Onion and Shallot Flavor Market Size, Share & Industry Analysis, By Source (Onion and Shallot), By Profile Type (Boiled, Fried, Dehydrated, and Others), By Form (Liquid and Dry), By Category (Organic and Conventional), By Application (Household, Food Service Sector, and Industrial [Bakery Products, Condiments {Liquid seasoning and Others}, Dairy Products, Processed Food and Snacks {Instant Noodle, Flavor Blends, Snacks, and Ready to Eat Meals}, and Others), and Regional Forecast, 2024-2032

The global onion and shallot flavor market size was valued at USD 548.17 million in 2023. The market is projected to grow from USD 575.80 million in 2024 to USD 887.17 million by 2032, exhibiting a growth at a CAGR of 5.55% during the forecast period. Asia Pacific dominated the onion and shallot flavor market with a market share of 39.46% in 2023.

Some of the prominent manufacturers of onion and shallot flavor include Ajinomoto Co., Inc., Symrise, Sensient Technologies Corporation, Azelis Group NV, and T.Hasegawa USA Inc.

Onion and shallot flavor is a key food additive and flavor enhancer widely used in various food products, including savory snacks, fermented dairy products, soups, broths, and sauces. Flavor products are available in dry and liquid form, including dehydrated powder, flakes, minced, chopped, granules, pickles, and others. The flavor offers exotic flavor notes, authentic taste, and texture to the food product. Increasing consumers' purchasing behavior coupled with natural food flavor enhancers' popularity will significantly drive the global market growth. 

MARKET DYNAMICS

MARKET DRIVERS

Increasing Consumption of Processed and Ready-to-Eat Food to Propel  the Product Demand Globally

In the past few years, the demand for processed and prepared food products has been exponentially growing globally. Onion and shallot flavors, such as dried flakes, powdered, chopped, and roasted onions, offer umami flavor and enhance the prepared food product’s taste, flavor, shelf life, and texture. The changing consumer food preferences coupled with a growing inclination towards convenience and ready-to-eat food products are primarily driving consumption of onion and shallot flavors. This inclination was further intensified by the pandemic, which changed the dynamics of the prepared food business and stimulated sales to new heights. Furthermore, increasing women's employment rate is further contributing to the market growth as these consumer groups prefer taste enhancers to provide an exotic taste for prepared, ready-to-cook, and homemade food products. The product’s convenience factor will further influence to adopt the flavor enhancers in cooking-at-home or household consumption. According to the Periodic Labor Force Survey, the female labor force in India increased from 37% in 2022-23 to 41.7% in 2023-24. Therefore, increasing RTE foods demand along with cook-at-home will drive the global onion and shallot flavor market growth in the forecast period.

Emerging Vegan and Plant-Based Food Ingredients Demand to Influence the Onion Flavor’s Sales Globally

Vegetarianism and veganism are part of a trend that is strongly growing globally. Over the past decade, the U.S. and Great Britain have witnessed a significant increase in the vegan population. The trend for vegetarianism and veganism has no great impact on sourcing. However, it influences flavors, seasonings, and spices mixing and ingredient companies, which are now producing more innovative flavor ingredients using plant-based products such as fruits and vegetables. Flavors made from red onions and white onions, such as powder, fermented oil, caramelized onion, and roasted onion, have a strong umami flavor and act as a natural flavoring in many plant-based meat products.

Furthermore, onion and shallot flavors have a high sulfur content, which contributes to their ability to yield meat-flavored compounds. Hence, the onion flavor is gaining more popularity in the vegan meat production industry. According to the Good Food Institute, a non-profit organization that promotes plant—and cell-based alternatives to animal products, the total retail sales of plant-based food products in the U.S. reached approximately USD 8.1 billion in 2023. The GFI also claimed that more than 81% of households purchased plant-based foods more than once throughout the year in 2023.

 

MARKET RESTRAINTS

High Fluctuations in Raw Material Costs and Dependency on Climate Conditions to Hamper the Market Growth

Onion is a commercial crop traditionally cultivated in the U.S., India, China, and Egypt. It is highly dependent on climatic conditions and weather. Adverse weather conditions, higher stockpiles, the increase in demand from processors, and subsidized crop cultivation inputs distribution to farmers influence the prices of onion flavor products. Onion is the key ingredient in the manufacture of onion flavor. The decline in global fresh onions and shallots production and the increasing price of onions will negatively affect the market growth in the near future. The Union Agriculture Ministry of India has reported a notable decline in onion production in the country for the marketing year 2023-2024. According to the latest data, onion production in India declined by 19.84%, accounting for 242.12 lakh tones in the financial year 2023-24. Unseasonal rains, lower acreage, and delayed and scanty monsoon rains hitting key growing areas in Maharashtra and Karnataka are the primary reasons for the production volume decline.

MARKET OPPORTUNITY

Culinary Versatility to Propel Market Growth in the Upcoming Years

Onions and shallots flavors are one of the essential ingredients widely used in a wide variety of cuisines globally. Their versatility in enhancing the flavor of savory dishes contributes to their consistent demand in the culinary world. Onions and shallots often serve as staple ingredients in many recipes, including soups, stews, sauces, and various other dishes, which provide a foundational flavor base for these cuisines. Furthermore, the onions and shallots are recognized for their potential health benefits. They contain various vitamins, minerals, and antioxidants. Consumer awareness of the health advantages associated with these vegetables can further enhance product usage in various food applications.

MARKET CHALLENGE

High Tax Imposition to Hamper the Market Growth

High tax imposition on raw material trade and production volume decline in key onion-producing countries such as India and China are negatively affecting raw material supply in the global market. It will raise the operating expenses of flavor manufacturing companies. Thus, the market is anticipated to experience slow growth during the foreseeing years. Additionally, to maintain regional market demand, the government imposes higher export duties and taxes. It may affect several key players who depend on raw material imports. For instance, in May 2024, the Indian government imposed a nearly 40% duty on exporting onion. As a result, Indian onion exports fell nearly 50% in June.

Onion and Shallot Flavor Market Trends

Emerging Sustainable Raw Material Sourcing Turning into an Emerging Trend

Consumers are now more conscious and inquisitive about products' origins and production processes. Quality assurance and food safety departments at consumers and retailers demand this information. Therefore, companies that are actively involved in producing and supplying onion flavors are widely investing in achieving safety standards, quality, and sustainability-related certificates such as BRCGS, ISO 22000, Halal, Organic, and Kosher. The companies are investing in the vertical integration business model to ensure the quality of their raw material, which is expected to help deal with raw material quality problems. For instance, Olam International Limited, Boardman Foods, Inc., and McCormick & Company, Inc. have started a vertical integration business model in their business to give surety about their product quality and transparency while achieving more sustainability in their supply chain activities.  

Impact of COVID-19

The outbreak of COVID-19 pandemic had a major impact on consumer behavior. On the demand side, industry and consumers were increasingly buying shelf-stable food products, such as instant noodles, sauces, ready-to-prepare foods, and food ingredients such as masalas, spices, flavorings & seasonings. On the supply side, the largest producing countries were not able to export due to border closures. The sudden spread of the virus globally presented numerous challenges for the global onion and shallot flavor market. Primary producers around the world have been affected by the withdrawal of manufacturing facilities due to containment measures, such as auctions and the closure of wholesale markets and production plants. The raw material shortage and labor shortages caused by the migration of the workforce have also affected the major production hubs for the onion and shallot flavor market. In China, factories were closed, affecting the supply of key products such as ginger, garlic, onion, and so on. It has affected the global supply of onion flavors and raw material. Therefore, the industry has experienced moderately negative growth during the COVID-19 pandemic timeframe.

SEGMENTATION ANALYSIS

By Source

Higher Availability and Intense Umami Taste to Drive the Onion Flavor Demand

The market is segmented into onion and shallot, based on source.

Onion-sourced flavors hold the largest market share. Onion flavoring products such as powder, oil, and dehydrated flavor products offer fermented and toasted flavor notes to a wide variety of food products, such as soups, stews, and processed foods. Furthermore, the onion offers a tangy and umami flavor in processed meat and seafood products. Therefore, the onion flavor is widely utilized in the household, food processing industry, and industrial applications. Furthermore, onion is less expensive as compared to shallot. It will offer a price benefit to the flavoring manufacturer. Therefore, the abundant availability of raw materials and the inexpensive price nature of the final product will positively drive the segment growth in the near future.

In comparison with shallot, onion is widely cultivated in Asian countries such as China and India. Shallot is highly sensitive for climate change, and it may affect its yield. Thus, its availability in the market is relatively limited.           

Shallots have a milder and sweeter flavor than onions, with a hint of garlic. Therefore, the shallot flavor is becoming more popular in food products that require lesser onion flavor, such as salad dressings, prepared meals, and packed savory snacks. Therefore, the segment exhibits a promising growth rate during the forecast period (2024-2032).  

By Profile Type

Longer Shelf-Life of Dehydrated Products to Propel the Dehydrated Profile Demand

The market is segmented into boiled, fried, dehydrated, and others, based on profile type.

Dehydrated profile types hold the largest market share. Dehydrated onion and shallot flavors hold a dominating market proportion in the global space. They are flavorful and versatile ingredients that can enhance the taste of many dishes. Dehydrated onions have a highly concentrated flavor that's more intense than fried, boiled, minced, and flaked flavor profiles. Furthermore, the dehydrated onion retains the sweet-tart balance of fresh onions and is less pungent and spicy. Therefore, it is more adequate and effective in enhancing the taste profile of masala blends, instant food products, and prepared meals. Dehydrated onion flavor products have a longer shelf life and can easily be stored without any extra care. Furthermore, dehydrated flavors will properly blend with premixes compared to flakes, boiled or fried. Therefore, they are becoming more popular in the natural flavors sector.

Boiled onion flavor is emerging as the fastest-growing segment during the forecast period. Increasing new product launches, research & development activities, and adoption of boiled onion flavors in food service industry applications such as hotels, restaurants, and cafes. Expanding HoReCa sector in the global space will drive the boiled profile type in the upcoming years.  

By Form

Multiple Applications in the Food Industry will Primarily Drive the Dry Form of Flavors Demand

On the basis of form, the global onion and shallot flavor market is segmented into dry and liquid.

The dry onion flavor segment holds the largest proportion of the global market. Dry onion flavors, including onion powder and dehydrated onion flakes, have several benefits over liquid or oil-based onion flavors, such as high intense flavor notes and flexibility. Dry forms of onion flavors are easy to manufacture and have fewer technical complexities. Therefore, a larger number of flavor manufacturers produce onion flavors using dehydrated methods. Therefore, the segment is also anticipated to expand with the highest growth rate in the near future.

Onion flavor manufacturers traditionally follow several technologies and processing methods, such as extrusion technology, reduced steam distillation, hydro-distillation, supercritical fluid extraction (SFE), and solvent extraction, to produce a liquid form of onion & shallot flavors. The liquid onion flavors are widely used in savory fluid food products such as sauces and soups. Emerging demand for sauces and soups in the global market will drive the liquid form of onion flavors from the food processing and food service industries.

By Category

Emerging Organic Food Popularity to Propel the Organic Onion Flavors Demand

Based on the category, the market is segmented into organic and conventional.

The conventional category of onion and shallot flavors hold a prominent market share in 2023 due to wider availability, easy accessibility, and lower price benefits. Onion production in conventional farming is dominating globally, owing to practicing traditional farming methods, less awareness about organic farming, higher operational costs for organic farming, and higher yield expectations among farmers. As a result, the availability of conventional category onion for produce flavors in the market is relatively high. Therefore, the conventional onion flavors segment is anticipated to hold the dominant share throughout the forecast period.

Organic category onion flavors will exhibit a higher CAGR during the forecast period 2024-2032. The increasing popularity of organic foods in processed foods and packed meals is forcing food processing companies to source organic standard food ingredients. Furthermore, emerging organic farming and cultivation areas across the world are significantly influencing the segment's growth. India is one of the key onion-producing countries. Organic cultivation land, including onion, has increased considerably in India. According to the Agricultural and Processed Food Products Export Development Authority (APEDA), as of 31^st March 2024, the total farming area under the organic certification process has reached 7.3 million hectares.

By Application

Emerging Savory Snacks and Prepared Food Demand to Drive the Product Demand from Industrial Sectors

Based on application, the market has been segmented into household, food service sector, and industrial. The industrial segment is further categorized into bakery products, condiments, dairy products, processed foods and snacks, and others.

The industrial segment holds the largest market share in the global market owing to its wider application in food products such as bakery, condiments, and processed snacks. Onion flavors are not only used as flavor enhancers in the food industry but also as natural fermenting ingredients in dairy and other beverage segments. Adding onion juice or onion oil to milk will offer a unique and appealing flavor profile to the cheese and fermented milk. Emerging demand for fermented dairy beverages in the global space will drive the product demand.

Instant noodles and snacks are two prominent segments of the industrial processed food sector. The emerging popularity of convenience and ready-to-eat food among youths and adults is offering an enormous opportunity for onion flavor companies. According to the World Instant Noodles Association, global instant noodles consumption has accounted for 120.21 billion servings, which increased by nearly 12.96% from 2019 to 2022. Onion flavors are widely used in instant noodles to offer a traditional taste profile. Therefore, the growing food processing industry to drive the onion flavor demand in the upcoming years.

The emerging preference for taste enhancers, flavoring blends, and premixes to mimic restaurant-style taste in home-prepared foods is driving product demand from the household segment.  

ONION AND SHALLOT FLAVOR MARKET REGIONAL OUTLOOK

The market is segmented into North America, Europe, Asia Pacific, South America, and the Middle East & Africa. Asia Pacific holds the largest proportion and accounted for USD 228.63 million in 2024.

Asia Pacific

Asian countries are the leading onion producers, supplying quality raw materials such as fresh and processed onion, including powder, flakes, and chopped, worldwide. According to the Food & Agricultural Organization (FAO), in 2022, India and China hold nearly 28.65% and 22.19% share in global onion production, respectively. According to the India Ministry of Agriculture and Farmers Welfare, onion production in India is estimated to account for 302.08 million tonnes.

International players are establishing their production plants near key onion-producing countries like India and China to achieve more sustainability in production. Expanding production capacity of onion flavors and onion dehydration plants will drive the industry in the upcoming years.

North America

North America has been one of the major markets for onion flavors as consumers’ buying behavior is changing rapidly in the region. Consumption patterns are changing in the region because of associated health benefits. Also, new industries are sprouting up in the U.S. and Canada to offer innovative and unique flavoring food, which is expected to drive the market in upcoming years.

The U.S. is one of the key markets that holds the prominent market share of the North American onion and shallot flavor market. The fast-food chains and food service industry have exhibited rapid growth in the region. The hotel, restaurant, and catering sector (HoReCa) is recognized as a significant consumer of flavors such as onion, garlic, and chili. Full-service establishments and fast-food chains require a regular supply of natural flavor ingredients in curries, soups, sauces, potato fries, burgers, and other snacking items. The increasing food service industry in the U.S. drives the demand for onion and shallot flavors.

Europe

Europe is one of the prominent markets for natural ingredients, food flavors, spices, and food additives. The demand for natural food additives and natural flavoring ingredients from various applications is primarily driven by an increasing demand among consumers for healthier and more sustainable food ingredients instead of artificial ingredients, boosted by stricter European Union (EU) legislation. European countries such as Germany, France, Spain, Italy, the U.K., and the Netherlands are offering natural food flavorings and additives exporters and companies to expand their business operations. Increasing growth in natural food additives & flavoring import will make ingredients prices more stable in the market. Therefore, the industry is anticipated to emerge with a promising growth rate during the foreseeing period.

South America

The demand for onion and shallot flavors is growing rapidly in South American countries. They play an important role in enhancing the taste of food and adding desirable flavors to it. Customers in the region are highly inclined towards savory and exotic food made with natural ingredients. With growing health consciousness, the demand for onion and shallot flavors is increasing to add that extra flavor to the food. Brazil is one of the key importing markets for onion and shallot flavors in powder, flakes, and other forms. The dry onion product import in Brazil has increased  89.02% over the past five years and is valued at USD 23.47 million in 2023.

Middle East & Africa

Over the past few years, the food industry has seen significant growth across Middle Eastern countries such as UAE, Saudi Arabia, and other Gulf countries. Consumers' hectic lifestyle is one of the primary factors that will propel the demand for “on-the-go,” convenient, and ready-to-eat food products in Middle Eastern countries. The change in the demand for food products by consumers and tourists due to globalization and cultural diversification resulted in the food industry becoming more competitive and innovative in the region. Global companies are penetrating the market with their innovative products. This factor will influence market growth in the near future. For instance, in October 2024, The Lorenz Bahlsen Snack-World GmbH & Co KG, a German-based savory snacks manufacturing company, expanded its product offerings to South Africa. The company’s X-Cut Kebab Flavour 130g is available in the country.

COMPETITIVE LANDSCAPE

KEY INDUSTRY PLAYERS

Key Market Players Focus to Expand Product Offerings will Assist to Strengthen their Market Share.

The global onion and shallot flavor market share exhibits a highly fragmented structure with a presence of international and regional players. The leading industry players in the global onion and shallot flavor market, such as Ajinomoto Co., Inc., Symrise, Sensient Technologies Corporation, Azelis Group NV, and T.Hasegawa USA Inc., are actively embarking upon certifications/sustainable business practices followed by adopting next-generation technologies to achieve a long-term competitive advantage. These key players account for nearly 37% of the global onion and shallot flavor market. The key industry players are focusing on receiving product quality, safety standards, and other certifications such as halal and kosher to assure product quality and boost the consumers' trust in brands, which assists the manufacturers in creating a loyal consumer base in the global marketplace. 

Major Players in the Onion and Shallot Flavor Market

LIST OF KEY ONION AND SHALLOT FLAVOR MARKET COMPANIES PROFILED:

• Ajinomoto Co., Inc. (Japan)


• Azelis Group NV (Belgium)


• Boardman Foods, Inc (U.S.)


• Flavor Dynamics, Inc (U.S.)


• Matrix Flavours & Fragrances Sdn Bhd (Malaysia)


• Mevive International Food Ingredients Pvt Ltd (India)


• Sensient Technologies Corporation (U.S.)


• Stringer Flavour. Ltd (U.K.)


• Symrise (Germany)


• T.Hasegawa USA Inc (Japan)

KEY INDUSTRY DEVELOPMENTS:

• October 2024: The Lorenz Bahlsen Snack-World GmbH & Co KG, a German-based savory snacks manufacturing company, expanded its product offerings to South Africa. The company’s X-Cut Kebab Flavour 130g is available in the country. This savory snack offers an innovative taste to the consumer. It is made from potatoes, salt, onion powder, black pepper, garlic powder, and other ingredients.


• May 2024: McCormick & Co., a leading food product manufacturing company, collaborated with Max Greb, a social media personality known as Max The Meat Guy, to launch new Grill Mates spice blends - Max’s All Purpose Seasoning, Max’s Xtra Coarse Seasoning, and Max’s Chimichurri Seasoning. Max’s Xtra Coarse Seasoning is made from onion, garlic, black pepper, and other ingredients.  


• April 2022: The Kraft Heinz Company, one of the leading food companies, launched two dips for burgers, HEINZ DIP & CRUNCH™ and HEINZ Spicy DIP & CRUNCH™. These two dips are manufactured using many ingredients, including onion powder, garlic powder, and spices.


• October 2021: Olam Food Ingredients (OFI), one of the leading global companies in natural and sustainable ingredients and solutions, signed a strategic partnership agreement with  Agri-Neo Inc., one of the popular pasteurization technology companies, to provide organically pasteurized dried onions.


• October 2020: Haldirams Group, The Africa Agriculture and Trade Investment Fund, and The International Finance Corporation invested nearly USD 14.82 million to assist Société Africaine d’Ingrédients (SAF Ingrédients) in building an onion dehydration plant in Senegal. The new plant is anticipated to produce nearly 5,000 tones of dehydrated onions to meet the demand for dry onion powder from European food producers, and it is used as a popular flavoring ingredient in soups, stews, and many other dishes.

INVESTMENT ANALYSIS AND OPPORTUNITIES:

The ongoing industry scholar studies will assist flavoring companies and end-use product manufacturers in adopting new technologies to enhance their product quality and usage. Therefore, involvement in research and development in the industry will positively influence the industry's growth in the near future. In March 2024, a group of research scholars led by Sobirova Mohichehra and Mohamed Rifky published a research study on technology development to incorporate Onion oil as a functional ingredient in cheese spread. The research study concluded that the usage of onion oil as a functional ingredient in producing cheese spread would enhance the taste, sensory attributes, shelf life, and product quality.

Additionally, international players are inclined to develop their production facilities near production areas such as China and India. It will impact their business operations in the near future. Such investment in production plant opening will further drive the industry growth. For instance, in December 2021, Nedspice Group, a Netherland-based Company, opened its new production plant in Gujarat, India. The new factory can produce 4,000 tonnes of dehydrated onions, with the possibility of expanding to 12,000 tonnes per year.

REPORT COVERAGE

The global onion and shallot flavor market report includes quantitative and qualitative insights into the market using different research methodologies. This global onion and shallot flavor market growth forecast also offers a detailed regional analysis, market analysis, market trends, market dynamics, regional market forecast, global onion and shallot flavor market analysis, forecast, and the market rate for all possible market segments. This market analysis report provides various key insights on the market, an overview of related markets, the competitive landscape, the forecast period, recent industry developments, such as mergers & acquisitions, the regulatory scenario in critical countries, and key industry trends.

Report Scope & Segmentation

ATTRIBUTE	DETAILS
Study Period	2019-2032
Base Year	2023
Estimated Year	2024
Forecast Period	2024-2032
Historical Period	2019-2022
Growth Rate	CAGR of 5.55% from 2024 to 2032
Unit	Value (USD Million)
Segmentation	By Source Onion Shallot By Profile Type Boiled Fried Dehydrated Others By Form Liquid Dry By Category Organic Conventional By Application Household Food Service Sector Industrial Bakery Products Condiments Liquid seasoning Others Dairy Products Processed Food and Snacks Instant Noodle Flavor Blends Snacks Ready to Eat Meals Others By Region North America (By Source, Profile Type, Form, Category, Application, and By Country) U.S. Canada  Mexico Europe (By Source, Profile Type, Form, Category, Application and Country) U.K. Germany France Spain Italy Rest of Europe   Asia Pacific (By Source, Profile Type, Form, Category, Application, and Country) China Malaysia Indonesia Thailand Philippines Vietnam India Sri Lanka Japan South Korea Rest of Asia Pacific South America (By Source, Profile Type, Form, Category, Application and Country) Brazil Argentina Rest of South America   Middle East & Africa (By Source, Profile Type, Form, Category, Application and Country) South Africa UAE Turkey Rest of the Middle East & Africa