Global Aroma Chemicals Market - Insights
Aroma chemicals are a mixture of synthetic or natural ingredients that are added to various substances to obtain the desired fragrance. These chemical compounds help substantially in manufacture of flavorants used in the preparation of food for the enhancement of flavor. Aroma chemicals have wide range of application and are mostly found in food, spices, wine, perfumes, detergents, soaps, and fragrance oils. These chemicals are also added to odorless gases to incorporate distinct smell.
The growing demand for cosmetics, healthcare products, food, personal care, and household products throughout the globe is a major factor driving the growth of aroma chemicals market. The growing consumer preferences coupled with growth in the retail sector in emerging economies has augmented the cosmetics and healthcare products, which in turn is driving growth of aroma chemicals market globally. The increasing demand for processed food globally is also adding to the market growth.
On the basis of region, the global aroma chemicals market is segmented into North America, Latin America, Europe, Asia Pacific, Middle East, and Africa. In 2016, Europe was the leading region, followed by North America and Asia Pacific in the global aroma chemicals market in terms of revenue, and is expected to remain dominant over the forecast period. However, North America held the largest share in the market with a CAGR of 24%, followed by Asia Pacific (18.40 %) in 2016. The major factors such as increasing disposable income has generated demand for cosmetic and healthcare products, which in turn fuels the growth of aroma chemicals market. Widespread awareness of consumers along with developing retail sector especially in India and China has boosted the demand for homecare and fragrance products in Asia Pacific, which increases the market demand.
For instance, according to Indian Brand Equity Foundation (IBEF),a trust established by the Department of Commerce, Ministry of Commerce and Industry, Government of India, the retail market in India generated a revenue of US$ 600 billion in 2015 and is expected to nearly double to US$ 1 trillion by 2020, owing to income growth, urbanization, and attitudinal shifts. Asia Pacific is expected to exhibit a CAGR of 7.15% over the forecast period and is expected to reach US$ 1.40 billion by 2025.
Europe is the largest region in terms of value and was valued at US$ 1.41 billion in 2016. The growing demand for personal care and cosmetics in the region is the major factor triggering the demand for aroma chemicals. According to the European Trade Association, the cosmetic and personal care was valued at US$ 90.4 billion at retail sale price in 2016. Moreover, the increased use of aroma chemicals in wine has furthermore augmented the market. According to the EU, Europe produced 165600 hectoliters of wine between 2016 and 2017. The European economies of Germany, UK, France, and Italy are highly lucrative markets for aroma chemicals.
Figure 1. Global Aroma Chemicals Market Share Application 2016.
Source: Coherent Market Insights 2017
Based on the application, cosmetics and toiletries are the largest segment in 2016 and is expected to show the same trend during the forecast years. Cosmetics and toiletries hold a revenue of US$ 1.35 billion and are expected to grow at a CAGR of 5.80% from 2017 - 2025. The increasing awareness about health and wellness coupled with the rise in the personal disposable income is the major factor driving the growth of cosmetics and toiletries segment.
Major Players in the Global Aroma Chemicals Market
Major players operating in the global aroma chemicals market include Agilex flavors and fragrances INC, BASF, Aromatech flavorings INC, Bell Flavors & Fragrances Company, Flavorchem Corporation, and Vigon International INC.