CITRAL MARKET ANALYSIS

The Citral Market size is valued at US$ 3.19 Bn in 2024 and is expected to reach US$ 5.11 Bn by 2031, growing at a compound annual growth rate (CAGR) of 7% from 2024 to 2031.

Citral Market Regional Insights:

• Europe: With a majority of the global market share of 30%, the Europe area consumes the most citral in the globe. The food and beverage sector, which is rapidly increasing in developing nation, is the main driver of the region’s citral market growth. The regional citral market is expanding as a result of rising consumer demand for natural Fflavors and perfumes in food and beverage goods. The demand for goods containing citral is in addition, expected to increase as a result of the region’s customers’ changing lifestyles and rising disposable incomes.
• North America: The Citral Market of North America is expected to grow significantly during the forecast period. The region’s citral market is primarily driven by the rising demand for natural and organic products in the food and beverage, cosmetics, and personal care sectors. Moreover, the citral market is expanding as a result of rising consumer awareness of the advantages of using natural ingredients in products. Citral consumption is expected to increase in the region as a result of a growth in the demand for essential oils with citrus bases.
• Asia Pacific: The Asia Pacific citral market is expected to expand moderately during the forecast period. The food and beverage sector, which consumes the most citral in the area, is the main driver of the market. The region’s citral market is expanding due to the rising demand for natural and organic flavors and fragrances in food goods. Citral consumption in the area is also expected to increase as consumer desire for natural and organic personal care and cosmetics goods rises.

Figure 1. Citral Market Share (%), By Region, 2024

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Citral Market - Analyst’s Views:

The citral market is expected to grow steadily driven by increased demand from flavor and fragrance segment. Citral finds major application in producing flavors for foods and beverages. Europe  dominates global citral production due to availability of key raw materials in the region. However, volatility in raw material prices remains a concern impacting stable supply of citral. Opportunities lie in development of alternative production methods that reduce dependence on natural raw materials.

Rise in health awareness is prompting manufacturers to reduce chemical-based flavors in favor of natural ingredients like citral. Expanding food processing industry in Asia Pacific and Latin America will augment citral consumption in the near future. Nevertheless, high competitiveness in the flavor and fragrance market poses challenge for vendors. Customer preference for newer and unique flavors/fragrances also compels companies to continually invest in research and development (R&D).

Stringent regulations regarding use of synthetic ingredients in food products present another constraint. Producers face difficulties that are associated with storage and transportation of citral due to its volatile nature. Adoption of citral for non-food applications is expected to provide new avenues for growth in pharmaceutical and household product segments. While Indonesia and China have clear competitive advantage in citral supply currently, India could emerge as a fast-growing regional market.

Citral Market Drivers:

Wide range of applications in perfumes, soaps, detergents and other products: Citral, which is a mixture of two isomers geranial and neral, has a wide range of applications across industries such as perfumes, soaps, detergents, food and beverages. It is these versatile applications that are primarily driving the continued growth of the citral market. Citral is extensively used to impart lemony and floral notes in perfumes, deodorants, body washes and other personal care products. Its fresh and clean scent makes it a popular ingredient amongst personal care brands.

Citral is also widely utilized as a cleaning agent in various types of soaps, detergents, and household cleaners due to its degreasing and antimicrobial properties. The COVID-19 pandemic has led to heightened focus on hygiene and cleanliness over the past 2 years. For instance, according to the data provided by the UNICEF in 2021, the global personal care industry has grown at over 5% annually in the last 5 years, a trend expected to continue in the  near future as well. This increasing demand from the personal care sector has a direct positive impact on citral consumption.

Increasing use in the food and beverage industry for flavoring agent: The food and beverage industry is increasingly adopting citral for flavoring purposes due to its pleasant aroma and taste. Citral, which is primarily extracted from lemongrass, litsea cubeba, and other plants, is being widely used for imparting lemon, lime, and floral notes in food products, beverages, and confectioneries.

Citral provides that refreshing citrus flavor profile that consumers find very appealing. Beverage manufacturers are actively experimenting with different ratios of citral to develop innovative citrus flavors in beverages like sodas, juices and flavored waters. For example, many popular lemon-flavored fizzy drinks derive their unique zesty flavor from citral. Similarly, in confectioneries like candies, chewing gums, and baked goods, citral is utilized to provide a sweet citrus undertone that consumers enjoy. Citral is also being used in savory applications like marinades, salad dressings, and dips for providing that tangy citrus dimension to the taste.

According to the data provided by the Government, the UN Food and Agriculture Organization (FAO) suggests that global demand for processed and ready-to-eat food products is steadily rising. Furthermore, changing consumer preferences towards more flavorsome options and functional beverages have prompted food and beverage companies to explore natural extracts like citral that provide both flavor and antioxidants.  For instance, according to the data published by the International Trade Centre (ITC), the worldwide exports of essential oils including citral grew by over 12% between 2020-21 as compared to the 2019-2020 period. This rapid increase in trade indicates that more food and beverage manufacturers are recognizing citral's versatile usage in their product development efforts to meet consumer demand for flavorful yet natural foods.

Citral Market Opportunities:

 Development of new application areas: The citral market has traditionally been focused on flavor and fragrance applications for foods, beverages, and personal care products. However, with advancements in material science and bioengineering, entirely new applications are emerging that could drive significant future growth. One area primed for expansion is citral-based bioplastics. Citral is a natural terpene compound that can be used as a bio-based building block for creating various types of biodegradable plastics. As concerns grow over fossil fuel-derived plastic waste, bioplastics that are made from renewable ingredients like citral offer an environmentally-friendly alternative. For instance, according to data provided by the European Bioplastics Association, global bioplastic production capacity has increased nearly 50% from 2018 to 2021. As production continues rising to meet the demands of sustainability-focused consumers and regulations against single-use plastics, citral is well-positioned to play a larger role.

Another budding application field is green chemistries by utilizing citral's antibacterial and antiviral properties. Research performed by virologists at Hong Kong University found citral to be highly effective at inactivating SARS-CoV-2 virus particles in the air and on surfaces. This research indicates citral's potential for development into disinfecting sprays, surface coatings for public areas, and personal protective items like masks. The ongoing COVID-19 pandemic has revealed vulnerabilities in public health that have accelerated investment into safe and natural solutions. The global market for disinfection products has grown substantially during the pandemic according to UN Comtrade data. If citral-based chemistries can deliver on this promise, the citral market stands to considerably expand with rising demand for infection control. Entering into these nascent yet rapidly growing application fields, tremendous opportunities could open up for citral's use over the long term.

Growth of end-use industries in emerging economies:  The growth of end use industries in emerging economies presents a major opportunity for the citral market. Countries like India, China, Brazil, Indonesia, and others are experiencing rapid industrialization and economic development. As discretionary incomes rise in these nations, demand for consumer products incorporating citral is surging.

Citral provides lemon and lime fragrance and is widely used in products like soaps, detergents, perfumes, air fresheners, candles and more. As more consumers enter the middle class in emerging markets, consumption of these household and personal care items is increasing substantially. For example, soap production in India grew by over 8% yearly between 2015-2020 according to the Ministry of Statistics and Program Implementation, India. Rising hygiene awareness after COVID-19 has further accelerated the sales of soaps and sanitizers.

Developing nations are also investing heavily in their manufacturing capabilities. Special Economic Zones (SEZs) are coming up across regions like Southeast Asia to attract foreign direct investment into industries like automotive, electronics, pharmaceuticals, and others. All of these end use sectors employ citral for applications such as aroma chemical formulations, deodorization, and others. The growing industrial landscape in emerging economies thus presents a constant rise in demand for citral.  For instance, according to United Nations Industrial Development Organization (UNIDO), the share of global manufacturing from developing countries increased from 25% in 2000 to 37% in 2018.

This development of end use sectors in emerging nations will ensure stable and long-term growth opportunities for citral producers and exporters. By tapping into these fast-growing consumer and industrial markets, companies can mitigate risks from economic slowdowns in mature regions and capitalize on the next phase of global economic transformation.

Citral Market Trends:

Rising popularity of organic and herbal cosmetic products: The rising popularity of organic and herbal cosmetic products is influencing the citral market significantly. With increasing health and environment consciousness among consumers, the demand for natural and plant-based ingredients in cosmetic products is growing steadily. Citral, which is a natural compound extracted from lemongrass, litsea cubeba, and other plants, is being widely used as a key ingredient in various organic cosmetic products like soaps, creams, lotions, and others due to its antibacterial and anti-inflammatory properties.

Many cosmetic brands are  emphasizing the use of citral and other natural compounds in their products to cater to consumer demand. For example, a prominent U.S based cosmetic company announced. in 2021, that it has removed all toxic chemicals from its skincare range and is only using natural terpene compounds including citral sourced from sustainable vendors in Asia pacific and Latin America. As organic cosmetic products become increasingly popular, the demand for citral as a natural preservative and fragrance ingredient is growing significantly.

Focus on production of value-added citral derivatives: Focusing on the production of value-added citral derivatives presents a major opportunity in the citral market. While citral itself has applications as a fragrance and flavor compound, deriving specialized derivatives from it allows access to a wider range of end use applications and consumer markets. Citral derivatives have emerged as important raw materials for industries such as cosmetics, perfumes, household products, food and beverages.

Producing citral derivatives allows customizing end products for specific needs. For example, geranial and neral (the two isomers of citral) can be used to derive forms that are suited for different fragrance notes, geranial adds citrus tones while neral provides floral nuances. Similarly, citral diethyl acetal is valued for its orange-citrus scent. This level of customization and specialization addresses the evolving requirements of international brands and domestic firms. It also opens up avenues for developing novel ingredients, catering to new product trends.

Focusing on derivatives also improves margins and creates a differentiator.  For instance, according to the data provided by the UN Comtrade, while India's citral exports have grown steadily  between 2020-2022, much of this has been in the form of the basic chemical. Venturing into specialized derivatives allows capturing more economic value in the global supply chain. It helps to establish the region as a reliable supplier of high-value ingredients.

Citral Market Restraints:

Stringent regulations regarding usage of citral: Stringent regulations regarding the usage of citral are placing significant restraints on the expansion of the citral market. Citral, which is a natural compound found in several plants, is widely used in the fragrance and flavor industries. However, various health and environmental organizations have flagged concerns in recent years about potential risks from prolonged or excessive exposure to citral. In response, regulators across major economies have introduced new guidelines by curbing the application of citral in certain products.

For example, the European Union's (EU) registration, evaluation, authorization, and restriction of chemicals (REACH) regulations mandate lower permissible exposure limits and tighter control over citral content in leave-on cosmetic formulations like perfumes as well as cleaners due to potential skin irritation issues. Similarly, the Food and Drug Administration (FDA) in the U.S., has laid out stricter Good Manufacturing Practices for citral usage in food items to prevent unintended over-consumption. These revisions are aimed at minimizing health risks but have led to formulation changes and disruptions for several end-use industries dependent on citral.

Counter balance: Ensure that products meet all regulatory requirements. Obtaining certifications from recognized bodies can help to demonstrate compliance and build trust with customers.

Presence of substitutes: The citral market is facing considerable restraint due to the presence of effective substitutes. Citral is primarily used in fragrance applications to impart lemony and floral notes. However, there are several synthetic compounds that can replicate the aroma and scent of citral at a lower cost. Prominent synthetic substitutes include citronellal, geraniol, and methyl ionone. These substitutes are primarily produced through chemical processes rather than extraction and offer fragrance formulators more stability and consistency in end products. The popularity of synthetic substitutes is restricting natural citral producers from significantly growing their market share. Most substitute compounds are sourced from abundant petrochemical feedstocks rather than renewable botanical sources like lemon grass oil that supplies over 90% of global citral. The reliable supply and cheaper manufacturing costs of alternatives like citronellal have made them the obvious choice for cost-conscious consumers, especially in industrial and institutional segments.

The presence of effective synthetic drops is also preventing citral producers from substantial price rises needed to boost profit margins. Substitutes restrain citral prices from increasing enough to cover rising production costs that are associated with variables like labor, energy, and lemon grass crop yields. This leaves citral suppliers with limited options to organically increase earnings potential and incentivize further capacity expansions. Unless citral finds valuable differentiating applications, its market looks are set to steadily lose share to cheaper synthetic replacements.

Counter balance: Expand the product portfolio to include specialized blends or formulations that combine citral with other ingredients to provide a unique value proposition that substitutes may not offer.

Recent Developments:

• In June 2022, Givaudan and Manus Bio worked together to create BioNootkatone, a clean-label, natural, and sustainable citrus flavoring component. Several different dishes and beverages can be made with BioNootkatone. BioNootkatone from Givaudan smells citrusy and woodsy. For BioNootkatone, Manus Bio owns complete production rights, while Givaudan has exclusive global commercialization rights.
• Givaudan is a global leader in fragrance, beauty, taste, and wellbeing. The company is known for creating innovative scents and tastes with a commitment to purpose-led growth. Givaudan celebrates the beauty of human experience by developing a wide range of products, including fragrances, flavors, and beauty and wellbeing solutions.
• In April 2021, the largest privately held fragrance and taste company in the world, Firmenich, unveiled FreshSlice, a special assortment of citrus oils that is made entirely from natural ingredients for future flavors. Unmatched freshness, juiciness, and fruit-like flavor are all provided by FreshSlice at a reasonable price.
• Firmenich is a Swiss company that specializes in the fragrance and flavor business. The company has been creating perfumes for over 125 years and has produced a number of well-known fragrances. Firmenich is also a leading supplier of high-quality, renewable ingredients and has a strong focus on sustainability.
• In 2020, Zhejiang NHU Co., Ltd. announced the launch of its new citral plant in Zhejiang, China. The new plant is expected to enhance the company’s production capacity of citral and cater to the increasing demand for natural and organic ingredients in various industries.
• Zhejiang NHU Co., Ltd is a Chinese company that engages in the manufacture and sale of nutrition, flavoring, fragrance products, pharmaceutical intermediates, chemicals, and organic chemical products. It is a national high-tech enterprise with a focus on research and production of nutrition, pharmaceutical raw materials, flavors, fragrances, and new organic chemical products.
• In 2020, Kalpsutra Chemicals Pvt. Ltd. announced the expansion of its citral production capacity in India. The expansion is aimed at meeting the growing demand for citral in the food and beverage industry and strengthening the company’s market position.
• Kalpsutra Chemicals Pvt. Ltd. is an Indian company that has established itself as a leading manufacturer, exporter, and supplier of aromatic chemicals, flavor ingredients, and industrial inorganic chemicals. The company has a strong presence in the domestic and international markets, emphasizing quality and timely delivery of its products.

Acquisation & Partnership

• In 2021, BASF SE announced the acquisition of Isobionics, a Dutch biotech company that specializes in the production of Natural Flavors and fragrances. The acquisition is aimed at expanding BASF’s portfolio of natural ingredients and meeting the growing demand for natural and sustainable products.
• BASF SE, whose acronym stands for Badische Anilin- und Sodafabrik, is a German multinational chemical company. It operates in various segments, including chemicals, plastics, performance products, functional solutions, agricultural solutions, and oil and gas. The company is listed on the Frankfurt Stock Exchange, London Stock Exchange, and Zurich Stock Exchange. BASF is known for its commitment to sustainability and innovation, aiming to create chemistry for a sustainable future.
• Isobionics is a Dutch biotech-based aroma ingredients company located in Geleen, the Netherlands. The company develops and produces a wide range of natural ingredients for the flavor and fragrance market, with a focus on citrus oil components. Isobionics has been recognized as an innovation leader in biotechnology, serving the global market for natural flavors and fragrances.
• In 2020, Jiangxi Global Natural Spice Co. Ltd. announced the acquisition of Huade County Running Natural Fragrance Co. Ltd. a Chinese company that specializes in the production of natural fragrance ingredients. The acquisition is aimed at expanding Jiangxi Global Natural Spice’s product portfolio and strengthening its market presence.
• Jiangxi Global Natural Spice Co., Ltd. is a well-established company with over 10 years of experience in the production, development, and deep processing of natural spice oils and essential oils. The company is known for providing high-quality and cost-effective products, offering competitive prices, and excellent services. They specialize in essential oils and plant oils, and their commitment to quality and customer satisfaction is evident in their welcoming approach to both new and existing customers. The company's focus on natural spice and essential oils underscores its dedication to providing natural and aromatic solutions to its customers.

Figure 2. Citral Market Share (%), By Type, 2024

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Top Companies in the Citral Market:

• BASF SE
• Beijing Lys Chemicals Co. Ltd.
• Indukern SA
• Industrial and Fine Chemicals
• Kuraray Co. Ltd.
• Privi Specialty Chemicals Limited
• Rajkeerth Aromatics and Biotech Pvt. Ltd.
• Symrise AG
• Takasago International Corporation
• Vee Kay International
• Zhejiang Xinchecheng Co. Ltd.

Definition: Citral is a pale yellow liquid with a strong lemon-like odor that occurs naturally in the essential oils of plants such as lemon grass, orange, and lemon. It is an unsaturated liquid isomeric aldehyde with the chemical formula C10H16O and is a valuable intermediate for the synthesis of odorants, terpenoids, and vitamins. Citral is used in perfumery and flavorings and is also used in the manufacture of other chemicals. It is insoluble in water but soluble in ethanol (ethyl alcohol), diethyl ether, and mineral oil.