Global Natural Fragrance Market - 2022-2029

Market Overview

Natural fragrance market size was worth US$ XX million in 2021 and is estimated to reach US$ XX million by 2029, growing at a CAGR of 7.2% during the forecast period (2022-2029).

Natural fragrances are fragrances typically derived from all-natural plant-based sources. A fragrance is a product of essential oils, plant-based extracts and other natural aroma-producing ingredients. Various flowers, fruits, wood and spices are used to produce natural fragrances.

The natural sources are processed to obtain the scent oils and concentrates. Various oils and scents are blended to achieve the required scent notes. Natural fragrances have wide applications across a diverse range of industry verticals. Food and beverages, cosmetics and personal and household care products are some of the major industries utilizing natural fragrances in manufacturing their products.

Market Dynamics

The natural fragrances demand is mainly driven by the growing health consciousness among consumers. The high costs and limited production of natural fragrances are key factors in limiting the growth of this market.

Growing health consciousness among consumers

Companies utilize artificial fragrances that mimic the scent profile of natural sources. Artificial fragrances are cheap to produce on an industrial scale, ensuring that consumer product prices remain low for consumers. However, many of these fragrances are potentially toxic for humans and their long-term usage may cause various health problems. Many chemical-based fragrances contain phthalates, which are known to be endocrine disruptors. Similarly, benzophenone and styrene are also found in chemical-based fragrances known to be carcinogenic.

Consumers globally have become more health-conscious in recent years due to the widespread availability of information regarding the negative long-term impacts of artificial fragrances and additives currently widely used in various consumer products. The growing concerns regarding the ill effects of various chemical-based scents and fragrances have forced companies to adopt fragrances derived from all-natural sources. Consumers are willing to pay higher prices to stave off the various long-term ill-effects of chemical-based fragrances. The growing health consciousness among consumers will be a key driver for the growth of the global natural fragrance market.

High costs and limited production of natural fragrances

Natural fragrances are derived from entirely natural sources such as flowers, fruits, vegetables, wood and spices. The sourcing occurs globally from different countries since many sources are unique to a particular region. Furthermore, fragrance extraction from sources is long and laborious with many intermediate processes. A large amount of raw material must be processed to obtain sizeable quantities of fragrance concentrate.

The harvest of natural sources such as fruits, flowers, wood and spices are affected by various factors, including crop diseases, abnormal weather changes and natural disasters. A drop in harvest invariably leads to lower fragrance production and higher prices. The limited production of natural fragrances makes it difficult for companies to expand their portfolio of naturally fragranced products.

Due to their premium nature, products utilizing natural fragrances are priced at the higher end of the market. Due to the premium nature and high prices of the products utilizing natural fragrances, it is out of reach for most consumers. The high cost and limited natural fragrances production are key challenges to the growth of the global market.

COVID-19 impact analysis

The global natural fragrance market was deeply impacted due to the COVID-19 pandemic. Many industries such as cosmetics, personal care product manufacturers and food and beverage companies cut down production drastically to comply with governmental restrictions to control the pandemic. Furthermore, many consumers cut back on non-essential spending during the pandemic, opting for cheaper conventional alternatives to more expensive products utilizing natural additives. It led to a major decrease in demand from various end-use applications.

The massive decrease in demand also affected various natural fragrance manufacturers. It is an advanced industry that constantly needs to innovate and develop new fragrances and fragrance sources to drive growth. The research and development activities in the market were affected by the pandemic. Due to the high growth potential of the market, many new start-ups emerged in the years preceding the pandemic. Many of these start-ups went bankrupt due to the pandemic.

Even as the world slowly enters normalization in the post-pandemic period, the market still faces significant challenges from the aftereffects of the pandemic. Natural fragrances are manufactured from natural sources such as fruits, flowers and spices. A lingering labor shortage caused by movement restrictions imposed during the pandemic has hampered the harvest of natural fragrance sources. Ongoing global supply chain problems are expected to exacerbate this problem further. The global production of natural fragrances is expected to fully recover from the pandemic effects by the end of 2022.

The pandemic will not mar the long-term growth prospects of the global natural fragrance market since rising health consciousness and growing preference for natural additives and fragrances is likely to increase substantially. The demand for natural fragrances remains strong and is expected to grow gradually in the coming years.

Segment Analysis

The global natural fragrance market is segmented into type, source, application and region. The natural fragrance market by application is further segmented into cosmetics, food and beverage, personal care, household care and others. Food and beverage are leading in this segmentation since it is the most widely used application for natural fragrance. Due to growing health consciousness, consumers are shunning artificial additives and fragrances. Many food processing companies are now expanding their product portfolio of completely natural foods in response to growing consumer demand.

Geographical Analysis

Europe has a leading regional share in the global natural fragrance market. It accounts for the largest market share due to the growing popularity of natural fragrances in the region. Many international fragrance and additives developing companies are based in Europe. Europe is home to some of the largest global luxury products and cosmetics manufacturers. Many perfumes and cosmetic formulations developed by these manufacturers utilize unique types of natural fragrances sourced globally.

The European Commission (EC) is the main administrative body of the European Union (EU) and has passed various laws and regulations in recent years to curb the usage of chemical-based fragrances, scents, flavoring agents and additives by deeming them a hazard to public health. It has forced consumer goods manufacturers to adapt fragrances and additives derived from natural sources to comply with the laws. Growing health and environmental consciousness among European consumers is another major factor accelerating the demand for natural fragrance-based products. Although Europe is expected to maintain its leading position in the market, in the long-term, it is expected to be overtaken by North America and Asia-Pacific.

Competitive Landscape

The global natural fragrance market is competitive due to the availability of a wide range of natural fragrances that cater to different end-use applications. Givaudan, Firmenich SA, International Flavors & Fragrances Inc., Symrise, Takasago International Corporation, MANE, Robertet Group, and Sensient Technologies are major players contributing to growth in the market Corporation, T. Hasegawa Co., Ltd and Bell Flavors & Fragrances. The major players in the market adopt several growth strategies such as formulating and patenting new fragrances, researching new sources, collaborations and joint ventures to contribute to growth in the industry.

Givaudan

Overview: Givaudan is a multinational company specializing in developing and manufacturing flavoring agents, fragrances and active cosmetic ingredients. The company primarily develops formulations for food and beverage manufacturers and cosmetic and personal care product manufacturers. Most of the company's formulations are custom-made according to client requirements and are sold under strict confidentiality agreements. Givaudan was founded in 1895 by Leon and Xavier Givaudan and is headquartered in Vernier, Switzerland.

Product Portfolio

Naturals at Origins is the company's proprietary process for manufacturing natural fragrances. The company manufactures natural fragrances on a custom basis as per client requirements. Through the 'naturals at origins' process, it oversees the entire supply chain from sourcing raw materials to final product delivery to the client. The process allows Givaudan to ensure the choicest of raw materials and maintain quality standards throughout the production process. It also allows traceability of sources, ensuring that the company obtains its raw material from responsible and ethical sources.

Key Developments:

On February 12th, 2022, Givaudan unveiled its new brand identity, 'Human by Nature.' The new brand identity was conceived by considering the company's growing emphasis on producing all-natural fragrances and flavoring substances. It also represents a major shift in corporate strategy that emphasizes environmentally sustainable production methods.

Why Purchase the Report?

• Visualize the composition of the natural fragrance market segmentation by the type, source, end-user and region, highlighting the critical commercial assets and players.
• Identify commercial opportunities in the natural fragrance market by analyzing trends and co-development deals.
• Excel data sheet with thousands of global natural fragrance market-level 4/5 segmentation data points.
• PDF report with the most relevant analysis cogently put together after exhaustive qualitative interviews and in-depth market study.
• Product mapping in excel for the critical product of all major market players

The global natural fragrance market report would provide approximately 58 market data tables, 60 figures and 230 pages.

Target Audience 2022

• Natural fragrance manufacturers
• Cosmetic manufacturers
• Personal care product manufacturers
• Food and beverage companies
• Industry Investors/Investment Bankers
• Education & Research Institutes
• Research Professionals