The flavors and fragrance markets are inextricably linked, being dominated by a handful of big players that serve both markets, including names such as International Flavors and Fragrances, Mane, Takasago, Symrise, Givaudan and Firmenich.
This small number of global players dominates the sector, which in 2009 was valued at $23.4bn, according to the market research provider Freedonia.
Further to this estimate, Freedonia estimates that the sector is destined for healthy growth in the future, which is likely to result in an increase of 4.3 percent in value every year until 2014.
Personal care industry drives growth
Currently the market is dominated by the food and beverage industry, which accounts for 47.2 percent of the estimated value, but that market share is closely followed by the personal and household care industries, which jointly account for 40.5 percent of the market value.
While the market continues to be dominated by the United States, on account of the volume of goods sold for the sector, Freedonia reports that in the future the fastest growth will be in developing regions.
Subsequently the geographic markets of Asia, Central and South America, Eastern Europe and Africa/Mideast are all expected to exceed market growth rates in the years up to 2014.
Watch out for China and India
In particular China and India are earmarked for particular growth in both demand and output, given that the big fragrance and flavors players are all establishing subsidiaries in these countries to meet local demand.
In the personal and household care segment the fastest growth is expected to be fed by demand for cosmetics and toiletry products.
Skin care is expected to provide some of the best opportunities, Freedonia says, as makers continue to expand offerings in the market to include middle-aged and older consumers who are demanding anti-aging products.
Likewise, fragrance formulation will continue to provide a key means of product differentiation within the personal care segment, which in turn will support demand for fragrance blends and aroma chemicals.