The global Natural Flavor Extract market is estimated to be worth USD 5,461.5 million in 2024 and is projected to reach a value of USD 9,944.5 million by 2034, expanding at a CAGR of 6.2% over the assessment period of 2024 to 2034
Natural flavors, intricate chemical compositions derived from plants, fruits, and microorganisms, are recognized by the FDA as extracts sourced from natural raw materials and free from artificial additives. In this context, "artificial" pertains to synthetic or petrochemical substances.
The market for natural flavor extracts is witnessing significant growth attributed to several factors. Consumer preferences are shifting towards clean-label products, driving the demand for natural ingredients across various industries including food and beverages, cosmetics, and personal care. As health consciousness rises, consumers seek products perceived as more wholesome and less processed, thereby favoring natural flavor extracts over artificial alternatives.
Additionally, regulatory scrutiny and increasing awareness of potential health risks associated with synthetic additives further fuel the industry's expansion. The natural flavor extract ecosystem is expected to continue its upward trajectory, propelled by these factors and the ongoing innovation in extraction techniques and product formulations.
| Attributes | Description |
|---|---|
| Estimated Natural Flavor Extract Market Size (2024E) | USD 5,461.5 million |
| Projected Natural Flavor Extract Market Value (2034F) | USD 9,944.5 million |
| Value-based CAGR (2024 to 2034) | 6.2% |
Furthermore, the demand for natural flavor extracts is amplified by the burgeoning trend of plant-based and organic products. With a growing segment of consumers opting for vegetarian, vegan, or organic diets, there is a corresponding increase in the demand for natural flavor extracts derived from plant sources. This trend aligns with the broader sustainability movement, as consumers seek products that are environmentally friendly and ethically sourced.
Moreover, the natural flavor extract industry benefits from technological advancements in extraction methods and flavor encapsulation techniques. Innovations in extraction processes enable the preservation of delicate flavor compounds, resulting in higher quality and more authentic flavor profiles. Additionally, advancements in encapsulation technologies enhance the stability and shelf-life of natural flavors, expanding their applicability in a wide range of food and beverage formulations
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Growing use of natural flavors extracts in bakeries, confectionery, various beverages, and dairy products
Flavors and fragrances are vital ingredients in various end products such as food products, pharmaceuticals, and the daily use of cosmetics to increase their palatability and acceptability. Different types of flavors are being used in the different end products depending upon the product's nature.
However due to increasing demand and natural ingredients trends across the globe manufacturer increasingly using natural flavors extract in their products such as bakeries, confectionary, Ready To Drink (RTD) beverages, and various dairy products. This increased application is due to the high acceptability of natural flavors extract because of their raw form or the minimal processing without using any chemicals throughout its manufacturing process making it a clean label ingredient.
Rising popularity of natural extracts, aroma extracts, and essential oils
Continuous increase in the demand for the product which has the natural origin concerning their initial raw material. Consumers are more aligned towards products that contain natural flavors, essential oils extracted from various fruits, vegetables, spices, tea, coffee, and vanilla beans, etc. due to the growing awareness and the importance of a healthy lifestyle and the increasing acceptance of natural products have contributed to the rising natural flavors industry over the year.
The manufacturer also increases their product portfolio with natural extracts, infusions, aroma extracts, and essential oils. For this, manufacturers are sourcing top-quality raw materials from across the globe for extraction.
Increasing demand for tailor-made natural flavor extract for different end-use applications
Many end-use industries are demanding high-quality natural flavors and tailor-made natural flavoring solutions for their specific products. So the key industry players are becoming more skilled with their flavorists and the technology at the lab scale and at the large-scale production line at deciphering the chemistry between flavors and their end-use application, thus ensuring top-notch sensory delight.
These tailor-made natural flavors are useful for the development of a new product or increasing the sensory part of the existing product in the field with the touch of natural flavors. Manufacturers are developing the most advanced natural flavor extraction technology beyond traditional distillation and fractionation. This advancement from biotechnology with highly critical fluid extraction techniques in the flavors industry has been useful in manufacturing tailor-made natural flavors for end users.
Focus on expanding production capacities and investing in R&D activities
The key industry leader is focusing and investing huge amounts of money from their budget to research and develop new natural flavors and processing methods to scale up to the trade demand. Their shift to the expanding product portfolio and production capabilities with modern technology due to a surge in the natural flavors demand across the globe. Key industry leaders also collaborate with academic institutions and research institutes across the globe to share knowledge and technology for further development.
From 2019 to 2023, the global natural flavor extract industry experienced robust growth, with sales increasing at a compound annual growth rate (CAGR) of 6.0%. This period was marked by several key factors driving demand for natural flavor extracts, including shifting consumer preferences towards clean label products, increasing awareness of health and wellness, and the rising popularity of plant-based diets. Manufacturers responded to these trends by expanding their offerings of natural flavor extracts derived from botanical sources such as fruits, herbs, and spices.
During this time, the food and beverage industry emerged as the primary driver of natural flavor extract sales, as manufacturers sought to reformulate their products with natural ingredients to meet consumer demand for healthier and more natural options. Additionally, advancements in extraction technologies and flavor formulation techniques contributed to the growth of the industry, enabling manufacturers to create a wide range of innovative and authentic flavor profiles.
Looking ahead to the next decade (2024 to 2034), projections indicate a slightly moderated growth trajectory for global natural flavor extract sales. With an expected CAGR of 3.5%, the industry is anticipated to continue expanding, albeit at a slightly slower pace compared to the previous five years. This forecast takes into account various factors influencing sales dynamics, including evolving consumer preferences, regulatory developments, and macroeconomic trends.
Despite the slightly lower growth rate, the demand for natural flavor extracts is expected to remain strong, driven by ongoing consumer interest in clean label products, sustainability, and natural ingredients. Additionally, the continued expansion of the food and beverage industry, coupled with increasing consumer spending power in emerging categories, is poised to support the growth of the natural flavor extract sales in the coming years.
Principal Consultant
The global natural flavors industry has many big players or MNCs such as International Flavors & Fragrances Inc., Firmenich SA, Givaudan, Keva Flavours, Sensient Technologies Corporation, Mane SA., Corbion N.V., Cargill, Tate & Lyle PLC many more that comprise a significant share of the global sales. These companies have numerous manufacturing facilities.
These distinguish themselves based on supply chains or distribution networks that allow them to supply their products worldwide. They maintain quality checks across the processing line and throughout the supply chain and reduce costs due to advanced manufacturing technology with high efficiency. These big players often engage in partnership and collaboration to develop tailored natural flavor solutions that meet specific consumer needs and industry trends.
Local players on the other hand, often concentrate on certain limitations based on their product type and the end-use applications with the distribution and supply chains network and have formed strategic partnerships with other companies to expand their reach. They may not have advanced technology and wide global reach. They operate with a local presence and serve a niche industry. Such players focus on product quality with traditional processing technology and customer satisfaction rather than commercialization.
However, the industry is proceeding towards fragmentation as more and more players are entering the field from various parts of the globe. The sector is also heavily influenced by government regulations. Overall, the industry comprises a dynamic and complex nature, with MNCs playing the role of a trendsetter.
The following table shows the estimated growth rates of the top three countries. China and India are set to exhibit natural flavors sales, recording CAGRs of 8.2% and 8.5%, respectively, through 2034.
| Countries | CAGR 2024 to 2034 |
|---|---|
| United States | 6.9% |
| Germany | 7.2% |
| China | 8.2% |
| India | 8.5% |
| Australia | 9.8% |
The area for the natural flavors industry in the United States is projected to exhibit a CAGR of 6.9% during the assessment period of 2024 to 2034. By 2034, revenue from the sales of Natural Flavor sales in the country is expected to reach USD 4100.5 million.
Customers in the United States are well aware of health and wellness as well as nutrition regarding the food products and their additives due to widespread access to health information and the adverse effects caused by artificial flavors in food has led to a change in their preference for natural flavors. With a high disposable income of consumers, they are willing to spend on premium health-oriented products that contain natural ingredients such as natural flavors.
The presence of key manufacturing companies of natural flavors in the United States with the widespread distribution network led to an increase the natural flavors sales in the United States.
Consumption of natural flavors in China is projected to increase at a value CAGR of 8.2% over the next ten years. By 2034, the sales size is forecast to reach USD 3,748.5 million, with China expected to account for an industry share of around 22% globally.
Multinational companies and local manufacturers are focusing on the production of natural flavors with the patented advanced manufacturing process with more cost-effectiveness. Developing advanced machinery to scale up the process to supply products with the increasing trend with more efficiency has led the business growth in China for the target product. In addition, these natural flavors are readily used in traditional Chinese dishes as well as in modern cuisine. Such factors are leading the target sales.
The natural flavors category in Germany is projected to exhibit a CAGR of 7.2% during the assessment period of 2024 to 2034. By 2034, revenue from the sales of the natural flavor sales in the country is expected to reach USD 1,673.7 million.
The use of natural flavors in the development of infant formulas, sports drinks, and nutrition with recognizable and minimally processed ingredients. Fast-growing urbanization as well as increased consumer disposable income has resulted in the growing demand for packaged food, pharmaceutical, and cosmetic products with natural flavors, leading the target sales to flourish in Germany
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| Segment | Source (Edible Yeast) |
|---|---|
| Value Share (2024) | 15.7% |
The popularity of edible yeast natural flavor extract is evidenced by its significant category share, accounting for 15.7% of the total segment value in 2024. This data underscores the growing demand for natural flavor extracts derived from yeast, which offer a unique and versatile flavor profile suitable for a wide range of food and beverage applications. Edible yeast natural flavor extract is prized for its savoury and umami characteristics, making it a popular choice for enhancing the taste and aroma of various culinary creations.
Additionally, edible yeast is a natural source of vitamins, minerals, and amino acids, further adding to its appeal as a flavoring ingredient. As consumers continue to seek clean label products and plant-based alternatives, the popularity of edible yeast natural flavor extract is expected to remain strong, driving continued growth in the segment.
| Segment | End Use (Pet Food) |
|---|---|
| Value Share (2024) | 17.4% |
The pet food industry is experiencing a notable increase in demand for natural flavor extracts, as evidenced by its substantial company share of 17.4% in 2024. This data underscores a growing trend in the pet food market towards cleaner and more natural ingredients, mirroring similar shifts observed in the human food industry. Pet owners are increasingly seeking pet food products that are made with high-quality, recognizable ingredients, including natural flavor extracts derived from sources such as fruits, vegetables, and herbs.
The rise in demand for natural flavor extracts in pet food can be attributed to several factors. First, pet owners are becoming more conscientious about their pets' health and well-being, leading them to seek out products that align with their own dietary preferences for natural and wholesome ingredients.
Second, as pets are considered members of the family, there is a growing desire among pet owners to provide them with nutritious and flavourful meals that mimic the quality and variety of human food. Natural flavor extracts allow pet food manufacturers to enhance the palatability and nutritional value of their products, meeting the evolving expectations of pet owners.
The key players in the natural flavors industry are continuously innovating to introduce new flavors with more diverse and delightful flavor formulations from the number of raw materials in the field of business. Key manufacturing companies are involved in strategies such as merger acquisitions, partnerships, and collaborations among others in the industry to expand production capacity and cater to a wider audience. They are also educating the consumers and advertising their products through social media and websites to engage the consumers into using their products.
Brands must strategize ways to retain their sales revenue share by prioritizing sustainability, ethical sourcing, and reducing their carbon footprint.
For instance
As per Source, the industry has been categorized into Flowers, Herbs and Spices, Vegetable/ Vegetable Juice, Fruit/ Fruit Juice, Edible Yeast, Vanilla.
Different End Use include Dairy Products, Confectionery Products, Baked Products, Cereal-based Products, Functional Food, Pet Food, Others (Sauce, Spread etc), Beverages and Nutraceuticals
Different Form include Powder, Paste, Liquid
Industry analysis has been carried out in key countries of North America, Latin America, Europe, East Asia, South Asia, Oceania, and the Middle East & Africa.
The global Natural Flavor Extract market is estimated at a value of USD 9,782.5 million in 2024.
Sales of Natural Flavor Extracts increased at 8.7% CAGR between 2019 and 2023.
International flavors & Fragrances Inc., Firmenich SA, Givaudan, Takasago International Corporation, Sensient Technologies Corporation, Mane SA., Cargill, Tate & Lyle PLC, Associated British Foods plc, Corbion N.V., Keva Flavours are some of the leading players in this market.
The North American market is projected to hold a revenue share of 31.4% over the forecast period.
Europe holds 27.8% share of the global industry for Natural Flavor Extracts.
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