The anticipated size of the global Encapsulated Flavors And Fragrances market in 2022 was close to USD 3.99 billion. The rise in demand for encapsulated flavors and fragrances in the food and beverage, cleaning products, and other end-use sectors can be credited for the market expansion.
It is thus anticipated to have produced USD 7.1 billion by 2023, alongside a CAGR of 5.5% from 2023 to 2033.
In many affluent nations throughout the world, consumer awareness of the latent negative effects of chemically created food additives is rising. Increased customer desire for natural products is a result of growing health consciousness.
Consumers are increasingly aware of the different nutritional advantages of fruits and vegetables, including their increased antioxidant content and lowered risk of metabolic disorders like obesity and type 2 diabetes.
Flavors may be created by encapsulating fruit and vegetable elements without compromising their nutritional value, making them appear more organic than chemically produced equivalents.
Encapsulated flavor and fragrances producers are seeing narrower profit margins because of the demand from processors, merchants, as well as their private label brands.
While the sector for encapsulated flavors and fragrances is now growing due to the tendency toward high-quality ingredients, there is a demand for inexpensive tastes in the food and beverage industry.
Retailers in particular are eager to keep prices down for their economical private label lines since they serve a sizeable portion of budget-conscious customers. Low-cost tastes for fundamental food items like yogurt will persist because to growing raw material prices and the price of basic meals, which are rising quickly.
Manufacturers in underdeveloped nations, where goods must be offered at reduced rates to draw customers, also value encapsulated flavors and fragrances, and hence the demand is expanding at a fast rate.
| Attribute | Details |
|---|---|
| Estimated Market Value (2022) | USD 3.99 billion |
| Expected Market Value (2023) | USD 4.4 billion |
| Projected Forecast Value (2033) | USD 7.1 billion |
| Anticipated Growth Rate (2023 to 2033) | 5.5% CAGR |
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The encapsulated flavors and fragrances market grew at a CAGR of 4.2% between 2018 and 2022. Growth forecasts remain optimistic, with the market predicted to exhibit a CAGR of 5.5% between 2023 and 2033.
The market has gained popularity in recent years due to the growing demand for natural and authentic flavors and fragrances in a variety of end-use applications such as laundry detergents, household care, and the food and beverage industry which includes instant desserts (frozen food), and beverages.
Flavoring agents are added to a variety of foods and beverages. As per FMI analysis, healthy growth in beverage flavoring market is expected over the coming decade. Beverage flavoring sales will rise in response to the surging packaged and sports & energy drinks demand, so will the sales of encapsulated flavors and fragrances.
A primary driver of the market is consumer demand for original flavored products. Developed countries, such as the United States, the United Kingdom, and Germany, are strengthening their technology and research and development (R&D) facilities in the food and flavor encapsulation industry, making it easier for manufacturers to adopt.
Today's health-conscious customer is curious about ingredients used in food items and food safety regulations. Compliance with end-product quality and regulatory standards is a major impediment to market growth for industry players. Food processing businesses in developed and developing countries have experienced significant expansion.
Increasing Demand for Combined Flavors is Likely to be Beneficial for Market Growth
Combination flavors are becoming increasingly popular. These offerings blend two or more flavors into a single product. Unique blends or innovative combinations, such as raspberry floral and ginger flower, are becoming increasingly popular among consumers.
The confectionery segment of the food industry is witnessing a rise in the use of floral flavors like rose and lavender, in addition to fruit flavors like cherry and strawberry.
In terms of market share, the contribution of beverages to the overall food market is increasing steadily. This is attributed to new product offerings catering to specialized products including energy drinks, sports nutrition, naturally sweetened water, and juices.
Flavor encapsulation with blended options in beverages is gaining traction among manufacturers. This is expected to drive demand in the near future.
Expanding Demand for Encapsulated Flavors in the Pharmaceutical Industry
The demand for encapsulated flavors is growing tremendously in the pharmaceutical industry, particularly due to application in products such as syrups, ORS, and more. The pharmaceutical industry prefers encapsulated flavors as these products are non-reactant.
Spray drying is one of the most commonly used pharmaceutical technologies in the world. Insta Foods is offering dry encapsulated cola flavor for use in antacid powders and dry syrups. The company is also offering encapsulated flavors for Apollo Pharmacy in India.
Growing Demand for Natural and Authentic Flavors Enhancing Growth
The demand for natural flavor extract and organic fragrances is expected to rise in the near future. Steered by changing consumer behavior, focus on ingredients derived from natural sources will consistently rise. The removal of additives/preservatives remains a top trend within these product categories as food processors promote these products in terms of safety, quality, and authenticity.
The demand for fragrant items has been increasing over the last decade, and is expected to create diverse opportunities in the near future.
Air fresheners, decorative cosmetics, deodorants, bath additives, perfumes, candles, antiperspirants, soaps, and hair-care, household, oral hygiene, personal-care, shaving, skin-care, and laundry items will drive the demand for encapsulated flavors and fragrances for the foreseeable future.
Principal Consultant
The Flavor Blends to Take the Lion’s Share
The flavor blends of encapsulated flavors and fragrances are the most in-demand product type holding a dominant share of nearly 57.1% in 2022 owing to increased demand of flavors from food and beverage manufacturers.
Mechanical Production Technology will be preferred by Manufacturers
Mechanical production technology is highly preferred, holding a dominant share of 78.7% in 2022, growing at a CAGR of 5.8% over the forecast period.
Within mechanical technology for production, the demand for spray drying will remain considerably high. It is also expected to account for leading share within the mechanical segment in 2023.
Maltodextrin will boost the Global Market by Wall Material Kind
Maltodextrin (DE<20) is the most preferred wall material used in encapsulated flavors and fragrances, which accounts for more than 22.8% of the global market in 2022, followed by modified starch which accounted for 13.9% market share in 2022.
By End-user, the Food and Beverage Segment will Account for a Huge Revenue Share
Food and beverage production accounted for a maximum share of nearly 68.8% in the global encapsulated flavors and fragrances market in 2022.
Beverages such as instant drinks and tea under the food and beverage segment is estimated to holds a maximum share of 30.9% in 2033.
Market Demand is likely to be enhanced by the Powdered Products Segment
Powdered products account for the maximum share of 61.2% in 2022 and is estimated to hold 57.5% of the market share by 2033. Powder being convenient to use is the most preferred form for consumers.
Natural flavor blends are primarily found in powdered encapsulated forms, manufactured using spray-drying technology.
Micro-encapsulation will boost the Global Market Growth
Micro-encapsulation holds a 73.1% market share, and it is the most preferred process for the production of encapsulated flavors and fragrances through the end of the assessment period.
Microencapsulation technology is generally adopted by leading manufacturers since it is an excellent technique for minimizing oxidation, heating, and volatilization if not encapsulated.
Consumer Trend towards Multi-ingredient and Flavor Products will Boost Demand
North America is one of the more lucrative markets for encapsulated flavors and fragrances. According to FMI, the United States is anticipated to account for 88.5% of the North American market in 2033.
Consumers in the United States are inclined towards multi-ingredient and flavor products, considering that the demand for functional food products is increasing at a rapid pace. This is attributable to increasing consumer awareness and rising spending on food and beverages.
Rising Demand from the Consumer Goods and Food and Beverage sectors will Increase Market Revenues
The rising demand for encapsulated consumer goods in Germany will act as a major growth driver. According to the report, the Germany encapsulated flavors and fragrances market is expected to be valued at USD 475.9 million in year 2023.
Europe is estimated to be the dominant market for encapsulated flavors and fragrances in which Germany is projected to hold the largest share. The rising demand specifically for consumer goods, food & beverages, and the pharmaceutical industry is creating a conducive environment for market players to increase sales in Germany.
Consumption of Healthy Drinks is Likely to Open up New Opportunities
Japan is one of the leading technology-driven countries in the world. It is expected to account for 28.5% of encapsulated flavors and fragrances consumption by 2033.
Healthy beverages are in high demand in Japan. Incorporated with encapsulated flavors with functional ingredients to improve consumer experience. The demand for encapsulated consumer goods with enhanced shelf life including laundry detergents, household care, and more is catering to global demand.
The Craze for Functional Foods is Directly Increasingly the Sales of these Products
China accounted for 58.8% of Asia Pacific market in 2022, according to the FMI study. Functional food products are becoming popular among customers of all ages across the country.
Demand for functional food products in China is being driven by factors such as demanding schedules, greater disposable incomes, and higher awareness about healthy dietary requirements.
Encapsulation is a good strategy for controlling the release of flavors. Consequently, corporations in the country are investing heavily in this technology. Authentic, new products with natural taste in addition to colorants, vitamins, and phytochemicals, will generate demand.
Existing and New Companies are enhancing the Overall Sales of the Regional Market
In 2022, India was estimated to command a market share of 45.7%. India is expected to develop at a CAGR of 6.9% over the forecast period. It is quite difficult for companies to penetrate the market since India is a price-sensitive market.
It will be difficult for encapsulated flavors manufacturers to increase the consumption of encapsulated flavors in the country as the price of encapsulated flavors and fragrance is high as compared to free flavors and fragrances.
There is an excellent opportunity for new and existing producers of encapsulated flavors to penetrate the Indian market by reducing the prices of their products.
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Food manufacturing companies are proactively implementing research and development and technology advances in response to the growing demand for healthier food by consumers. Many food companies are working to reduce the quantity of salt, sugar, and sodium in their products.
The key players in this market include:
Some of the products being launched by the key players are:
| Report Attribute | Details |
|---|---|
| Growth Rate | CAGR of 5.5% from 2023 to 2033 |
| Market value in 2023 | USD 4.4 billion |
| Market value in 2033 | USD 7.1 billion |
| Base Year for Estimation | 2022 |
| Historical Data | 2018 to 2022 |
| Forecast Period | 2023 to 2033 |
| Quantitative Units | USD billion in value |
| Report Coverage | Revenue Forecast, Volume Forecast, Company Ranking, Competitive Landscape, Growth Factors, Trends, and Pricing Analysis |
| Segments Covered | Product Type, Technology, Wall Materials, End-Use, Encapsulated Form, Process, Region |
| Regions Covered | North America; Latin America; Europe; Asia Pacific; Middle East and Africa |
| Key Countries Profiled | United States, Canada, Mexico, Brazil, Rest of Latin America, Germany, United Kingdom, France, Spain, Italy, Rest of Europe, Japan, China, Singapore, Thailand, Indonesia, Israel, GCC countries, South Africa, Australia, New Zealand |
| Key Companies Profiled | Cargill Inc.; Firmenich Incorporated; Givaudan; Ingredion Incorporated; International Flavors and Fragrances (IFF); Kerry Group; Royal DSM; Sensient Technologies; Symrise AG; Tate & Lyle PLC |
| Customization & Pricing | Available on Request |
The market is valued at USD 4.4 billion in 2023.
Cargill Inc., Firmenich Incorporated, and Givaudan are the vital market players.
The market is predicted to develop a CAGR of 5.5% through 2033.
The market secured a CAGR of 4.2% from 2018 to 2022.
Surging demand for combined flavors is encouraging sales.
1. Executive Summary 2. Market Overview 3. Market Background 4. Global Market Analysis 2018 to 2022 and Forecast, 2023 to 2033 5. Global Market Analysis 2018 to 2022 and Forecast 2023 to 2033, By Product Type 5.1. Flavour Blends 5.2. Fragrance Blends 5.3. Essential Oils & Natural Extracts 5.4. Aroma Chemicals 6. Global Market Analysis 2018 to 2022 and Forecast 2023 to 2033, By Technology 6.1. Mechanical 6.1.1. Emulsification 6.1.2. Spray Drying 6.1.3. Spray-Chilling/Cooling 6.1.4. Fluidised-Bed Coating 6.1.5. Centrifugal Extrusion 6.2. Chemical 6.3. Coacervation 6.4. Freeze Drying 6.5. Supercritical Fluid Technique 6.6. Nano Precipitation 6.7. Others 7. Global Market Analysis 2018 to 2022 and Forecast 2023 to 2033, By Wall Material 7.1. Maltodextrin (DE<20) 7.2. Corn syrup solid (DE>20) 7.3. Modified cellulose 7.4. Gum Arabic 7.5. Modified starch 7.6. Gelatin 7.7. Cyclodextrin 7.8. Lecithin 7.9. Whey protein 7.10. Hydrogenated fat 7.11. Others 8. Global Market Analysis 2018 to 2022 and Forecast 2023 to 2033, By End-use 8.1. Consumer Goods 8.1.1. Laundry detergents 8.1.2. Fabric softeners and scent boosters 8.1.3. Household Care 8.1.4. Deodorants 8.1.5. Oral Care 8.1.6. Skin Cleansing & Care 8.1.7. Hair Care 8.2. Food and Beverage 8.2.1. Chewing gum 8.2.2. Baked Foods 8.2.3. Confectionery 8.2.4. Dairy Products 8.2.5. Instant Desserts (Frozen Food) 8.2.6. Food Flavors (Snack Food, Cereal, Oatmeal, etc.) 8.2.7. Beverage & Instant Drinks & Tea 8.2.8. Others 9. Global Market Analysis 2018 to 2022 and Forecast 2023 to 2033, By Encapsulated Form 9.1. Powder 9.2. Paste 9.3. Granules 10. Global Market Analysis 2018 to 2022 and Forecast 2023 to 2033, By Process 10.1. Micro-encapsulation 10.2. Nano-encapsulation 10.3. Hybrid-encapsulation 10.4. Macro-encapsulation 11. Global Market Analysis 2018 to 2022 and Forecast 2023 to 2033, By Region 11.1. North America 11.2. Latin America 11.3. Europe 11.4. Asia Pacific 11.5. MEA 12. North America Market Analysis 2018 to 2022 and Forecast 2023 to 2033, By Country 13. Latin America Market Analysis 2018 to 2022 and Forecast 2023 to 2033, By Country 14. Europe Market Analysis 2018 to 2022 and Forecast 2023 to 2033, By Country 15. Asia Pacific Market Analysis 2018 to 2022 and Forecast 2023 to 2033, By Country 16. MEA Market Analysis 2018 to 2022 and Forecast 2023 to 2033, By Country 17. Key Countries Market Analysis 18. Market Structure Analysis 19. Competition Analysis 19.1. Cargill Inc 19.2. Firmenich Incorporated 19.3. Givaudan 19.4. Ingredion Incorporated 19.5. International Flavors and Fragrances (IFF) 19.6. Kerry Group 19.7. Royal DSM 19.8. Sensient Technologies 19.9. Symrise AG 19.10. Tate & Lyle PLC 20. Assumptions & Acronyms Used 21. Research Methodology
Food and Beverage
December 2022
REP-GB-15936
280 pages
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Encapsulated Flavors and Fragrances Market
