Global Natural Flavoring Agent Market Research Report: Forecast (2022-27)

Market Definition

Natural flavoring agents are natural oils & chemicals that add flavors to food products without distorting their chemical composition. They are derived from plant leaves, barks, dairy items, fruits & vegetables, etc. Consumers have become more conscious of their diet and health, which has subsequently increased the demand for natural ingredients in food & beverages. Additionally, the growing consumption of beverages has also attracted several manufacturers to develop a wide range of natural flavors & maintain their leading position in the market.

Market Insights

The Global Natural Flavoring Agents Market is projected to grow at a CAGR of around 6.9% during the forecast period, i.e., 2022-27. The growth of the global market is likely to be driven primarily by the increasing prevalence of diseases and the mounting demand for organic products. Although natural flavors don’t offer health benefits, consumers tend to buy the foods labeled as “natural.” The rise in the number of diseases such as cardiovascular, respiratory, etc., is triggering consumers to purchase health-beneficial products with natural ingredients.

According to the World Health Organization (WHO), an estimated 17.9 million people died from Cardiovascular Diseases in 2019, representing 32% of all deaths worldwide. As a result, the global increase in the prevalence of diseases is shifting consumers toward natural foods & healthy diets. Additionally, the demand for natural flavors is expanding in various applications, such as bakery, dairy, confectionery, etc.

Several companies have come up with innovative solutions for ingredient creation as Natural Flavoring Agents are used extensively in beverages, processed foods, confectionery, bakery, & pharmaceutical formulations. For instance:

• In 2021, Ingredion Inc. introduced Purecircle™ NSF-13, a natural flavor solution, to deliver sweet taste in various applications, such as beverages, bakery, etc.
• In 2020, Firmenich planned to open its new biotechnology and natural pilot plant & laboratory in Geneva, Switzerland, to develop ingredients & clean label solutions.

Key Trend in the Global Natural Flavoring Agents Market

• Growing Usage of Plant-Based Protein Worldwide

The growing demand for vegan products across the globe has increased the usage of plant-based proteins that offer beneficial minerals, vitamins, amino acids, etc., to consumers and help improve their health. Vegan products necessarily require only plant-based proteins, which has urged the need for natural plant-based flavors in edible vegan products. The increasing focus of consumers toward health & wellness is forcing manufacturers to develop plant-based flavors. As a result, several manufacturers have come up with innovations in food items to promote a healthy lifestyle, which would promote the Global Natural Flavoring Agents Market in the coming years. For instance:

• In 2021, Givaudan launched Protein Hub at its Zurich Innovation Centre in Kemptthal, Switzerland. The Protein Hub would help the company in the development of alternative proteins. According to the company, most consumers are inclining toward plant-based alternatives for a healthy lifestyle.

Impact of Covid-19 on the Global Natural Flavoring Agents Market

With the Covid-19 pandemic in 2020, the paradigm shift of consumers toward buying health-beneficial products surged the demand for natural ingredients in food for improved physical & mental health. Besides, the e-commerce sector has transformed the shape of retails, and it is expanding at a rapid pace with the onset of a pandemic. As a result, consumers are increasingly buying online products & spending on self-care.

Due to restrictions, several hotels, restaurants, etc., were closed down, which severely impacted the growth of the natural flavoring agents market. However, since the pandemic is still ongoing, the demand for natural ingredient-based food products has drastically increased. Several natural flavor manufacturers have come up with innovative solutions for ingredient creation, which has surged the use of natural flavoring agents in beverages, processed foods, confectionery, bakery, & pharmaceutical formulations. The same trend is likely to be followed in the coming years, which, in turn, would create remunerative growth opportunities for the global market.

Market Segmentation

Based on Application:

• Beverages
• Bakery
• Snacks, Soups & Sauces
• Confectionery
• Dairy & Frozen Products
• Pharmaceuticals & Dietary Supplements
• Animal & Pet Foods
• Others

Of them all, Beverages held a sizeable share in the Global Natural Flavoring Agents Market due to mounting health consciousness among consumers along with their growing demand for nutritious drinks. The high usage of artificial flavor in carbonated & energy drinks has been one of the prime causes of multiple lifestyle-based diseases among consumers worldwide, which, in turn, has shifted beverage manufacturers toward using natural agents in their product offerings. 

As a result, several leading beverages manufacturers have started offering natural flavor-based drinks, i.e., encouraging other companies to adopt a similar strategy to attract health-conscious customers. For instance:

• In 2021, PepsiCo. launched five permanent flavored drinks, including Pepsi Mango, Pepsi Mango Zero Sugar, etc., with 12-oz cans & 20-oz bottles in retail stores. The drinks include a blend of mango juice, cola, & natural flavors.

By Form:

• Liquid
• Powder
• Paste & Emulsion

Here, Liquid natural flavoring agents are expected to attain a considerable share in the Global Natural Flavoring Agents Market during 2022-27. Liquid flavoring agents offer easiness in blending and mixing the natural flavor ingredients. The growing health concerns like high blood pressure, diabetes, etc., are shifting people toward adopting healthier liquids like fruit juices, sugar-free drinks, etc., which, as a result, has encouraged manufacturers to produce fruit-based liquid flavoring agents.

Moreover, manufacturers are developing new technologies to reduce the sugar content, which is another crucial aspect expected to increase the market share of liquid flavoring agents in the years to come. For instance:

• In 2020, Firmenich & Novozymes jointly developed a natural sugar reduction solution TasteGEM® SWL with Saphera® lactase.

By Source

• Plants
  • Fruits
  • Vegetables
  • Herbs & Spices
  • Nuts
• Animals
  • Dairy
  • Meat

Of both, Plant-based flavors have gained a considerable market share during 2017-21, mainly due to the burgeoning demand for vegan food, adoption of healthy eating habits, surging intake levels of health supplements by consumers worldwide, especially after the Covid-19 pandemic.

The adoption of veganism has forced food & beverage manufacturers, particularly across North America & Europe, to use natural flavors in their product offerings, which, in turn, has promulgated the demand for plant-based natural flavoring agents across these regions. Moreover, many companies have started collaborating to develop plant-based natural flavoring agents and are fueling the overall market growth. For instance:

• In 2021, Givaudan SA collaborated with Biosyntia ( a Denmark-based Biotech Company) to explore the utilization of fermentation technology for creating natural flavor ingredients. Givaudan planned to use sugar to develop natural flavor ingredients for food & beverages.

Regional Landscape:

Based on the Geography, the Global Natural Flavoring Agents market expands across:

• North America
• South America
• Europe
• Middle East & Africa
• Asia-Pacific

Of all regions globally, North America holds the major share in the Natural Flavoring Agents Market due to the consumers' shift towards natural food ingredients, organic products, clean labeling, etc., during 2017-19, coupled with the extensive presence of natural flavoring agent manufacturers across the region.

Consumers in North America are rapidly shifting toward organic vegetables & fruits for improved health. These products are grown without the use of harmful chemical fertilizers & pesticides, and, as a result, they provide higher nutritional content than chemical-rich foods. Additionally, the long-term & severe effects of artificial ingredients & chemicals present in food products on health are also inclining consumers to opt for natural ingredients.

Moreover, the United States FDA has banned the use of 7 synthetic flavoring agents, i.e., another prominent aspect expected to drive the regional market. Hence, the growing need for organic products to maintain a healthy lifestyle & reduce the long-term effects of artificial ingredients are propelling the demand for natural flavoring agents in the region. The growing trend of natural ingredients in food is attracting manufacturers to adopt innovative technologies to improve product sustainability by adding natural flavoring agents. For instance:

• In July 2021, IFF launched a cost-effective natural flavor, 'GUARDIAN® Chelox 30C' in North America. It comprises antioxidants, texturizing, and moisture retention properties for mayonnaise & mayonnaise-based dressings.

Recent Developments by Leading Companies

• In 2022, Royal DSM launched a new Food & Beverage business group that merges its three business areas (Food specialties, hydrocolloids, and part of its nutritional products group) to align with customer & market needs. The new group will unite the full range of natural food & beverage ingredients, expertise, and science-based solutions to improve the texture & taste and promote healthier lives.
• In 2021, IFF invested USD 87 Million in a new extended flavors manufacturing facility in Karawang, Indonesia. The facility supports full manufacturing capabilities such as liquid compounds to powder, emulsions, spray dry technology, etc.

Market Dynamics:

Key Driver: Growing Awareness about Natural Ingredients in Food

Food consumption levels worldwide have grown considerably due to rapid urbanization and a surge in disposable income. Mounting awareness regarding healthy lifestyles is compelling consumers to include natural ingredients in their food, which, in turn, is positively impacting the demand for natural flavoring agents.

With the growing world population, the pressure on flavor manufacturers in an already competitive space is increasing, i.e., leading them to offer innovative natural flavors. Additionally, the food & beverage industry is linked increasingly with the health & wellness space and consumer expectation for delicious products that support health alongside environmental & social aspirations. This has forced manufacturers to develop new products for consumers. For instance:

• In 2021, Firmenich launched Dynarome® SR, an Innovative Natural Ingredient, to provide meat-like juiciness in Plant-based alternatives. The solution offered by the company assists in recreating the juicy taste in vegan products.
• In 2019, Givaudan launched an innovative flavoring approach to change the taste experience of meat substitutes created from textured vegetable protein. The type of protein is used widely in plant-based meat alternatives.

Market Restraint: Limited Shelf Life of Natural Flavors

Natural ingredients are added to food products to enhance the taste, and these products are then stored at different places until delivered to the end consumer. These ingredients have limited & less shelf life compared to synthetic flavors, which impacts their application in food products. The shelf life of the food depends primarily on the type of process, formulation, packaging material, and storage conditions. During this processing period, several chemical changes take place. The prime concern is the natural flavor stability, i.e., maintaining the shelf life of food products and the flavor intensity throughout all processing stages.

The process of extracting natural elements is complex and requires high costs & advanced technologies. Moreover, the long-supply chain requires food products with higher shelf life. The movement of food products to several different locations reduces the shelf life of natural flavors. Hence, this aspect might impact the growth of the Global Natural Flavoring Agents Market in the years to come.

Growth Opportunity: Stringent Regulations Banning the Utilization of Synthetic Flavorings

The United States Food & Drug Administration has prohibited the consumption of 7 Synthetic Flavoring Agents from the food additives list. Additives are used mainly for adding or enhancing flavors in various products, such as ice cream, cookies, and all other foods & beverages.

The 6 banned chemicals, viz., synthetically-derived Benzophenone, Ethyl Acrylate, Eugenol Methyl Ether (Methyl Eugenol), Myrcene, Pulegone, & Pyridine, were listed as artificial flavors on food labels, owing to which consumers never recognized them. The use of these flavors showed that they were causing cancer in laboratory animals. Additionally, the seventh substance, styrene, was restricted due to its no use in the food industry. As a result, the government initiative mentioned above is a healthy indicator expected to create lucrative growth opportunities for the Global Natural Flavoring Agents Market in the coming years.

Key Questions Answered in the Market Research Report:

1. What are the overall statistics or estimates (Overview, Size- By Value, Forecast Numbers, Segmentation, Shares) of the Global Natural Flavoring Agents Market?
2. What are the region-wise industry size, growth drivers, and challenges?
3. What are the key innovations, opportunities, current & future trends, and regulations in the Global Natural Flavoring Agents Market?
4. Who are the key competitors, their key strengths & weaknesses, and how do they perform in the Global Natural Flavoring Agents Market based on the competitive benchmarking matrix?
5. What are the key results derived from surveys conducted during the Global Natural Flavoring Agents Market study?