Aroma Ingredients Market

Sravanthi Rudroju

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The Aroma Ingredients market size is estimated to reach US$6.8 billion by 2027 and is forecasted to grow at a CAGR of 5.3% during the forecast period of 2022-2027.

Aroma Ingredients Market

The Aroma Ingredients market size is estimated to reach US$6.8 billion by 2027 and is forecasted to grow at a CAGR of 5.3% during the forecast period of 2022-2027. Aroma Ingredients are natural or synthetic-based chemicals such as beta ionone, methylheptenone, dihydrolinalool and linalyl acetate that are used to incorporate desired fragrance in products. Their ability to enhance the scent and fragrance is creating a drive in their market demand in major end-use sectors such as cosmetics & personal care and the cleaning industry. Factors such as increase in demand for home care products and new product launches related to cosmetics & personal care are driving the growth of the aroma ingredients industry. However, the stringent regulation imposed by the government on the usage of chemicals in cosmetics and homecare products is anticipated to pose a challenge in the growth of the aroma ingredients industry, thereby negatively impacting the aroma ingredients market size. The COVID-19 decreased the sales and demand in the cosmetics & personal care sector which accounted for a major share of the aroma ingredients industry, thereby decreasing industry’s market revenue and negatively impacting the aroma ingredients industry outlook.

Aroma Ingredients Report Coverage

The “Aroma Ingredients Market Report – Forecast (2022 – 2027)” by IndustryARC, covers an in-depth analysis of the following segments in the Aroma Ingredients Industry.

By Type – Natural (Plants, Flowers, Woods and Others) and Synthetic (Linalyl Acetate, Methylheptenone, Beta Ionone, Dihydrolinalool and Others)
By Application – Creams & Lotions, Shampoos, Soaps, Deodorants, Air Fresheners, Detergents, Hand Sanitizer, Fabric Softener and Others
By End-Use Industry – Cosmetics & Personal Care, Cleaning Industry and Others
By Geography - North America (the USA, Canada and Mexico), Europe (UK, Germany, France, Italy, Netherlands, Spain, Belgium and the Rest of Europe), Asia-Pacific (China, India, Japan, South Korea, Australia, New Zealand, Indonesia, Taiwan, Malaysia and Rest of APAC), South America (Brazil, Argentina, Colombia, Chile and Rest of South America) and Rest of the World (the Middle East and Africa)

Key Takeaways

Asia-Pacific dominates the aroma ingredients industry on account of the growing consumption of skincare cosmetics and home care products like detergents in the region which is influencing the demand for aroma ingredients.
New product launches in cosmetics and growing awareness regarding personal care will create more demand for aroma ingredients in products such as creams, lotions and deodorants thereby positively impacting the aroma ingredients industry outlook.
Stringent regulations imposed on chemical usage in cosmetics and home care products such as detergents can negatively affect aroma ingredients market share during the forecast period.

Figure: Asia-Pacific Aroma Ingredients Market Revenue, 2021-2027 (US$ Million)

Aroma Ingredients Market Revenue

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Aroma Ingredients Market Segment Analysis – By Type

The natural ingredient type held the largest share in the Aroma Ingredients market share in 2021 and is forecasted to grow at a CAGR of 5.6% during the forecast period 2022-2027. Natural aroma ingredients unlike synthetic ingredients such as beta ionone, methylheptenone, dihydrolinalool and linalyl acetate that are produced in laboratories, cause less irritation or allergies. Consumers have shifted their preferences toward natural & bio-based products especially in the cosmetics & personal care sector due to growing awareness about the harmful effects of the usage of chemicals. Thus, owing to advantageous features of natural ingredients over synthetic coupled with the growing consumer shift towards natural products is contributing to the segment growth of natural aroma ingredients during the forecast period.

Aroma Ingredients Market Segment Analysis – By End-Use Industry

The cosmetics & personal care sector held the largest share in the Aroma Ingredients market share in 2021 and is forecasted to grow at a CAGR of 5.9% during the forecast period of 2022-2027. The high applicability of aroma ingredients in cosmetics & personal care products such as creams, lotions and deodorants are driving their demand in the sector. The increase in disposable income and rapid urbanization have increased the consumption of self-care products, especially skincare. For instance, according to the quarterly reports of Proctor & Gamble, in Q4 of 2021, the skin care product sales of the company increased by 11% in comparison with 2020 sales figures for the same quarter. Furthermore, according to statements given by skincare giant Shiseido, in 2021, the sales of the company’s skincare products increased by 12.4% in comparison to the previous year. The increase in the sale of skincare care products such as creams & lotions has accelerated aroma ingredients use in the cosmetics & personal sector, thereby driving the market growth in the cosmetics & personal care sector during the forecast period.

Aroma Ingredients Market Segment Analysis – By Geography

The Asia-Pacific held the largest share in the Aroma Ingredients market share in 2021 up to 44%. Consumption of beauty care and home care products has increased in the region due to growing awareness of cleanliness, hygiene and self-care. For instance, according to the annual report of Unilever, in 2021, Asia-Pacific held a 46% share in the company’s revenue owing to the high consumption of beauty care and home care products in the region. Furthermore, according to the annual report of Shiseido, in 2021, Japan with 26.7% and China with 26.6% held the maximum share in net sales of the company’s overall cosmetics sales for the year. The growing consumption of beauty care and home care products in Asian-Pacific countries such as India, China, Japan and others is driving the market demand for aroma ingredients in the Asia-Pacific region, thereby leading to positive market growth.

Aroma Ingredients Market Drivers

New Product Launches in Cosmetics & Personal Care Sector

The improvement in living standards and growing consumer awareness regarding cleanliness have made cosmetics-making companies come up with a new range of products that could cater to the needs of the consumers. For instance, according to the statements of Quench Botanic, the company in May 2022, has launched four new skincare products featuring Birch juice as the main ingredient. Also, sun-care brand Dune, in June 2022, launched its facial sunscreen product Mug Guard which improves looks of face lines and face discoloration. Furthermore, according to the statements of Olay, in April 2020, the company launched three new body-washing products featuring the vitamin B3 complex. Such product launches will create an effective usage of aroma ingredients in the cosmetics & personal sector for developing fragrances resulting in a boost in the demand for the aroma ingredients during the forecast period.

Increase in Demand for Homecare Products

The growing consumer awareness to maintain hygiene not only at personal levels but also at home has increased the demand for homecare products resulting an increase in their consumption. For instance, according to the quarterly report of Henkel Ag & Co. Kgaa, in Q1 of 2021, the company’s laundry detergent sales increased by 4% in comparison to Q1 of 2020. Also, according to the quarterly report of Procter & Gamble, in Q1 of 2021, the company’s home care sales increased by 14% in comparison to Q1 of the previous year. Furthermore, according to consolidated annual report of Kao Corporation, in 2020, company’s home care sales showed increase of 11-13% in Japan and Asia in comparison to 2019 sales figures. The growing consumption of homecare products will accelerate the demand and usage of aroma ingredients for enhancing scent and fragrances in the products, resulting in a positive growth of the aroma ingredients industry during the forecast period.

Aroma Ingredients Market Challenge

Stringent Regulation on Chemical Usage

Synthetic aromatic ingredients such as methylheptenone, dihydrolinalool and linalyl acetate though have complex aromas and are used in cosmetic and home care products to imitate the fragrance of natural ingredients, however, such ingredients can cause skin acne and other skin conditions. To prevent negative skin effects certain regulations have been imposed by government organizations. For instance, the Australian Government’s National Industrial Chemicals Notification and Assessment Scheme limit chemical usage in cosmetics. Also, the EU’s Detergents Regulation limits chemicals usage in detergents in the EU. Such regulations can hamper synthetic ingredients usage in cosmetics & personal care and home care products which are anticipated to pose a challenge in the growth of the aroma ingredients industry, thereby negatively affecting the aroma ingredients market size.

Aroma Ingredients Industry Outlook

Technology launches, acquisitions and R&D activities are key strategies adopted by players in the Aroma Ingredients market. The top 10 companies in Aroma Ingredients Market are:

1. BASF SE
2. DSM
3. International Flavours & Fragrances Inc
4. Kao Chemicals
5. Solvay
6. Takasago International Cooperation
7. Keva
8. Symrise
9. Givaudan
10. Eternis Fine Chemicals Ltd

Recent Developments

In June 2022, BASF Aroma Ingredients launched Virtual Aroma Assistants which is a digital platform to simplify BASF’s aroma ingredients portfolio for customers from the flavor & fragrance industry.
In March 2021, DSM acquired the flavor & fragrance bio-based intermediates business of Amyris Inc. and such acquisition will extend DSM’s product portfolio in aroma ingredients.
In February 2021, Eternis Fine Chemicals Ltd acquired UK-based Tennants Fine Chemicals and the acquisition will enable the company to expand its range of aroma chemicals in multiple locations.