The market researcher estimates that in 2009 the market for fragrance and flavor ingredients used in the cosmetics sector was estimated to be worth just under $1.3bn, a figure that is expected to grow by 3.4 percent a year until 2014, when it should top $1.5bn.
This figure accounts for approximately 27 percent of the total market for fragrances and flavors valued at $5.5bn by 2014, which also covers industries such as food, beverage, home care and environmental fragrances.
Fragrance is the distinguishing characterisitc for consumers
An abstract from Freedonia’s latest market report entitled Flavors & Fragrances, states: ‘Fragrance has become one of the most important and distinguishing characteristic determining customer purchase decisions regarding cosmetics and toiletries’.
The report also covers flavors used in cosmetic and toiletry products, although the value of this market is nominal, being largely restricted to oral care products such as toothpaste and mouthwash.
Specific product areas where fragrances are likely to be in high demand are likely to be in the high growth categories of the skin care segment, specifically anti-aging formulations and sun care products.
Likewise, demand will also be driven by increasing complex and sophisticated fragrances, together with higher-value natural fragrances, the report states.
Downward trend in cologne and fragrance
However, counteracting some of the effect of the growth areas, will be a general downward trend in the cologne and fragrance market, which is the largest segment of the market.
This will be underlined by a move away from more expensive fragrances, towards less expensive products, as consumers continue to stay away from high-priced premium colognes and fragrances. Likewise, the move towards more natural formulations is also giving way to fragrance-free products, which could curb demand further.
However, despite this trend, cologne’s and fragrances will still account for an estimated 35 percent of the total market for flavors and fragrances in cosmetics and toiletries by the year 2014, giving it an estimated market value of $528m.
In line with this the market for skin care fragrances is expected to be valued at $368m by 2014, while the soaps and body washes category should reach $334m by 2014.