R&D Investment and Innovation keeps the Fragrance Ingredients Moving

November 2022, Market Research Future has published a Report on the Global Fragrance Ingredients Market 

Fragrance Ingredients Market Highlights

Owing to never-ending quest of new fragrances, there has been growing demand of niche fragrances in the market. The power of social media influencers and celebrity endorsements primarily trigger the demand of perfumes and fragrance end-products. Gifting culture which includes buying for others offers opportunities for market growth of fragrance ingredients. Fragrance ingredients market is projected to reach USD 13.5 billion by 2032, growing at a CAGR of 3.10% from 2023 to 2032. 

With changing lifestyle and evolving consumer preferences, strong performance of the retail sector, trend of product traceability and concerns over product safety have significantly resulted in growing demand of fragrance ingredients. With strong economic growth, emergence of a large and prosperous middle class population, increasing consumers’ cautiousness to spend along with high rates of migration from rural to urban areas has led to the influx of international retailers to the developing regions. Rising urbanization coupled with cheap labor force, high ranking in ease of doing business index, government incentives & policy support and rising disposable income has attracted international retailers to enter and expand in Asia Pacific and Latin American region and gain strong foothold in the market. 

The trend of retail therapy including effortless, relaxing and ultimately enjoyable shopping is one of the major drivers boosting the sales of fragrance products. Most of the industrial players are entering in the supply-chain agreement with e-commerce players to boost their businesses as the e-commerce companies handle product sales through non-store channel and the industrial players choosing e-commerce channel of distribution save little cost on marketing. Investments by industrial players in strategic collaboration and strengthening the supply chain ensures a dependable stream of quality ingredients.

Also, growing health awareness among consumers, pursuit of healthy buying and growing consumer consciousness about the impact of using synthetic products on the human body and the environment resulting consumer inclination towards natural ingredients over synthetic ingredients and creating growth opportunity for natural fragrance ingredients. However, high cost of natural ingredients expensive R&D, and compliance with quality & regulatory standards are the major challenges faced by the market players.

Latest Industry Updates

January 2021, Givaudan acquired Activ International, a provider of natural and organic flavors, marine extracts, seafood and vegetable based culinary solutions. The move will strengthen its global capabilities in natural flavour solutions.

November 2021, IFF entered into an agreement to acquire Fragrance Resources, privately-held, family-owned fragrance company. Fragrance Resources has facilities in Germany, North America, France, and China. The move will strengthen IFF’s market share.

May 2022, Givaudan acquired Spicetec Flavors & Seasonings from ConAgra for USD 340 million in order to strengthen its capabilities in integrated savoury solutions.

April 2022, Symrise aims to open sales offices and application-specific laboratories in Iran which will strengthen the Company’s presence in the Middle East.

Global Fragrance Ingredients Market - Competitive Analysis

Fragrance ingredients industry is highly competitive and most of the companies operating in the market are focusing on expanding its operations across the geographies, augmenting its capabilities and investing in research and development to offer products with better functionality.  With strategic expansions, market players can focus on penetrating into the developing economies to expand their business portfolio. Consumers in developing countries are keen on exploring new product range offered to them and form a large consumer base. Establishing market in these emerging economies is profitable based on relatively low set-up costs, ease of doing business, and further lower variable cost to be incurred.

Industrial players are also involved in the acquisition of small players which will further support the company to expand and reach out to consumers across the regions, the end-user industries are inclined towards product promotions through social media, magazines and other mediums in order to reach out to customers. The promotional strategy aids in retaining the existing the customers and also to regenerate new customer base.

The key market players profiled in Global Fragrance Ingredients Market report include International Flavors and Fragrances (IFF), Givaudan SA, Firmenich, Takasago, Symrise , BASF SE, Frutarom Industries Ltd., Parfex, Vigon and Mane SA among many others.

Global Fragrance Ingredients Market – Segments

The global fragrance ingredients market has been divided into type, source, functional groups, application, and region.

On The Basis Of Type: Natural, and Synthetic

On The Basis Of Source: Flower, Fruits, Vegetables, Plant extracts, insects, minerals, & others

On The Basis Of Functional Groups: Alcohols & phenols, aldehydes, ketones, carboxylic acids, esters, & others

On The Basis Of Application: Fine Fragrances, Personal Care, and Household care products

On The Basis Of Region: North America, Europe, Asia Pacific and ROW.

Global Fragrance Ingredients Market - Regional Analysis

The global Fragrance Ingredients market is segmented into North America, Europe, APAC, and Rest of the World (RoW). Global Fragrance Ingredients market is highly dominated by Europe and it is estimated to retain its dominance throughout the forecast period. Asia Pacific region is projected to expand at a high pace as compared to the other regions and will register a healthy CAGR during the forecast period. Middle East region also finds lucrative opportunity in the Perfume & Fragrance market owing to the increasing overall growth of developing economies such as Bahrain, Kuwait, Qatar and others.