Bio-Based Flavors and Fragrance Market 2024 – Market Size & Segments Analysis, Industry Trends, Manufacturers Analysis, Opportunities and Forecast 2034

Bio based flavors and fragrance are derived from natural sources like plants, roots, flowers and other organic materials through processes like extraction, fermentation and bioconversion. These are unlike synthetic counterparts which are chemically synthesized. Bio based variants are so sustainably and are often associated with. The labels and perceived health benefits. These natural products are widely used in the food beverage industry, cosmetics, personal care products and household goods, in order to enhance the sensory experiences and provide appealing sense and taste.

MARKET OVERVIEW

The market valuation of bio-based flavors and fragrance market was valued at approximately USD 2.1 billion in 2023 and is projected to reach USD 5.6 billion in 2034 exhibiting a CAGR of 8.5% during the forecast period of 2024-2034. Bio-based flavors and fragrance provides natural and sustainable alternatives to synthetic compounds enhancing the product appeal and meeting the consumer demand. The market is aligned with diverse sectors, which makes it a sustainable and growing market.

GROWTH DRIVERS

The rise in consumer demand for natural product where consumers are increasingly seeking for natural organic products driven by health concerns and environmental awareness. According to International Food Information Council, nearly 2 in 3 survey takers which is 64%, say they try to choose foods made with clean ingredients. The people choose foods and beverages with clean ingredients, 25% said their top motivation for doing so was seeking out health benefits from foods and beverages with clean ingredients, while 21% are looking to avoid the possible harmful effects of chemical-sounding ingredients.

According to food business news, there is growing interest in healthy foods, with 84% of consumers considering health and wellness when making food choices. In fact, 80% of consumers believe fresh foods are healthier than processed foods. The growing emphasis on sustainability and reducing environmental impacts, leads to increased demand for bio-based products. The European Commission's Green Deal encourages the use of sustainable renewable sources that promotes the adoption of biobased ingredients. The growth in the food and beverage industry is major consumer of natural flavours visualize the market towards growth.

According to Statista, total revenue in the food & drink market is projected to reach USD 2.03bn in 2022. It is expected to show an annual growth rate of 11.3%, resulting in a projected market volume of USD 3.8 billion by 2027.  The expansion of the personal care and cosmetics industry, where they use ingredients to meet consumer demand for clean and green products.  According to Statista, skincare products made up 40 percent of the total global cosmetics market in 2023. Haircare and make-up ranked in second and third places, with market shares of 21% and 17%, respectively. The beauty & personal care market worldwide is projected to generate a revenue of USD 646.2 billion in 2024. The largest segment in this market is personal care, which is estimated to have a market volume of USD 282.8 billion in 2024.

MARKET SEGMENTATION:

·         By Source- Plant- based (Leaves, Flowers, Seeds Bark), Animal-based, Fruit-based, Microbial-based (bacteria and fungi)

·         By Product Type- Essential Oils (Citronella Essential Oils, Clove Essential Oils, Eucalyptus Essential Oils, Corn Mint Essential Oils, Lavender Essential Oils, Orange Essential Oils, Lemon Essential Oils and others), Oleoresins (Paprika Oleoresins, Turmeric Oleoresins, Black Pepper Oleoresins, Ginger Oleoresins and others), Aroma Chemicals Extracts (Benzyl Alcohol, Esters, Levulinic Acid, Cinnamic Aldehydes, D-Limonene and others)

·         By Application- Bio-based Flavors (Bakery & Confectionery, Dairy Products, Pharmaceuticals & Nutraceuticals, Food & Beverages and others) and Bio-based Fragrances (Fine Perfumes, Skincare Products, Haircare Products, Soaps & Detergents, Aromatherapy and Others)

·         By Region- North America, Europe, Asia Pacific, The Middle East and Africa, South America

Bio-Based Flavors and Fragrance Market Segment By Source Review:

The bio-based flavors and fragrances market is segmented by source into plant based, animal based, fruit based and microbial based categories, each contributing uniquely to the market's growth and diversification. Plant based flavors and fragrances are derived from parts such as leaves flowers, seeds and bark. The examples include peppermint oil from leaves, rose oil from flowers, vanilla extract from seeds, and cinnamon oil from bark.

Animal based fragrance and flavor, traditionally valued in luxury perfumery for their unique sense, like musk and ambergris. Fruit based flavors and fragrances sourced from citrus, berries and tropical fruits are popular in the food and beverage industry and personal care products due to their natural and organic appeal. Microbial based flavors and fragrances produced through biotechnological processes involving bacteria and fungi, they produce complex compounds such as vanilla from fermentation. These sources are increasingly used in food and beverages and specialty fragrances.

Bio-Based Flavors and Fragrance Market Segment By Product Review:

The bio-based flavors and fragrances market is segmented by product into essential oils, oleo resins, and aroma chemical extracts, each offering unique characteristics and applications.  Essential oils such as citronella, clove, eucalyptus, corn, mint, lavender, orange and lemon oils are widely used in food and beverages, personal care products and aromatherapy. It is due to their natural origins of therapeutic properties, for example, lavender oil is renowned for its calming effects and is extensively used in cosmetics, while eucalyptus oil is popular in respiratory care products.

Oleoresins including paprika, turmeric, black pepper and ginger oleoresins provide intense flavors and colors, meeting the growing demand for natural ingredients in food products. Paprika oleoresin, for instance, is valued for its rich red color and pungent flavor, making it a popular choice in processed foods. Aroma chemical extracts such as benzyl alcohol esters, levulinic acid, cinnamic aldehydes, and D-limonene are crucial in creating specific scents and flavors driven by consumer preference for unique and consistent products. Esters like ethyl acetate are used for their sweet, fruity aromas in food and perfumery.

Bio-Based Flavors and Fragrance Market Segment By Application Review:

The bio-based flavors and fragrances market segmented by application, serves a diverse range with product requirements. Bio based flavors derived from natural sources like plants, fruits and microbes are favored for their natural origin and health benefits. In bakery and confectionery, they are used to provide rich taste profiles driven by consumer preference for natural ingredients and organic products, with vanilla extract being a popular choice in dairy products. Bio based flavors enhances the taste in yogurts, flavored milk and cheeses, supported by the rising demand for natural and organic dairy items.

Pharmaceuticals and nutraceuticals utilize bio-based flavors to mask unpleasant tastes and improve palatability. In the food and beverage industry, bio-based flavors like lemon extract are extensively used, driven by the preference for natural flavors and health-conscious trends. Other applications include sauces and dressings, highlighting the shift towards natural ingredients. Bio based fragrances are essential in personal care, household and aromatherapy products, offering natural and sustainable scent solutions. Fine perfumes use bio-based fragrances for their unique scent profiles, driven by the demand for natural and organic luxury perfumes, with rose essential oil being highly valued.

In skin care products nio based fragrances like lavender oil are incorporated for their pleasant aromas and skin benefits, supported by the preference for natural skin care. Haircare products utilize fragrances such as tea tree oil for therapeutic benefits, and fragrance soaps and detergents benefit from citrus oils for fresh and clean scents. Aromatherapy extensively uses essential oils like eucalyptus for their therapeutic benefits, driven by the popularity of wellness practices. Other applications include air fresheners and candles, reflecting the broadening use of bio-based fragrances in various consumer products.

Bio-Based Flavors and Fragrance Market Regional Analysis:

North America is a when the market driven by increasing demand for natural organic products, because of health, cautiousness, consciousness and environmental concern. The regulatory bodies, like FDA and other regulatory bodies in North America, promote the use of natural ingredients over synthetic materials, boosts the market growth. Europe is a significant market drive by sustainable initiatives like the European Green Deal which support the shift towards bio-based products. The region is home to leading flavor and fragrance companies like Symrise and Firmenich.

Aisa Pacific is the leading and rapidly growing market driven by the expanding middle class income in countries like China and India, drives the demand for premium natural personal care products, they are also one of the major consumers of bio-based flavors and fragrance. The rising health awareness and environmental concerns among users boosts the market growth. The Middle East and Africa is a promising market driven by strong cultural preference for natural ingredients in traditional and modern products. South America is a growing market by presence of robust food manufacturing sector.

Key Challenges:

The availability of raw materials is one of the most significant challenges for the market. The bio-based flavors and fragrances rely on natural resources, that are subject to seasonal variations climate conditions and agricultural practices. The supply of materials may be inconsistent due to environmental factors and agricultural limitations which may lead to supply chain disruptions. The cost of producing bio which flavours and fragrances are generally higher than synthetic alternatives. This is because of the labor-intensive extraction processes, lower yields and the cost of sustainable agricultural practices.  The natural ingredients often come at a premium price due to the complex and costly process involved in their extraction and purification which may hinder the market growth.

Competitive Landscape:

In the highly competitive bio-based flavors and fragrance market, companies are investing heavily in research and development to innovate and improve the product and services. They are also collaborating, forming strategi partnerships, or acquiring other companies to gain access to new market segments, enhance distribution networks, and increase market share. Recent developments includes – Sensient Technologies acquired Flavor Solutions, in July 2021. 

Global Key Players:

·         Givaudan S.A.

·         Symrise AG

·         Conagen, Inc.

·         Evolva Holding SA

·         Takasago International Corporation

·         International Flavors & Fragrances, Inc.

·         Robertet Group

·         Sensient Technologies Corporation

·         T. Hasegawa Co. Ltd.

·         Other Players