According to new data released by the Freedonia Group, flavors and fragrances for food could be worth some $1925m in 2012, representing annual growth of 3.6 per cent.
The market as a whole is predicted to reach $5279m, with cosmetics and toiletries taking the second biggest slice, at $1415m.
The market researcher says the importance of food as a user of flavors and fragrances is due to the widespread applications. Flavor materials are widely used in processed food, dairy and bakery products, confectionery, and other products.
Moreover, the rise of functional foods presents new opportunities for flavors, since there is a need to mask the sometimes unpleasant taste of vitamins and other nutritious ingredients, Freedonia says.
Beverages are categorised separately, and are expected to reach a value of $475m by 2012. Although flavour demand for beverages is also expected to grow slowly, at 3.3 per cent, “good opportunities remain in sports and other specialty drink markets”.
The rise of cosmetics and toiletries
In 2007 fragrances for personal care products grew by 4.6 percent to reach $1.13bn, making it the second biggest category in the industry behind food, but equally giving it the biggest growth margins, according to recently released data from the Freedonia Group.
The data also indicate that the category should continue to grow at an average rate of 4.6 percent per year to reach an estimated value of $1.41bn in 2012, state that, largely attributable to the continuing trend towards natural ingredients.
In addition, market growth is also driven by the move towards increasingly complex, functional and exotic ingredients to make products stand out more on the shelf.
Freedonia says that unusual or individual fragrances are increasingly playing an important part in creating product differentiation, which is a particularly important attribute in an ever-crowded market.