This study analyzes the US flavor and fragrance industry. It presents historical demand data for 2002, 2007 and 2012, and forecasts for 2017 and 2022 by market (e.g., food, cosmetics and toiletries, cleaning products, environmental fragrance goods, beverages) and product (e.g., flavor blends, fragrance blends, essential oils and natural extracts, aroma chemicals). The study also considers market environment factors, details industry structure, evaluates company market share, and profiles industry players.
US demand to approach $7 billion in 2017
Demand for flavors and fragrances in the US is forecast to approach $7 billion in 2017 as the result of favorable wellness, demographic, and macroeconomic trends. Consumer demand for more flavorful foods, as well as unique high-value flavors, will fortify strong growth in flavor blends, the largest product type. Demand for fragrance blends will rise at a more modest pace, impacted by slower growth in cosmetic and toiletry shipments and weakness in environmental fragrance goods. Essential oils will rise at an above average pace, reflecting greater consumer preference for natural goods. The same trend will also benefit natural aroma chemicals, though aroma chemicals overall will continue to post only modest
Cleaning ‘experience’ to promote fragrance gains
The cosmetics and toiletries market suffered from slow growth during the recession impacted 2007-2012 period, during which consumers were less likely to purchase discretionary items such as perfumes and colognes, skin care products, and cosmetics. As growth in this large market accelerates somewhat, fragrance blend demand will post respectable gains -- though still below average -- during the forecast period. Fragrance blend demand in cleaning products will grow the fastest through 2017, driven by innovation. Producers are continuing to promote the notion of a cleaning “experience” -- feeling relaxed, invigorated, or transported -- through fragrance in dishwashing detergents and general purpose cleaners. Similar efforts to promote fragrance based experiences will also support above-average growth in body washes.
Essential oils, natural extracts to benefit from focus on wellness
From 2002 to 2012, consumer interest in natural items -- including beverages, food, cosmetics and toiletries, and even cleaning products -- rose relatively quickly, as rising attention to wellness encouraged some to avoid end products containing artificial flavors or fragrances. This trend is expected to continue, benefitting demand for essential oils and natural extracts as more manufacturers present naturally flavored or scented versions of their retail items. Going forward, demand growth in essential oils and natural extracts for flavor and fragrance applications will be nearly as fast as growth in flavor blends, though from a smaller base. The pace of growth will moderate slightly as price increases slow to a more sustainable pace following recent rapid gains.
Natural, synthetic aromas to register stronger growth
While increases in aroma chemical demand will trail other product types, natural aroma chemical sales will accelerate through 2017 to a near average pace due to their ability to afford a “clean” label in food, beverage, and some cosmetic and toiletry applications. Increases in synthetic aroma chemical demand will also improve, though the pace will remain below average. Synthetic aromas will continue to be the preferred solution in soaps and body washes as well as laundry detergents due to the high volume nature of these markets and the need for low material cost and product consistency.
Profiles for US industry players including Firmenich, Givaudan, International Flavors & Fragrances, Sensient Technologies, and Symrise
This study analyzes the US market for flavors and fragrances, including flavor blends, fragrance blends, essential oils and natural extracts, and synthetic and natural aroma chemicals. To avoid double counting, the value of essential oils and aroma chemicals used in the production of finished flavor and fragrance blends is included in the latter categories. The outlook for major markets is also discussed, with a focus on food, cosmetics and toiletries, cleaning products, beverages, and environmental fragrance goods, among others. Flavor enhancers, artificial and natural sweeteners, and spices, although they are important flavoring agents, are not included in the scope of this study. However, in some instances this report includes mixtures of flavor chemicals that contain the aforementioned items.
The study places the flavor and fragrance market in context through an in-depth overview of market environment conditions. In addition to providing economic background, the Market Environment section examines historical market trends, pricing patterns, and environmental and regulatory issues, and discusses international activity and foreign trade. Finally, the study is concluded with an analysis of the industry structure, market share, and the key industry competitive variables, as well as profiles of representative companies in the industry.
Historical data (2002, 2007, and 2012) and forecasts for the years 2017 and 2022 are provided in current dollars unless otherwise noted. As used in this study, the term “shipment” includes all production from US manufacturing sites that is then shipped to both US and foreign markets. The term “demand” -- used interchangeably with “market,” “sales,” and “consumption” (including both merchant and captive consumption) -- is defined as all shipments from US plants, plus imports, minus exports. Demand is presented at the manufacturers’ level. Tabular details may not add to totals due to independent rounding, and some ratios are based on unrounded numbers. In addition, ratios may be rounded for the sake of clarity.
Throughout this study, demand for flavors and fragrances is related to various indicators for comparative purposes and to facilitate further analysis. Macroeconomic and demographic indicators used in this study were obtained from The Freedonia Group Consensus Forecasts dated April 2013. Because of the Bureau of Economic Analysis’ use of chain weighted price indices, inflation-adjusted Gross Domestic Product components (2005 dollars) do not necessarily add to the total.