(I-BusinessNews.Com, November 24, 2020 ) According to MarketsandMarkets, the global food flavors market size is estimated to be valued at USD 16.4 billion in 2020 and is projected to reach USD 20.7 billion by 2025, recording a CAGR of 4.8% in terms of value. Emerging markets in upcoming economies such as the Asia Pacific and South American countries are going to be potential markets for the food flavor manufacturers. The increase in per capita income and change in the trends of food consumption are poised to increase the share of the market. These factors are projected to drive the growth of the food flavors market during the forecast period.
Food flavors are food additives that are used to enhance taste, aroma, and the overall experience of the consumer. Food flavors have numerous applications in the food & beverage industry. They are used in a wide range of products such as beverages, frozen food, and dairy products. The industry has witnessed consistent growth in the past few years.
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In North America, the US is among the largest producer of carbonated beverages, snacks, and bakery products. Asia Pacific is projected to dominate the global food flavors market, which is largely driven by the rising demand for both natural and synthetic flavors, especially from China and India. The food flavors industry functions with legislators and regulators to deliver qualitative products to its end users. In North America and Europe, obesity is one of the major issues among individuals. To cater to the varied requirements of potential consumers, non-alcoholic beverage manufacturers have launched diet drinks to curb the calorie count in beverages, thereby increasing the demand for dietary drinks and further augmenting the growth of the beverages segment in the food flavors market.
Drivers: Consumer interest in organic products
The United States Department of Agriculture (USDA) has defined organic food products or ingredients: Ã‚Â“Organic is a labeling term that indicates that the food or other agricultural product has been produced through approved methods. These methods integrate cultural, biological, and mechanical practices that foster cycling of resources, promote ecological balance, and conserve biodiversity. Synthetic fertilizers, sewage sludge, irradiation, and genetic engineering may not be used.Ã‚Â”
According to the USDA, the US organic food industry was valued at ~USD 47 billion in 2018 and is projected to grow at a high rate until 2030. With the rising awareness of adulteration and health hazards due to synthetic food ingredients, consumers have shown a preference to pay more for certified organic food products.
Natural flavors that are compliant with the USDA National Organic Program can be certified as organic flavors. USDA Organic Certification helps organic product producers quote a relevant premium price, along with access to the fast-growing local, regional, and international markets. The USDA monitors and conducts audits for food products certified as organic to ensure that the farms or facilities of the certified products comply with the USDAÃ‚Â’s organic standards.
Restraints: Lower stability
Natural flavors are highly unstable and volatile as compared to the nature-identical or synthetic flavors. Conventionally, natural flavors, being perishable in nature, are unstable during processing, handling, and storage when compared to synthetic flavors; they are unstable to variations in pH, temperature, and light. Natural flavors are volatile to heat, and at higher temperatures, there is a possibility that the flavor will be lost. The dosages of natural flavorings used in frozen and baked products are higher to compensate for its loss at low and high temperatures. This serves as a restraint for the natural flavors market.
Due to their volatile nature, chances of flavor loss during food processing increase. Moreover, natural flavors are expensive due to the limited availability of raw material and high processing costs. Small-scale food manufacturers find this as a non-economical option due to higher raw material costs and losses of flavors. This factor eventually reduces the profit margins for the food processing companies, thereby restraining the market growth.
Opportunities: Innovative Raw Material Sources
The consumption of natural foods is becoming a trend, and the food industry strives to introduce new sources of flavors. Castoreum extract, a natural flavoring that is obtained from the anal glands of a beaver, is used as a natural flavor in beverage, confectionery, dairy, and desserts. Knowledge regarding the biogenesis of plant volatiles, their enzymes, and genes, will pave the way for the production of innovative food flavors.
Microorganisms have a higher capacity for production for natural pigments and extracts. Marine sources are used on a commercial level for flavor extraction; seaweed is one of the most innovative sources that are used by well-established flavor houses. Varieties of superfruits from rainforests are in demand for the use of natural flavors. Such innovations present opportunities for market growth.
Challenges: Compliance with Quality and Regulatory Standards
The food flavors industry faces a legal obligation to abide by the norms and standards of various regulatory standards. These regulatory standards vary by country; however, they have a common goal of ensuring the safety of consumers. The regulations set by different countries also emphasize the usage of flavors and proper labeling of food products. These stringent regulations can delay or prevent the launch of new products, increase the prices of any new product introduced in the market, and may lead to product recalls. Therefore, the implementation of new regulations and modifications in the existing regulations negatively affect the growth of the market.
Mr. Aashish Mehra