The global flavors market will reach US$15.2 billion by 2020 at a compound annual growth rate (CAGR) of 4.3% from 2015 to 2020, according to an Allied Market Research report.
In 2014, the natural flavors segment took over the lead to hold the majority of share in terms of value.
Strong demand for organic processed food and beverages remained the major growth thrust for natural flavors market segment.
The growth outlook for natural flavors remains strong while synthetic flavors may witness negative growth.
The report finds the demand for organic and healthy food products, changing consumer preferences, introduction of new and enhanced flavors, and demand growth of processed food products have been instrumental in the growth of flavors market.
Further, expanding purchasing powers, changes in eating habits, hectic work schedule and improper diets would supplement the market growth. On contrary, factors such as stringent food safety regulations and few adverse effects on human health would pose a major challenge for the market growth.
However, natural flavors have been able in addressing such concerns and would be growing further on this account.
Geographical markets
North America currently is the largest consumer of natural flavors; however, by 2020, Asia Pacific would catch-up and marginally lead the natural flavors market segment.
In addition, the developing and advance developing nations would render the faster growth for the natural flavors market.
Nevertheless, North America and Europe will continue to hold over half of the revenue share for natural flavors segment till 2020.
Despite overall negative growth in synthetic flavors market, the outlook will remain slightly positive in Latin America, Middle East and Africa.
Asia Pacific will remain the largest market for synthetic flavors by 2020.
Asia Pacific would continue to generate maximum revenue with a market share of 31% by 2020.
Africa would register the highest CAGR of 11.0% during 2015-2020 in the overall market, though at a small base
Latin America would exhibit highest growth in beverage flavors product segment with the highest CAGR of 5.8%.
Huabao International gained about 1.5% market share in 2014 over 2013.
Asia Pacific would consolidate its dominance with strong demand for ice cream, soft drinks, dairy, meat, and animal feed flavors during the forecast period.
In 2015, Latin America would become the billion dollar market and will continue growing at the fastest rate of 5.8% during the forecast period.
Africa, Middle East and Eastern Europe would also witness significant growth on account of growth in demand of packaged food and beverages.
Western Europe will exhibit steady growth while North America would have diminishing growth.
Product sectors
Beverage flavor products segment is the largest in terms of revenue, closely followed by bakery and confectionery, as well as savory and snacks flavors segments.
In contrast, the growth for dairy and frozen product flavors would be highest during the forecast period largely due to high demand of meat flavor products in Asia Pacific and Latin America.
Animal and pet food segment would also gain momentum with emerging economies being at the fore front of the growth. The overall animal and pet food flavors market segment will grow at a CAGR of 4.4% during 2015-2020.
