Aroma Chemicals Market Size, Share & Industry Analysis, By Source (Synthetic and Natural), By Product (Benzoids, Terpenes, Musk Chemicals, and Others), By Application (Food & Beverages, Fine Chemicals, Cosmetics & Toiletries, Soaps & Detergents, and Others), and Regional Forecast, 2024-2032

The global aroma chemicals market size was USD 5.53 billion in 2023 and is projected to grow from USD 5.77 billion in 2024 to USD 8.30 billion by 2032, exhibiting a CAGR of 4.7% during the forecast period. Europe dominated the aroma chemicals market with a market share of 36.89% in 2023.

The efficacy to offer excellent diffusive properties required to create long-lasting fragrances has made aroma chemicals an essential ingredient in various applications and are mostly used in spices, food, perfumes, soaps, wines, detergents, fragrance oils, and others. Aroma chemicals can be infused into a wide array of products, including skincare, haircare, personal care, and toiletries, which creates various revenue streams for market players. Along with the product advantages, the market is expected to grow due to the growing preference of consumers for natural products and the shifting preferences toward premium perfumes and exotic fragrances. In addition, the growing product demand from the food industry as an additive will assist in boosting sales revenue. In conclusion, the increasing demand from the fragrance and the food & beverage industry, along with the increase in consumer spending, is set to propel the global aroma chemicals market growth during the forecast period.

The ongoing coronavirus pandemic has affected the cosmetic market. With nationwide lockdown, international travel bans, and shutdown of retail businesses, the purchasing behavior has drastically changed in personal care and beauty industries as product sales have fallen across many beauty segments. As a result, the global market exhibited a decline in its year-on-year growth in the year 2020.

Aroma Chemicals Market Trends

Momentum Toward Sustainability to Shape the Market

The shift in consumer preference for buying naturally derived fragrances due to their benefits on the skin, and thus avoiding synthetic ingredients due to their adverse health effects, is one of the reasons why the perfume industry is moving towards sustainable fragrances. Concerns over environmental and sanitary risks have led consumers to use perfumes that are made using ingredients that are more natural. The fragrance market is slowly introducing more naturally derived compounds for perfume compositions. In addition, greener fragrance formulations are sustainable, as these processes include conversion, extraction, and fractionation, which are cleaner and efficient with less waste generated and energy used.

Additionally, manufacturers are adopting and developing new extracting technologies that are cleaner and less damaging to the environment. For instance, Privi Speciality Chemicals Limited aims to reduce emissions, improve eco-friendly operations, and recycle waste through its manufacturing processes. The company uses high-value chemicals of aroma from Crude Sulphate Turpentine (CST) and agrochemicals from by-products, thus reducing the waste and enhancing profits.

Aroma Chemicals Market Growth Factors

Expansion of the Cosmetics Industry to Drive Aroma Chemicals Market Growth

The increasing demand for cosmetics and personal care products, such as creams, facemasks, peels, and others due to the widening usage among both men and women shall augment the cosmetics market growth. Changes in lifestyles and a rise in the per-capita disposable income have contributed to the shift towards natural and organic cosmetics, thereby creating avenues in the market. Rapid urbanization and booming e-commerce business have resulted in the increased consumer interest in different premium and new cosmetic products.

Aroma chemicals are widely used in cosmetics and toiletries such as gels, aftershaves, lipsticks, moisturizers, foundations, body and hand washes, body lotions, soaps, shampoos, and others. Such chemicals are used in these products to induce natural scents without hampering the product quality and formulation. As cosmetics have become an integral part of an individual’s life, major cosmetic manufacturers are introducing new products that contain natural ingredients, thus accelerating their sales globally and driving the market growth.

Growing Product Consumption in the Food & Feed Industry to Fuel the Market Growth

Aroma chemicals are widely used to formulate and develop food and feed products in a variety of flavors. These chemicals are used to produce appealing flavor compositions, such as vanillin and ethylvanillin in sweets, raspberry ketone to produce a fruity flavor, mint oil for minty tastes, and others. As people are increasing their consumption of bakery products, cakes, ice creams, and chocolates, it will fuel the demand for various chemicals to develop desired flavors in these products. With the addition of aroma chemicals, these products will retain their fresh kick, smell, and taste. Similarly, feed producers, to enhance the taste of the feed product, commonly utilize chemicals, such as vanillin and cinnamaldehyde. Efficacy in offering excellent taste and smell, these chemicals have become an essential ingredient in the food and feed industry, and growing consumption in these industries is set to fuel the market growth.

RESTRAINING FACTORS

Synthetic Chemicals in Perfumes and Their Potential Health Effects May Affect the Industry

About 95% of synthetic chemicals in fragrances are derived from petroleum-based chemicals such as benzene derivatives, phthalates, aldehydes, and others, which are considered harmful and toxic to human health. These chemicals cause birth defects, cancer, allergies, asthma, and nervous-system disorders among adults and children. In addition, some of these synthetic chemicals are cited as dangerous on the EPA’s hazardous waste list.

According to the Environmental Working Group (EWG) researchers, about 75% of the fragrance’ products contain phthalates, which have resulted in breast cancer, diabetes, reduction in sperm count, reproductive malformation, and disruptive hormonal activities. These factors may hamper the overall market growth.

Aroma Chemicals Market Segmentation Analysis

By Source Analysis

Synthetic Aroma Chemicals Segment to Dominate the Market owing to High Demand from End-use Industries

Based on the source, the market is segmented into synthetic and natural.

The synthetic segment is expected to dominate the market in the forthcoming years. Synthetic aromas are an essential ingredient for manufacturers operating in the cosmetics, personal care, and food & beverage industries. In the food industry, they can replicate the scent of natural foods for snacks, carbonated sodas, and candies. Synthetic chemicals are vital for many fragrance manufacturers to produce a strong natural scent without compromising the characteristics of other chemicals used in the fragrance formulations. There has been increasing demand for cosmetics containing natural scents. However, owing to the risk of skin sensitivities and allergies, it is not feasible to produce natural ingredient cosmetics, which has compelled manufacturers to produce products made of synthetic chemicals.

By Product Analysis

Terpenes/Terpenoids Segment to Hold the Largest Market Share due to its Preferred Medicinal Properties

Based on the product, the market is segmented into terpenes or terpenoids, benzenoids, musk chemicals, and others.

Terpenoids emerged as the dominant chemical segment in 2023. They possess medicinal properties, such as anti-carcinogen, antimicrobial, and antiseptic. Terpenes are used in many flavorings and fragrances as it has a nice aroma. Terpenoids and their derivatives are used as antimalarial drugs such as artemisinin, as they have anti-carcinogen, antimicrobial, and antiseptic medicinal properties. Increasing demand for terpenes in pharmaceutical, cosmetics, food, and other sectors shall augment the segment’s growth.

Musk chemicals are extracted either synthetically or naturally. They are widely found in personal care & cosmetics, food, household products, and soaps & detergents. The increasing demand for personal care products with a surging number of working professionals has led to a rise in the growth of musk chemicals. The increasing popularity of various types of cosmetic products and fine fragrances shall bolster the musk chemicals market size in the forthcoming years.  

By Application Analysis

Fine Fragrances Segment to Hold Major Share owing to Rising Consumer Demand

Based on the application, the market is segmented into food & beverages, fine fragrances, cosmetics & toiletries, soaps & detergents, and others.

The fine fragrances segment accounted for the highest aroma chemicals market share in 2023 and is expected to continue its dominance during the forecast period. This is attributable to the advancement in technology to meet changes in consumer demands and growth in the fragrance industry. The rise in per-capita disposable income and surging demand for natural flavors and fragrances would drive the fine fragrances segment.

Supportive government initiatives and key strategic development by manufacturers may also propel the fine fragrances segment’s growth. For instance, in July 2019, Givaudan, a manufacturer of flavors and fragrances acquired Drom, a perfume house creating fragrances for consumer products and fine fragrances globally. This acquisition will expand Givaudan’s market position in the fragrance industry.

These chemicals of aroma are substantially used in the manufacturing of flavorants, which are used in food preparation for flavor enhancement. Various compounds are responsible for the aroma of food products, such as esters, aldehydes, alcohols, lactones, and others. So, flavors and aromas play an important role in food quality. The rising demand for processed food, along with the increasing consumer taste preferences shall augment the food & beverage segment.

REGIONAL INSIGHTS

Europe stood at USD 2.04 billion in 2023 and is expected to dominate the global market during the forecast period. This is attributed to the increasing demand for fragrance in soaps & detergents and household products in Germany, France, and the U.K. Moreover, the rising consumer spending on luxury and premium fragrances on account of high-income levels and improved standard of living may propel the market growth in this region. Germany is the largest food producer in Europe. The country’s food and beverage industry provide great opportunities for flavor manufactures, as it helps in delivering palatability. Thus, it would favor regional growth in the forthcoming years.

The market in Asia Pacific may witness a significant growth rate during the forecast period. This is attributed to the growing personal care industry in China. The increasing demand for fragrances in China, Japan, and India, along with the rising importance of organic and natural fragrances is expected to drive the regional market growth. The high spending power of consumers in these countries is another factor contributing to the market growth.

Companies are focusing on investing in R&D activities and expanding their businesses in the Asia Pacific region. For instance, in September 2019, Firmenich, a manufacturer of flavors, ingredients, and fragrances opened an innovative Fine Fragrance Atelier in China. The company is providing easy access to all the fine fragrance products to customers in China and worldwide.

The U.S. held the highest share in the North American market in 2023 due to the growth in the personal care and cosmetic industry. A rise in the per-capita disposable income is likely to trigger the expansion of the personal care, cosmetics, and food & beverages industries, along with the growing health-conscious consumers is likely to strengthen the market position in the region.

Increasing demand for the production of soap and detergents and household products may offer massive growth opportunities in the South American region. The rising awareness regarding the importance of household hygiene may boost the demand for detergents and household products in Brazil.

The rapid increase in the demand for cosmetics & personal care products, along with consumer awareness about beauty and hygiene practices shall accelerate the product demand in the Middle East & Africa. The cosmetics market in Africa will grow at an exponential rate, as the low-income population is starting to increase their spending on beauty products to achieve a better appearance.

List of Key Companies in Aroma Chemicals Market

Novel Product Innovation and Acquisition Remain Key Market Strategies of Companies

BASF SE, DSM, Kao Chemicals Europe, Privi Specialty Chemicals Limited, Solvay, and Takasago International Corporation are some of the major specialty gas manufacturers operating in the market. It is observed that leading companies are involved in various organic and inorganic strategies to enhance their stance in the market over their competitors. Hence, to expand their product portfolio and businesses, they are focusing on expansion, product launches, and acquisitions to meet their growing demand from end-use markets. Consumers are progressively becoming more conscious of the usage of the product and its benefits, which has obliged manufacturers to develop affordable, high-quality, and sustainable products. Additionally, key players are expanding their footprint across the value chain and are integrating backward in raw material production to gain a competitive edge in the industry.

LIST OF KEY COMPANIES PROFILED

• Privi Speciality Chemicals Limited (India)


• BORDAS S.A. (Spain)


• BASF SE (Germany)


• DSM (Netherlands)


• Hindustan Mint & Agro Products Pvt. Ltd. (India)


• International Flavors & Fragrances Inc. (U.S.)


• Kao Chemicals Europe (Spain)


• Symrise (Germany)


• Givaudan (Switzerland)


• Solvay (Belgium)


• Takasago International Corporation (Japan)


• Keva (India)


• Eternis Fine Chemicals Ltd. (India)

KEY INDUSTRY DEVELOPMENTS

• March 2023 – BASF SE announced that it is planning to invest in expanding its production capacity for aroma ingredients in the most lucrative countries, such as China and Germany.


• February 2021 – Eternis Fine Chemicals acquired Tennants Fine Chemicals, a U.K.-based specialty chemicals company. This acquisition will expand Eternis’s range of these type of chemicals and leverage multi-distribution and manufacturing platforms. Also, the company will have an established operation in the U.S., Europe, and Asia.


• November 2020 - Symrise AG acquired Sensient Technologies Corporation’s fragrance and aroma chemicals activities. This acquisition will expand Symrise’s market position in Spain and broaden its position as a supplier of fragrance ingredients.


• June 2020 - Givaudan launched VivaScentz, new technology in fragrances across all categories of perfume including personal, fabric, fine fragrance, home, and oral care flavors. This technology will help consumers to enhance a holistic sense of well-being.


• September 2019 - BASF acquired Isobionics and signed a cooperation agreement with Conagen, which will strengthen the company’s natural flavors & fragrance (F&F) ingredient portfolio. The company’s expanded natural ingredients portfolio includes nootkatone, valencene, and vanillin.

REPORT COVERAGE

The global aroma chemicals market research report provides a detailed analysis of the market and focuses on crucial aspects such as leading companies, sources, products, and applications. Also, it offers insights into market trends and highlights vital industry developments. This report includes historical data & forecasts revenue growth at global, regional, and country levels, and analyzes the industry's latest market dynamics and opportunities. In addition to the factors mentioned above, the report encompasses various factors contributing to the market's growth in recent years.

Report Scope & Segmentation