Vanilla Extract Market Drivers and Forecasts by 2030

[Research Report] The vanilla extract market size is expected to grow from US$ 261.11 million in 2022 to US$ 409.93 million by 2030; it is estimated to register a CAGR of 5.8% from 2022 to 2030.

Market Insights and Analyst View:

Vanilla extract is manufactured by curing vanilla beans and soaking them in an alcohol solution and water. It is considered an essential ingredient in many desserts, especially baked goods such as cakes, cookies, ice creams, and other. Moreover, vanilla extracts are used in cosmetics and personal care products owing to their antibacterial and anti-inflammatory properties. They are also used in sports formulations such as protein powders. These factors drive the vanilla extract market growth.

Growth Drivers and Challenges:

Vanilla has a unique flavor and aroma, making it a famous flavoring agent across the food & beverage industry. Vanilla extract has been increasingly used as a flavoring agent in cakes, muffins, pastries, doughnuts, and other bakery products for many years. Manufacturers increasingly utilize vanilla extracts in various sweet and savory snacks, with consumers' growing preference for vanilla-flavored products. The growing food & beverage industry and increasing consumer interest in tasty and flavorful products boost the demand for vanilla extract among the food & beverages industry. Moreover, vanilla has extensive usage in the personal care & cosmetic industry. As vanilla is high in antioxidants, which neutralize free radicals and help repair skin damage, it is highly utilized in cosmetics and skincare products. Also, vanilla extract is used as a flavor masking agent in various medicines to mask the off-flavor and improve palatability of the drugs. Thus, increasing usage of vanilla extract among various end-use industries boosts the vanilla extract market growth.

Furthermore, clean-label products are becoming increasingly popular as consumers prefer 100% natural products with no synthetic ingredients such as preservatives, artificial colors, flavors, and others. Consumer demand and international regulations have prompted various application industries to seek active ingredients from natural sources to produce safe and sustainable products. Thus, manufacturers of vanilla extracts expand their product portfolio to fulfil the increasing demand for natural and clean-label ingredients. These factors bolster the vanilla extract market growth across the world.

As the prices of natural vanilla are skyrocketing, local and small-scale end-use industries may switch to low-priced and low-quality synthetic vanilla extracts such as vanillin, which restrains the market growth.

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Vanilla Extract Market: Strategic Insights

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Report Segmentation and Scope:

The global vanilla extract market is segmented on the basis of form, category, application, and geography. Based on form, the market is bifurcated into powder and liquid. Based on category, the market is segmented into organic and conventional. Based on application, the market is segmented into food & beverages, personal care, and others. The market for the food & beverages segment is further segmented into bakery & confectionery, dairy & frozen desserts, beverages, sweet & savory snacks, and others. The vanilla extract market, based on 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 form, the vanilla extract market is segmented into powder and liquid. The liquid segment holds a larger market share. Vanilla extract in liquid form is used as a flavoring agent in various beverages such as wines, cocktails, hot chocolate, and coffee. Additionally, it is widely used in ice creams, smoothies, desserts, and other products. Furthermore, liquid vanilla extract is used in skincare and pharmaceutical products owing to its anti-inflammatory properties. These factors drive the vanilla extract market growth for the liquid segment.

Regional Analysis:

The vanilla extract market is segmented into five key regions—North America, Europe, Asia Pacific, South & Central America, and the Middle East & Africa. North America dominated the global vanilla extract market. The market in this region was valued at US$ 83 million in 2022. The market in Europe is expected to register a CAGR of 6.4% during the forecast period. Developed and developing countries in Asia Pacific witness growth in urbanization, coupled with the rising middle-class population, offering several opportunities for the market players. Consumers seek natural additives in food and beverages, boosting the demand for vanilla extract in Asia Pacific countries. Due to lifestyle changes, urbanization, and stressful lives, people prefer to take aromatherapies for physical and emotional well-being. Vanilla extracts are increasingly used in oils that play a vital role in aromatherapy. These factors propel the Asia Pacific vanilla extract market growth.

North America accounts for ~30% of the vanilla extract market share. North America is one of the prominent regions for the vanilla extracts market due to its increasing demand among various industries such as food & beverages, pharmaceuticals, and cosmetics & personal care. Vanilla harvested and cultivated in Mexico is known as Mexican vanilla. The demand for Mexican vanilla is high among North American countries as they get lower tariffs on vanilla imported from neighboring countries. The demand for vanilla extracts is high in the food & beverage industry, majorly for bakery and ice cream preparation. The high living standard of consumers in the region propels the demand for a premium range of ice creams containing natural ingredients. Vanilla extracts act as a natural flavoring agent. Due to these factors, the vanilla extract market is expected to grow during the forecast period.

Industry Developments and Future Opportunities:

Initiatives taken by key players operating in the vanilla extract market are listed below:

• In January 2021, Blue Pacific Flavors, the US-based company, introduced a sustainable vanilla extract—Kilimanjaro Vanilla. The company states that the newly launched product can meet consumers' demand for clean-label, natural, and sustainably produced products.

Vanilla Extract Market Regional Insights

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

Vanilla Extract Market Report Scope

Vanilla Extract Market Players Density: Understanding Its Impact on Business Dynamics

The Vanilla Extract 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 Vanilla Extract Market are:

1. Eurovanille
2. Prova SAS
3. Tharakan and Co
4. HE Stringer Flavours Ltd
5. Natural Vanilla Pty Ltd

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

COVID-19 Pandemic Impact:

The COVID-19 pandemic adversely affected almost all industries in various countries. Lockdowns, travel restrictions, and business shutdowns in North America, Europe, Asia Pacific, South & Central America, and the Middle East & Africa hampered the growth of several industries, including food & beverages, pharmaceuticals & nutraceuticals, personal care, and animal nutrition. The shutdown of manufacturing units disturbed global supply chains, production activities, delivery schedules, and essential and nonessential product sales. Various companies reported delays in product deliveries and a slump in their product sales in 2020, which hampered the vanilla extract market. The shortage of workforce and limited supply of raw materials also led to a halt in operations and processes across the world during the COVID-19 pandemic. These factors negatively impacted the market growth during the pandemic.

Various trade barriers imposed by governing bodies to prevent the spread of novel coronavirus that causes COVID-19 hampered the imports of raw materials such as vanilla beans. Indonesia, Madagascar, the US, and China are among the major countries producing raw material, which leads to dependency on these countries in other parts of the world. Restrictions on international imports and exports in many countries interrupted the supply of raw materials during the COVID-19 pandemic.

In 2021, various economies resumed operations as several governments revoked the previously imposed restrictions, which positively impacted the global marketplace. Moreover, manufacturers were permitted to operate at full capacities, which helped them overcome the demand and supply gaps.

Competitive Landscape and Key Companies:

Eurovanille, Prova SAS, Tharakan and Co, HE Stringer Flavours Ltd, Natural Vanilla Pty Ltd, Kerry Group Plc, Archer-Daniels-Midland Co, Virginia Dare Extract Co Inc, Lochhead Manufacturing Co, and Synergy Flavors Inc are among the prominent players operating in the global vanilla extract market. These market players adopt strategic development initiatives to expand their businesses, further driving the vanilla extract market growth.