The Market for Natural Flavours

The $12.1bn global natural flavors market continues to grow and the drive to clean-label has seen growth opportunities for flavoring materials and seasonings, herbs and spices.

Market Perspective

The market for natural flavours

The way food and drink products are flavored is changing. Companies across the globe are increasingly sourcing natural flavours, however often the issue is a lot more complex than simply replacing a synthetic flavour with a natural alternative. Today food and drink manufacturers expect their suppliers to offer a complete flavoring solution. The drive to clean-label, salt/fat/sugar reduction, simple ingredient lists and using store cupboard ingredients has given rise to growth in opportunities for flavoring materials, seasoning blends, industrial sauces and marinades, rubs and glazes.

In addition, consumer palettes are become more sophisticated, increasingly seeking out spicier, hotter and more flavourful food coupled with a desire for new and exciting taste experiences – wether these are unusual flavor combinations, exotic cuisines or more authentic flavors. Meanwhile, despite the rise in naturals, synthetic flavors are still widely used in many food and drink applications across the globe and the market, while static, is not yet experiencing decline.

For this analysis we have segmented the natural flavors market into natural flavors, industrial seasonings and flavoring materials.

Top note flavours

The global market for natural top note flavors in food and drink is currently worth US$3.9bn, having grown rapidly from just $2.5bn in 2008. Most of the usage is in soft drinks, accounting for 28% share of the natural flavors market, with natural flavors in soft drinks worth US$1.1bn globally. The next largest categories of use are dairy products, which account for 20% of the natural flavors market followed by bakery products with a 14% share.

Seasonings, herbs and spices

At $6.8bn the market for seasonings, herbs and spices in industrial food and drink production is significantly larger than natural flavors. While natural flavors generally have a small usage rate but high value, seasonings are used in much larger volumes but with relatively low value.

Globally, the main categories of use for seasonings, herbs and spices are meat and poultry products, bagged snacks, meals and meal centers and soups, sauces and dressings. Meat and poultry products accounts for 35% of the total market followed by bagged snacks which accounts for a 19% share followed by meals and meal centers at 17%.

Flavouring materials

The drive to clean-label and simple ingredient lists has given rise to increased use of flavouring materials. The market for flavoring materials is worth $1.5bn globally, having grown from just $1.1bn in 2008. Soft drinks is by far the largest area of use accounting for 77% share of the total market.

DEFINITIONS

Natural flavours– Flavoring substances obtained from plant or animal raw materials by physical, microbiological or enzymatic processes. These can be either used in their natural state or processed for human consumption, but cannot contain any nature–identical or artificial flavorings.

Industrial seasonings– Mixtures and blends of herbs, spices and other ingredients, essential to the creation of types of cuisine. Other ingredients may be added, for example, salt, flour, sugar, color, hydrolysed protein, etc. Due to the wide variety of foods and tastes available, the definition of a seasoning has to be flexible. For example, some food manufacturers prefer to use a complete seasoning package, some a simple spice blend while others prefer to blend their own ingredients.

Flavouring materials– natural foodstuffs used to flavor food and drink, often in a concentrated form. Includes concentrated juices (mango, elderflower, citrus) flowers (rose, geranium and other botanicals) concentrated plant extracts, tobacco, vegetable juices/powders (celery, spinach, carrot, olives) seaweed, aloe vera, cocoa extracts/chocolate, garlic oil, balsamic vinegar and wine and yoghurt powders.

Yeast extracts – For this analysis we have excluded yeast extracts which are considered natural. The global market for yeast extracts is worth $1.5bn.