Fermented Flavor and Fragrance Ingredients Market Growth and Analysis by 2030

[Research Report] The fermented flavor and fragrance ingredients market size is expected to grow from US$ 1.34 billion in 2022 to US$ 2.68 billion by 2030; it is expected to register a CAGR of 9.0% from 2022 to 2030.

Market Insights and Analyst View:

Fermented ingredients for flavors and fragrances include flavoring, fragrance, and aromatic ingredients that are produced through the microbial fermentation process. Manufacturers are significantly investing in research and development to manufacture fermentation-derived flavor and fragrance ingredients to meet the rising sustainability, supply, and price concerns related to naturally derived flavors and fragrances. For instance, vanillin derived from natural vanilla pods is very expensive, and its suppliers are highly concentrated across specific geographies, which creates supply challenges. Moreover, the yield of natural vanillin is highly dependent on weather conditions, agricultural practices, and other external factors. It is also a time-consuming process which usually takes 6–7 months for production. All these challenges overcome when this same flavoring agent is produced using a microbial fermentation process. It also results in a higher yield in less time. The rising demand for natural and clean-label claims in convenience food products as well as personal care and cosmetic products, along with sustainable approaches to manufacture various flavoring and aroma ingredients, are expected to create new fermented flavor and fragrance ingredients market trends in the coming years.

Growth Drivers and Challenges:

Flavors and fragrances made via synthetic extraction processes consist of chemicals and other fossil fuels, which can harm the environment and human health. The flavors and fragrances made using fossil fuels increase carbon (CO2) and greenhouse gas emissions. For instance, synthetic vanilla flavor called vanillin is significantly more used flavor than natural vanilla flavors owing to its affordability and availability. But vanillin is synthetically manufactured from fossil fuel and wood pulp. Moreover, the yield of natural vanilla flavor extracted from vanilla pods is extremely low. It takes 500 Kg of vanilla pods to obtain 1 Kg of flavor. Thus, both the traditionally used natural process and synthetic process of flavors and fragrances are not sustainable. Similarly, the production of raspberry aroma by farming would require more than 100 metric ton of raspberries, which translates to ~40 football fields of cultivated acreage—a highly unsustainable use of land. Thus, the production of synthetic ingredients, as well as traditionally produced natural ingredients, can harm the environment.

Fermentation is an alternative technology developed to produce flavors and fragrances through sustainable methods and is also considered "natural." According to the US Environmental Protection Agency (EPA), Bioengineering for Pollution Prevention study, fermentation is a more sustainable method of production than traditional chemical synthesis because it is more resource-efficient and generates fewer byproducts. Thus, the flavors and fragrances produced by fermentation do not harm the environment and are labeled as natural and sustainable ingredients. Thus, rising sustainability concerns among end-use industries such as food & beverages, perfumeries, cosmetics, and personal care boost the demand for fermented flavors and fragrances across the globe, thereby favoring market growth. These factors play an important role in determining the fermented flavor and fragrance ingredients market forecast.

Global fermented flavors and fragrance manufacturers are investing significantly in strategic development initiatives such as product innovation, merger & acquisition, partnerships, production capacity scaleup, and expansion of their businesses to attract consumers and enhance their market position. Increasing sustainability concerns and rising demand for natural and clean-label products from consumers have encouraged end-use industries to adopt natural and sustainable ingredients. Thus, manufacturers are constantly investing and innovating in the area of fermented flavors and fragrances. For instance, in April 2023, Insempra, a biology-powered company, launched its first functional ingredient, a biotechnologically produced, 100% natural "alpha-Ionone" flavor and fragrance ingredient for food and cosmetic applications. The flavor is produced via fermentation. The company also partnered with a leading natural aroma ingredients manufacturer and distributor, "Axxence Aromatic GmbH" to market its products to food and cosmetic manufacturers worldwide. Such initiatives by key market players positively contribute to the fermented flavor and fragrance ingredients market growth.

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Fermented Flavor and Fragrance Ingredients Market: Strategic Insights

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Report Segmentation and Scope:

The fermented flavor and fragrance ingredients market analysis has been carried out by considering the following segments: type, application, and geography. The market, by type, is segmented into fruity, floral, woody, blends, and others. Based on application, the market is segmented into food and beverages, personal care products, cosmetics, and others. The fermented flavor and fragrance ingredients market, by geography, is segmented into North America (the US, Canada, and Mexico), Europe (Germany, France, Italy, the UK, Russia, and the Rest of Europe), Asia Pacific (Australia, China, Japan, India, South Korea, and the Rest of Asia Pacific), the Middle East & Africa (South Africa, Saudi Arabia, the UAE, and the Rest of Middle East & Africa), and South & Central America (Brazil, Argentina, and the Rest of South & Central America).

Segmental Analysis:

Based on type, the fermented flavor and fragrance ingredients market is segmented into fruity, floral, woody, blends, and others. The fruity segment holds significant global fermented flavor and fragrance ingredients market share. However, the market for the floral segment is expected to grow significantly during the forecast period. Floral fragrances are used in personal care products, beverages, perfumes, fabric detergents, and home care products. The fermented rose fragrance is usually made using Rhodotorula minuta (yeast). Takasago International Corporation, one of the leading companies in flavor and fragrance manufacturing, produces fermented floral fragrances. Their product Biocyclamol is derived through the fermentation of sugar cane and delivers the fragrance of cyclamen flower. This product is suitable for application in various products such as fine fragrances, fabric softeners, antiperspirants, toiletries, detergents, and soaps. The market growth for the floral segment is attributed to the shifting focus of end-use industries toward fermented floral fragrances due to the rising demand for naturally derived products.

Regional Analysis:

Based on geography, the scope of the fermented flavor and fragrance ingredients market report is primarily divided into five regions—North America, Europe, Asia Pacific, South & Central America, and the Middle East & Africa. Europe dominated the global fermented flavor and fragrance ingredients market share in 2022. The market in the region was valued at US$ 477.82 million in 2022. However, the market in Asia Pacific is expected to register a CAGR of 10% during the forecast period. In Asia Pacific, consumer preference for natural ingredients is significantly growing. Many consumers believe natural ingredients are healthier, safer, and better for the environment than their synthetic counterparts. The demand for products free of artificial or chemically processed ingredients, including synthetic flavors, fragrances, colors, and sweeteners, is growing. The growing consumer preference for natural ingredients among food & beverages, cosmetics, personal care, home care, and personal care product industries is boosting the demand for fermented flavors and fragrances. Countries such as Japan, China, South Korea, Australia, and India are witnessing growth in urbanization rise in middle-class population, and an increase in demand for naturally derived products. The rising sustainability concerns are also upsurging the demand for microbial-based flavors and fragrances.

The beauty industry in Asia Pacific has been growing rapidly. Companies operating in the beauty industry are also adopting sustainable sourcing and manufacturing practices to improve products' performance and lessen environmental impact. Thus, all these factors are expected to drive the fermented flavor and fragrance ingredients market in the region.

In Europe, the rising concerns about the sustainability and environmental impact of certain flavor and fragrance ingredients such as vanilla, sandalwood, and agarwood drive the demand for fermented flavor and fragrance ingredients. Thus, manufacturers in the region have significantly invested in producing sustainable ingredients. For instance, Koninklijke DSM N.V. and BASF, Europe-based multinational companies, have invested a lump sum amount of US$ 13.5 million toward the microbial production of flavor and fragrance molecules in collaboration with a company named Allylix. Such investments by manufacturers aid in boosting the fermented flavor and fragrance ingredients market growth in Europe.

Fermented Flavor and Fragrance Ingredients Market Regional Insights

The regional trends and factors influencing the Fermented Flavor and Fragrance Ingredients Market throughout the forecast period have been thoroughly explained by the analysts at Insight Partners. This section also discusses Fermented Flavor and Fragrance Ingredients Market segments and geography across North America, Europe, Asia Pacific, Middle East and Africa, and South and Central America.

Fermented Flavor and Fragrance Ingredients Market Report Scope

Fermented Flavor and Fragrance Ingredients Market Players Density: Understanding Its Impact on Business Dynamics

The Fermented Flavor and Fragrance Ingredients Market is growing rapidly, driven by increasing end-user demand due to factors such as evolving consumer preferences, technological advancements, and greater awareness of the product's benefits. As demand rises, businesses are expanding their offerings, innovating to meet consumer needs, and capitalizing on emerging trends, which further fuels market growth.

Market players density refers to the distribution of firms or companies operating within a particular market or industry. It indicates how many competitors (market players) are present in a given market space relative to its size or total market value.

Major Companies operating in the Fermented Flavor and Fragrance Ingredients Market are:

1. Jeneil Biotech Inc
2. Dohler GmbH
3. Takasago International Corp
4. Givaudan SA
5. BASF SE

Disclaimer: The companies listed above are not ranked in any particular order.

Industry Developments and Future Opportunities:

Initiatives taken by key players operating in the global fermented flavor and fragrance ingredients market are listed below:

• In July 2020, BASF Nutrition & Health (a German multinational organization) and Isobionics (the Netherlands-based company) launched their first fermented flavor, "Isobionics Santalol," which offers a woody fragrance to the end products. This fragrance is a convincing alternative to sandalwood oil.
• In February 2023, Givaudan SA acquired certain cosmetic ingredients, including Neossance Squalane, Neossance Hemisqualane, and CleanScreen from Amyris Inc. The long-term partnership agreement will allow Amyris to continue manufacturing ingredients for Givaudan's use in cosmetics and provide access to its innovation capabilities.

Competitive Landscape and Key Companies:

Givaudan SA, Firmenich International SA, Takasago International Corp, BASF SE, Evolva Holding SA, Amyris Inc, Insempra GmbH, Conagen Inc, Jeneil Biotech Inc, and Dohler GmbH are among the prominent players profiled in the global fermented flavor and fragrance ingredients market report. These market players adopt strategic development initiatives to expand their business across the globe.