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  • Published On : May 2023
  • Code : CMI3559
  • Pages :130
  • Formats :
      Excel and PDF
  • Industry : Food Ingredients

Global natural and organic flavor market was valued at US$ 7.36 Billion in 2022, and is expected to exhibit a CAGR of 9.39%over the forecast period (2023-2030) to reach US$ 15.09 Billion by 2030.

Natural and organic flavor products are derived from fruits and vegetables, their juices, dairy products, and other healthy animal sources. These are an excellent source of proteins, vitamins, minerals, fats, fibers, and other essential nutrients. Key market players are taking initiative to provide premium quality food and beverages to consumers, with the added benefit of convenience and health benefits that are free of artificial chemicals and added preservatives. Health concerns associated with these products is boosting its demand in the foodservice and catering industries.

Global Natural and Organic Flavor Market- Impact of Coronavirus (COVID-19) Pandemic

COVID-19 is a global public health emergency that affected almost every industry, and during the forecast period, the long-term effects are expected to have an impact on the growth of various end use industries. COVID-19 insights, taking into account changes in consumer behavior and demand, purchasing patterns, supply chain re-routing, dynamics of current market forces, and significant government interventions, which have negatively impacted the global natural and organic flavor market.

Global Natural and Organic Flavor Market: Growth Drivers

Rising Demand for Natural and Clean Label Products

Rising demand for food with natural ingredients and clean labelling, owing to rising health consciousness, increased consumer spending power, and rising food adulteration incidents is expected to drive the market growth. As a result, manufacturers are expanding their natural and organic flavor portfolio.

Clean label products are products that are organic, natural, non-GMO (genetically modified organism), and minimally processed. According to the Clean Label Alliance in June 2021, nearly 75% of consumers are willing to pay a premium for clean label products. Increasing awareness about consumer health is boosting demand for natural and clean label products, and this boosts demand for natural food colors and flavors. Consumers prefer clean label products as people are aware of the negative effects of non-synthetic ingredients.

One of the most important aspects of packaged foods is its clean label. Consumer awareness is strengthening the clean label trend, motivating them to switch to plant-based and natural diets instead of synthetic ones, thereby promoting the development of the natural and organic flavor market. Retailers are also supplying their own private label brands in response to the growing consumer demand for clean label products. The COVID-19 outbreak has prompted consumers to purchase more 'clean label' products, owing to its safety and health benefits.  According to a study published by the International Food Information Council Foundation, in 2021, 57% of people  likes to review FOP (Financial Operating Plan) labels a new or unfamiliar product. More than half of Americans stated that  front-of-package (FOP) labels influence their food and beverage purchases.

Natural Food Product Renaissance among Consumers

Growing consumer consensus that food products derived from natural ingredients are healthier is boosting demand for natural and organic flavors. Customers frequently steer clear of products with artificial ingredients now that both terms are used interchangeably, which is advantageous for the market under consideration. It ensures that the same consumers are constantly checking food labels before purchasing. Several organizational surveys on consumer purchasing behavior that stated that there has been an increase in consumer interest in looking for superior ingredients on food labels. Furthermore, changes in consumer behavior and market dynamics for food flavorings are putting pressure on food producers to stop using artificial additives in their products. Furthermore, major food companies such as Kellogg's, General Mills, Nestle, Campbell, and Kraft had limited the usage of artificial additives and flavors in their product formulations. For instance, in March 2020, IFF (International Flavors & Fragrances) (Israel), partnered with Evolva (Switzerland), a biotech company, to further develop and commercialize vanillin. Under the terms of this agreement, IFF, would be in charge of commercializing the vanillin product developed by Evolva. This would expand the reach of Evolva's developed products and will include newly developed products in IFF's product portfolio.

Figure 1. Global Natural and Organic Flavor Market, By Application, 2022

NATURAL AND ORGANIC FLAVORS MARKET

High Cost of Natural and Organic Flavor and Raw Material

High cost of natural and organic flavor due to high production, processing, and preservation cost is expected to hinder the market growth. Additionally, the stability factor for natural and organic flavors is higher because of reaction-related issues. Temperature, humidity, and chemical compounds in the flavors are the major factors that affect the stability of the natural and organic flavors, and this is expected to hinder the market growth.

Fluctuating prices of raw material price due to bad weather condition that affect the production and ultimately demand and supply is expected to hinder the market growth. Volatile raw material prices have an impact on how smoothly the market for natural and organic flavors operates, as well as on the stability of the company's financial liquidity.

Figure 2. Global Natural and Organic Flavor Market, By Region, 2022

NATURAL AND ORGANIC FLAVORS MARKET

Global Natural and Organic Flavor Market: Segmentation

On the basis of application, in 2022, the food application like dairy products, bakeries, confectionaries, and savories) accounted the largest market share of 57% in terms of value, followed by the beverages respectively. Rising health consciousness among consumers around the globe is expected to drive the market growth. Growing awareness regarding the health benefits of natural and organic flavors among due to high nutritional value of fruits and vegetables is boosting demand for natural and organic flavor. Rising demand for ready-to-eat (RTE) food and ready-to-drink (RTD) beverages that contain natural flavors is expected to drive the market growth. Furthermore, increasing application of flavors in alcoholic beverages is expected to offer numerous growth opportunity to the market of natural and organic flavors over the forecast period. Growing popularity of vegetarian meat flavor among the consumers both vegetarians and non-vegetarians is expected to offer potential growth opportunity to global natural and organic flavors market growth.

The beverage industry is well-known for its unique flavors and ever-changing flavor trends. The taste sector is driven by technological advancements in beverage manufacturing. Favorites at beverage manufacturers blend flavors to perfection and cater to changing consumer preferences. Beverage manufacturers do not alter the flavor. Parle Agro Corporation, offers Appy Fizz, a fizzy apple juice produced by a third party, on the market. Herbs, honey, super fruits, and spices are also healthy flavors that influence beverage flavor trends. Parle Agro, a pioneer in the Indian beverage industry, has been creating innovative products.

Natural and Organic Flavor Market Report Coverage

Report Coverage Details
Base Year: 2022 Market Size in 2022: US$ 7.36 Bn
Historical Data for: 2017 to 2021 Forecast Period: 2023 to 2030
Forecast Period 2023 to 2030 CAGR: 9.39% 2030 Value Projection: US$ 15.09 Bn
Geographies covered:
  • North America: U.S. and Canada
  • Latin America: Brazil, Argentina, Mexico, and Rest of Latin America
  • Europe: Germany, U.K., Spain, France, Italy, Russia, Nordic, Benelux, and Poland
  • Asia Pacific: China, India, Japan, Australia, South Korea, ASEAN, and Rest of Asia Pacific
  • Middle East &Africa:  South Africa, GCC, North Africa, Rest of Middle East & Africa
Segments covered:
  • By Flavor Type: Natural, Organic
  • By Source: Fruit & Fruit Juice (Berries, Citrus, Drupes, Pepos, Pomes, Others), Vegetable & Vegetable juice, Plant & Botanical (Spices, Herbs, Others), Meat & Seafood (Meat & Poultry, Seafood), Dairy (Dairy products, Edible East)
  • By Product Type: From the Named Fruit (FTNF), With Other Natural Flavors (WONF), Oleoresin, Meat & Dairy Flavor, Essential Oil
  • By Application: Food (Dairy Products, Bakeries, Confectionaries, Savories), Beverage (Alcoholic, Non-alcoholic), Nutraceuticals
Companies covered:

Givaudan S.A., International Flavors & Fragrances Inc., Firmenich SA, Symrise AG, Takasago International Corporation, Sensient Technologies Corporation, Kerry Group Plc., Frutarom Industries Ltd., Archer Daniels Midland Company, Döhler GmbH, Huabao International Holdings Limited, T. Hasegawa Co., Ltd, Koninklijke DSM NV, Axxence Aromatic GmbH, Gold Coast Ingredients, Inc., Zymus International Ltd, Treatt Plc, Blue Specific Flavors, Inc., and Unique Flavors and Fragrances Ltd.

Growth Drivers:
  • Rising demand for natural and clean label products
  • Natural food product renaissance among consumers
Restraints & Challenges:
  • High cost of natural and organic flavors and raw material

Global Natural and Organic Flavor Market: Regional Analysis

On basis of the region, Asia Pacific region dominated the global natural and organic flavor market in 2022, accounting for 32% share in terms of volume, followed by Europe and North America respectively. The natural and organic flavor market in Asia Pacific is expected to witness growth, owing to rising consumer awareness about the negative effects of synthetic flavors, and increased consumer spending power in the region. Growing popularity of clean label ingredients with label claims such as 100% natural, non-GMO, and organic in Asian countries such as China is increasing demand for natural food additives such as natural food colorants and natural food flavors. Customers' health concerns about the negative health effects of artificial ingredients is increasing demand for these natural and organic flavors. The influence of western-style cooking in China has increased demand for natural & organic flavors among Chinese consumers in recent years, as demonstrated by the rise in flavoring product imports and domestic consumption. For instance, PepsiCo will launch its first domestic market-inspired launch - an Osmanthus-flavored soft drink - in May 2020, putting local culture and comfort at the heart of its NPD (Narcissistic personality disorder) strategy in China. Furthermore, due to the COVID-19 outbreak, consumption of plant-based and natural products has increased, owing to huge demand for healthy food ingredients and a significant increase in consumer awareness.

Global Natural and Organic Flavor Market: Recent Developments

  • In March 2020, (France) Mane MANE Kancor, a global leader in spice extracts, announced a US$ $21 million investment to expand existing manufacturing facilities in Kerala, Karnataka, and Uttar Pradesh, India
  • In March 2021, Flavor Finders TM, a novel a research-based segmentation tool with a pending patent for the North America market, was launched by Givaudan Taste & Wellbeing in collaboration with the top market intelligence company Bellomy
  • In May 2021,Synergy Flavors, Inc., acquired Innova Foods Pty Ltd., Griffith Foods' leading savory flavor ingredient producer. This acquisition will expand the company’s business globally.
  • In July 2021, PureCircle Limited, one of the world's leading producers and innovators of plant-based stevia sweeteners and flavors for the food and beverage industry, was acquired by Ingredion Incorporated.

Global Natural and Organic Flavor Market: Key Companies

Key players operating in global natural and organic flavor market are Givaudan S.A., International Flavors & Fragrances Inc., Firmenich SA, Symrise AG, Takasago International Corporation, Sensient Technologies Corporation, Kerry Group Plc., Frutarom Industries Ltd., Archer Daniels Midland Company, Döhler GmbH, Huabao International Holdings Limited, T. Hasegawa Co., Ltd, Koninklijke DSM NV, Axxence Aromatic GmbH, Gold Coast Ingredients, Inc., Zymus International Ltd, Treatt Plc, Blue Specific Flavors, Inc., and Unique Flavors and Fragrances Ltd.

*Definition: Natural flavors are essential oil, essence or extractive, oleoresin, distillate, and protein hydro lysate. These flavors are derived from edible yeast, spices, fruit or juice, vegetable or juice, bark, bud, herb, root, leaf or similar plant product, seafood, poultry, eggs, and dairy products. Natural flavor is produced by using irradiation and industrial solvents or synthetic food additives. Organic flavor is produced from the raw materials that are produced organically from cultivation of raw materials to processing and manufacturing of flavors. Moreover, these raw materials should comply with the standard of organic farming which restricts the use of fertilizers and pesticides in farming.

Frequently Asked Questions

Global natural and organic flavor market is estimated to reach US$ 15.09 Billion by 2030.

Key players operating in market are Givaudan S.A., International Flavors & Fragrances Inc., Firmenich SA, Symrise AG, Takasago International Corporation, Sensient Technologies Corporation, Kerry Group Plc., Frutarom Industries Ltd., Archer Daniels Midland Company, Döhler GmbH, Huabao International Holdings Limited, T. Hasegawa Co., Ltd, Koninklijke Dsm Nv, Axxence Aromatic Gmbh, Gold Coast Ingredients, Inc., Zymus International Ltd, Treatt Plc, Blue Specific Flavors, Inc., And Unique Flavors And Fragrances Ltd.

High cost of natural and organic flavors and raw material is expected to hamper the market growth during the forecast period.

Rising demand for natural and clean label products and natural food product renaissance among consumers is expected to drive the market  growth.

The market is estimated to exhibit a CAGR of 9.39% over the forecast period.

Among region, Asia Pacific is expected to hold a dominant position in the market over the forecast period.

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