Global Flavors and Fragrances Market

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1 Global Flavors and Fragrances Market

2 Executive Summary The F&F market is part of a larger market which supplies a variety of ingredients and components that consumer products companies utilize in their products. The broader market includes large multinational companies and smaller regional and local participants which supply products such as seasonings, texturizers, spices, enzymes, fortified products and cosmetic ingredients. Companies in F&F market are targeting their activities towards highly populated and rapidly expanding regions of the world like Asia Pacific, Latin America, Middle East and Africa. North America constituted the largest market for flavors and fragrances followed by Asia-Pacific, Western Europe and South America. It is projected that Asia-Pacific will gradually overtake North America due to the much faster growth anticipated for this region. The global flavors and fragrances market is growing on the back of incessantly increasing demand from emerging markets, rising preference of packaged foods and beverages and escalating cosmetics industry. Ameliorating global economic development and emerging middle class population are other major factors which are bolstering the respective market. Ongoing mergers and acquisitions, changing consumer drinking habits and demand for convenience and differentiation are the significant trends observed in the F&F market. However, there are many factors which hinder the growth of respective industry, some of which are high research and development cost, regulatory risks, significant barriers to entry and fluctuating raw material prices. This report offers a comprehensive analysis of the worldwide flavors and fragrances market, along with an in-depth study of each of its segments. The report also includes the detailed description of global fine ingredients market. The global flavors and fragrances industry is characterized by its dynamic structure and intense competition among the companies operating here. To remain competitive, players continue to invest highly on research and development and develop new products. Givaundan is the market leader in global F&F industry followed by Firmenich, IFF, Symrise, Takasago, Wild Flavors, Mane SA, Sensient Flavors and Frutarom. The competitive landscape along with the company profiles of the leading players in the market is discussed in detail. By combining SPSS Inc. s data integration and analysis capabilities with our relevant findings, we have predicted the future growth of the industry. We employed various significant variables that have an impact on this industry and created regression models with SPSS Base to determine the future direction of the industry. Before deploying the regression model, the relationship between several independent or predictor variables and the dependent variable was analyzed using standard SPSS output, including charts, tables and tests.

3 US$ Billion E US$ Billion The flavor and fragrance industry (F&F) consists of intermediary products to cater to the needs of its customers. Global Fragrance Market Revenues ( E) Fragrances are the key components used in perfumes, beauty care, fabric care, personal wash and home care products. The global fragrance market revenues estimated to reach US$.. billion in 2013, recording a significant increase of..% from US$... billion in the previous year. Flavor and fragrance manufacturers use fine ingredients products as the building blocks for the flavor and fragrance compounds they manufacture. The global fine ingredients market revenues increased from US$... billion in 2009 to US$... billion in 2013, representing a CAGR of %. The worldwide market of flavors and fragrances consists of the traditional market of flavors and fragrances and the upcoming market of fine ingredients which includes aroma chemicals and other cosmetic ingredients. Fragrances are expected to have the highest share of.% in Global Fine Ingredients Market Revenues ( E) Segmentation of F&F Market (2013E) E Flavors Fragrances Fine Ingredients

4 Million Tons US$ Trillion The global F&F market is growing on the back of incessantly increasing demand from emerging markets, rising preference of packaged foods and beverages and escalating cosmetics industry. Global Food and Beverage Industry by Value ( E) E The global food and beverage industry in estimated to increase from US$... trillion tons in 2012 to US$... million tons in 2013 witnessing an annual growth of..%. The market has grown at a CAGR of.% for the period spanning The global retail volume sales for packaged food reached million tons in 2013 from million tons in 2006, representing a CAGR of %. This has created new opportunities for flavor manufacturers for creating food texture, taste and shelf life. North America constituted the largest market for flavors and fragrances with a market share of %. Asia-Pacific accounted for % of market share with demand coming from developing markets like India, China, Singapore and Indonesia. Western Europe has a market share of % followed by South America, Middle East & Africa and Eastern Europe. Global Packaged Food Retail Volume ( E) Global Flavor and Fragrance Consumption by Region (2013) E North America Asia Pacific Western Europe South America Middle East & Africa Eastern Europe

5 US$ Billion Ongoing mergers and acquisitions, changing consumer drinking habits and demand for convenience and differentiation are the significant trends observed in the F&F market. Global Cosmetics Market ( E) E Fragrances are a main component in cosmetics and make-up products. The global cosmetics market is estimated to grow from US$... billion in 2006 to US$... billion in 2013, recording a CAGR of %. Flavors are used in a variety of beverage types ranging from carbonated, noncarbonated, and alcoholic beverages to juices and other functional drinks and thus form the largest share of.% in Dairy industry is the second largest end-use market for flavors that had a market share of %. As of 2013, the soap and detergents industry is the largest user of fragrances in the global market at % share, followed by the cosmetics and toiletries sector at % and fine fragrances at.%. The fastest annual growth to 2017 is forecast for the cosmetics and toiletries sector at % per annum, followed by the soaps and detergents segment at % per annum. Share of End Use Applications of Flavors (2013) Share of End Use Applications of Fragrances (2013) Beverages Diary Bakery Convenience Food Confectionary Meat Sacks Oral Others Soaps & Detergents Cosmectic & Toiletries Fine Fragrances Household Cleaners & Air Freasheners Others

6 F 2015F 2016F 2017F E US$ Billion US$ Billion Companies in F&F market are targeting their activities towards highly populated and rapidly expanding regions of the world like Asia Pacific, Latin America, Middle East and Africa. Global Flavors and Fragrance Market Forecast ( E) Global Flavor Market Revenues ( E) The global flavor and fragrance market is forecasted to grow at a CAGR of.% over the period and will reach US$... billion by the end of The factors driving the growth of the flavor and fragrance market include the improving economic conditions and rising disposable income in emerging markets like India, China, Brazil which have in turn led to an increased use of consumer products utilizing flavors and fragrances. The key factors to support the growth of the industry include growth of end user markets of flavors and fragrances such as food and beverage market, cosmetics market, and pharmaceutical industry, among others. Flavor products are sold primarily to producers of prepared food, beverages, dairy, bakery, processed meat and fish products, confectionery, oral hygiene, pharmaceutical products, animal feed and tobacco products. The revenues from flavors segment witness a minor decline from US$... billion in 2012 to US$... billion in However, the market is anticipated to increase in the future on account of renewed momentum in beverages, continued vitality in sweet goods and sales gains in savory foods. The worldwide market of flavors and fragrances consists of the traditional market of flavors and fragrances and the upcoming market of fine ingredients which includes aroma chemicals and other cosmetic ingredients. Fragrances are expected to have the highest share of % in 2013 compared to % in Share of flavors increased to % in 2013 from % in previous year. Fine ingredients, essentially used by flavor and fragrance manufacturers as the building blocks for the flavor and fragrance compounds they manufacture, had a share of..% in Note: Market attractiveness is inverse of penetration. Low penetration means high attractiveness and vice-versa