Aroma Chemicals Market Expected to Reach $8.5 Billion by 2031—Allied Market Research

According to a new report published by Allied Market Research, titled, “Aroma Chemicals Market," The aroma chemicals market size was valued at $5.1 billion in 2021, and is estimated to reach $8.5 billion by 2031, growing at a CAGR of 5.4% from 2022 to 2031.

Aroma chemicals are organic compounds primarily used to enhance the scent and fragrances. These exist in both natural and synthetic forms where natural based aroma chemicals are extracted from the plant, animals, essential oil, and others. Synthetic aroma chemicals include aromatic compound based chemicals such as benzenoids, tarpenes, phthalates, and others. Aroma chemicals are used in cosmetics, soaps and detergent, toiletries, perfumes, and others.

Increase in global population, improvement in standard of living, and increase in purchasing power of consumer have led them to seek for unique perfumes, fragrances, and scent for pleasant odor. The upsurge in the demand for natural and synthetic aroma chemicals from personal care and cosmetics products has enhanced the overall demand for aroma chemicals during the forecast period.

Synthetic perfumes are petroleum-based and havr potential side effect on human health. In addition, synthetic aroma chemicals mostly contain phthalate, benzene, and other aromatic compounds. Long lasting exposure of these synthetic chemicals have adverse effect on human such as skin irritation, headache, lungs cancer, and many others. Furthermore, Green seal is non-profit organization in the U.S. which has initiated fragrance free products. For instance, the U.S. Environmental Protection Agency’s provides “Safer Choice” fragrance-free label, Green Seal or ECOLOGO on fragrances. These factors are hampering the synthetic based aroma chemicals market growth.

Rapid shift of consumers toward natural and bio-based aroma chemicals has gained popularity for natural based aroma chemicals. Several key manufacturers have increased their production capacity for natural and bio-based aroma chemicals. For instance Citrus and Allied Essences Ltd and Kao Chemicals companies are actively engaged in offering natural and bio-based aroma chemicals for various end-use industries. These factors are increasing the potential sales of aroma chemicals; thus, offering most lucrative aroma chemicals market opportunities.

The aroma chemicals material market forecast is segmented on the basis of type, process, product, and region.

By type, the market is segregated into natural and synthetic. The synthetic segment dominated the global market, in terms of revenue in 2021, with 64% of total share. This is attributed to the fact that FMCG companies are coming out with a variety of personal care and skin care products in different price ranges, and consumption patterns of cosmetics among teenagers increased substantially between 2005 and 2015 because of increasing awareness and desire to look good. The synthetic aroma chemicals based products are extensively used in the personal care and beauty care sector in the form of lotions, ointments, creams, foundations, perfumes, scent, and others. This is anticipated to increase the demand for synthetic based aroma chemicals.

By process, the market is fragmented into food & beverages, fine fragrances, cosmetics & toiletries, soaps & detergents, and others. The fine fragrances process segment dominated the global market, with 49% of the total share in 2021. The rise in demand for branded perfumery and scent among people is driving the overall growth of fine fragrances. Furthermore, there are several manufacturing companies actively engaged in the manufacturing of customized perfumeries for men, women, and twin & teen. For instance, Sapphire Flavors & Fragrances Company offers amber, woody, leather, or fougère brand perfumes especially for men. Amber scents are often considered animalistic and use ambergris or labdanum combined with vanilla, flowers, and woods which is natural aroma chemicals. This is augmented to increase the demand for aroma chemicals during the forecast period.

By product, the market is fragmented into benzenoids, musk chemicals, tarpenes, and others. The terpenes product segment dominated the global market, with 38% of the total share in 2021. The surge in demand for hand wash fragrances, ointment, creams, lotion, and sanitizers amid pandemic has escalated the demand for terpenes. This is anticipated to increase the overall demand for terpenes during the forecast period. The demand for terpenes has increased in the cosmetics and food & flavoring sector owing to its medicinal properties. This is expected to enhance the demand for terpenes based aroma chemicals; thus, creating remunerative opportunities for the market.

Region-wise, the aroma chemicals market is analyzed across North America, Europe, Asia-Pacific, and LAMEA. The Asia-Pacific aroma chemicals market size is projected to grow at the highest CAGR during the forecast period, and accounted for a major aroma chemicals market share in 2021, with 43% of the total share. The region is showcasing high potential growth owing to the growth of the food & beverages sector where aroma chemicals has been used predominantly. The natural and synthetic aroma chemicals are mainly used in large scale as a flavoring agent in dairy, convenience goods, confectionery, drinks & beverages, and other products for providing exotic and niche flavors to the products. These factors are expected to increase the demand for aroma chemicals during the forecast period.

Key players operating in the global aroma chemicals market analysis include BASF SE, Bell Flowers & Fragrances, Eternis, Givaudan, Henkel AG & Co. KGAA, Kao Chemicals Europe, Privi Speciality Chemicals Limited, S H Kelkar and Company Limited, Symrise, and Takasago International Corporation.

IMPACT OF COVID-19 ON THE GLOBAL AROMA CHEMICALS MARKET

• The novel coronavirus is an incomparable global pandemic that has spread to over 180 countries and caused huge losses of lives and the economy around the globe.
• The aroma chemicals market has staggering and unprecedented impact due to the wake of the COVID-19 pandemic, owing to the disruptions in the supply chain for various aroma chemicals products.
• Inactive manufacturing activities and decrease in the demand for aroma chemicals from various end use industries have led to decrease in the demand for aroma chemicals during 2020.
• The guidelines and policies of logistics and supply chain of the aroma chemicals and chemical market were affected remarkably. Moreover, the supply of aroma chemicals products to marketers and consumers are held both within and across the border during the first quarter of 2020.
• Furthermore, several personal care and beauty care products including fragrances, colon cosmetics, skincare, haircare, has been affected owing to strict government norm and regulation
• Furthermore, several aroma chemicals manufacturing companies have either shut down or shrank their operations due to the risk of infection among the workforce. This has temporarily hampered the demand and supply chain of aroma chemicals market.
• In addition, complete imposition of lockdown in food and beverages, fragrance, consumer products, and other end use sector are being lifted in the year 2021 and growth of aroma chemicals market will come to its original pattern.
• As the restrictions imposed due to lockdowns are being lifted in the fourth quarter of the pandemic, the cosmetics, medical, food and beverages, and other sector is expected to recover soon owing to the record of production unit in both developed and developing economies. In addition, there are several cosmetics company has faced declining sales amid pandemic. For instance, according to an article published by The Economic Times in the June 2021, Lakme Lever sales declined by 19% and slipped into losses during FY2020-2021.

Key findings of the study

• By type, the synthetic segment is estimated to display the highest growth rate, in terms of revenue, registering a CAGR of 5.7% from 2022 to 2031.
• By process, the fine fragrances segment is anticipated to register the highest CAGR of 5.7% during the forecast period.
• By product, the terpenes segment is expected to register the highest growth rate in terms of revenue, registering a CAGR of 5.6% from 2022-2031.
• By region, the Asia-Pacific garnered the highest share of 43% in 2021, in terms of revenue, and is expected to grow at a CAGR of 5.8%.