4.1.1 Flavours by Type Natural Flavour Essential oils Aroma Natural Extracts Others Synthetic Flavour Fruit flavours Citrus flavours Savoury flavours Other synthetic flavours Nature Identical flavourings
4.1.2 Flavours by application Dairy Bakery Confectionery Meat & fish products Snacks & savouries Beverages Others
4.2 Flavor Enhancers Segmentation
4.2.1 Flavour enhancer by type Glutamates MSG Others (DSG, MPG) Nucleotides Disodium guanylate Disodium Inosinate Ribonucleotides Others
4.2.2 Flavour Enhancer by Application Noodles Soups Seasonings & spices Meat products Others
4.3 By Geography
4.3.1 North America US Mexico Canada Others
4.3.2 Europe Spain UK Germany France Russia Italy Others
4.3.3 Asia Pacific China India Japan Australia Others
4.3.4 South America Brazil Argentina Others
4.3.5 Africa South Africa Egypt Others
5. Competitive Landscape Overview
5.1 Market Share Analysis
5.2 Strategies by leading players
5.3 New Product Developments &Other Innovations
6. Company Profiles
6.1 Givaudan
6.2 Firmenich
6.3 Ariake U.S.A.,INC.
6.4 Cargill Inc
6.5 Kerry Group
6.6 Corbion Purac
6.7 Archer Daniels Midland(ADM)
6.8 FMC Corporation
6.9 Symrise AG
6.10 BASF
6.11 International Fragrance and Flavours, Inc.(IFF)
6.12 Sensient
6.13 Dupont- Danisco
6.14 D.D. Williamson & Co Inc.
7. Appendix

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