The food flavors market is estimated at USD 13.56 billion in 2018 and is projected to reach USD 17.10 billion by 2023, at a CAGR of 4.8% during the forecast period. This market is driven by factors such as the increased demand for beverages, confectionery, bakery products, and processed food.
Companies are investing in innovation and technology to strengthen the product portfolio. For instance, Sensient (US) inaugurated the Singapore Innovation Centre for Flavors, Fragrance, Colors and Specialty Ingredients. Also, Symrise (Germany) launched an innovation and technology center in Singapore for the Asia Pacific region. This center will promote regional and local food manufacturing abilities.
Based on application, the beverages segment is projected to grow at a higher CAGR than the food segment, from 2018 to 2023. The beverage industry is growing rapidly, and the demand for beverages is driven by varied consumer tastes and preferences such as dietary drinks. A few commonly used flavors in beverages are citric acid, high fructose corn syrup (HFCS), malic acid, phosphoric acid, and sucralose.
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Based on type, the market for fruits & nuts is projected to grow at the highest CAGR during the forecast period. Fruit flavors are widely used in beverages, confectionery products, bakery products, dairy products, pharmaceuticals, and nutraceuticals. Nuts are important sources of vitamins, minerals, and fibers. Fruit and nut flavors are popular, as they offer various health benefits.
On the basis of form, the liquid segment is projected to grow at a higher CAGR during the study period. Food flavors in the liquid form are largely opted by food manufacturers, owing to their convenience in usage and lower cost.
Based on the origin of food flavors, the natural flavors segment is projected to grow at a higher CAGR during the forecast period. Natural flavors are derived from natural sources such as plants, fruits, spices, vegetables, and dairy products. Demand for natural flavors is increasing due to the growth in consumer awareness for clean label products, health hazards associated with synthetic flavors, and the health benefits imparted by some natural food flavors.
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The South American region is projected to be the fastest-growing market for food flavors at the highest CAGR 2018 to 2023. Key markets in South America include Brazil and Argentina. The demand for food flavors is increasing in the emerging economies of South America due to the growth of the processed food industry. Localizing operations can help in reducing costs and improving access to local distribution networks, thereby optimizing profit margins.