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The fragrance ingredients market is estimated to increase by USD 3.82 billion and grow at a CAGR of 4.6% between 2023 and 2028. The market's growth is driven by several key factors, including rising consumer interest in cosmetic products, growing demand for detergents, and the adoption of advanced technologies. However, it encounters challenges such as limited product shelf life, concerns over adverse effects associated with fragrance components, and the upward trend in raw material costs. These factors collectively shape the market dynamics, influencing consumer choices and industry strategies. Companies must navigate these hurdles by innovating with longer-lasting formulations, addressing fragrance sensitivity issues through safer alternatives, and optimizing supply chain efficiencies to mitigate the impact of rising material expenses. Despite these challenges, the market continues to expand, propelled by ongoing innovation and evolving consumer preferences for effective and sustainable products.
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The market share growth by the personal care segment will be significant during the forecast period. The personal care segment is currently experiencing significant growth because of the rapid rise of the e-retail industry. With advances in technology, many customers are opting to purchase personal care products online.
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The personal care segment showed a gradual increase in the market share of USD 4.59 billion in 2018. The demand for personal care products is growing due to the gradually increasing awareness about their benefits. It is further fueled by the rising frequency of skin and other hygiene issues among the population. However, the number of salons and spas is increasing globally, owing to the rising focus of people on beauty and personal hygiene. Products that fall under this segment include anti-aging skin care products, moisturizers, skin brightening products, wrinkle removers, and others. Consumers demand decent-quality and value-added skincare products at affordable prices. Multifunctional skincare products experience high demand as their functions for the facial skin and body are different. The consciousness of skin health has also increased the use of natural and organic skincare products. Growing disposable income, rise in middle-class population, growing urbanization, and heavy advertisements and promotions are some of the other factors influencing the segment growth leading to the growth of the market in focus during the forecast period.
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North America is estimated to contribute 38% to the growth of the global market during the forecast period. Technavio’s analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period. North America is expected to be the largest segment of the global market during the forecast period. Factors such as the presence of key vendors, growing demand for fragrances in personal care industries, new product launches, and rising disposable income of people in the region are expected to drive the growth of the market in the region.
Moreover, the presence of many vendors in the US is a major factor in the country's significant contribution to market growth. Additionally, many vendors are making substantial investments in the market in North America, intending to design, develop, and launch new products that are safer and more effective. For instance, in July 2021, Quiet and Roar, a brand-new multi-sensorial body care brand from P&G, introduced its product line comprising body washes, scrubs, and lotions made with premium fragrances. Thus, the wide presence of personal care product vendors will increase the application of a variety of perfumes, which will propel the regional market during the forecast period.
The fragrance ingredients industry encompasses a diverse array of compounds, from synthetic compounds to organic fragrances derived from fruit, flowers, and trees. These organic compounds contribute distinct odors utilized in products ranging from incense sticks to fine fragrance items and candles. However, concerns persist regarding potential toxic effects on human skin, prompting ongoing research into safer alternatives. The industry caters to various sectors including laundry, toiletries, and households, where fragrances play crucial roles in enhancing product appeal. Innovations focus on balancing consumer preferences for natural scents with regulatory requirements for safety and sustainability. As demand grows, manufacturers face challenges in sourcing cost-effective organic fragrances while maintaining product efficacy and compliance. This dynamic sector underscores the intersection of science, nature, and consumer expectations, driving continuous evolution in fragrance formulation and application across global markets.
Growing demand for detergents is the key factor driving the growth of the market. The demand for detergent, which includes soap, washing powder, and synthetic detergent, is growing at a higher pace. The demand for soap and detergent is high owing to the high awareness about hygiene around the world, and thus, vendors have been launching new products that will propel the market in focus during the forecast period. In June 2021, Unilevers Surf Excel launched the Surf Excel 3 in 1 Smart Shots, which is a single-use soluble liquid detergent capsule with a unique three-chamber design.
Moreover, it is designed for fully automatic front and top-load washing machines. In March 2021, P&G announced the expansion of Ariel. It is the company's 2030 brand ambition to focus on decarbonizing laundry at every step, including design, manufacturing, and distribution to consumer use and end-of-life, all while maintaining superior cleaning performance. In addition, the increasing demand for bio-based detergents and eco-friendly surfactants will be another major driver for the growth in the global fragrance ingredients market during the forecast period.
The growing preference for natural ingredients is a major trend in the market. The demand for natural fragrance ingredients that are derived from plants, animals, or fruits is quite high as compared to synthetic aroma chemicals. This can be attributed to the growing consciousness of the harmful effects of such chemicals on the skin.
Furthermore, the ingredients used in deodorants, hair oils, perfumes, and detergents, when used or applied directly on the skin, cause skin irritations. For instance, in April 2021, Givaudan introduced its Blossom Lab, a fully equipped mobile laboratory that allows innovation of natural extraction techniques and the crafting of new qualities of perfumery ingredients directly in the field from plants. The Blossom Lab is designed from repurposed shipping containers in Grasse, France, and will be able to travel by truck or boat to immersive research sites around the world. Therefore, the demand for natural ingredients is expected to grow over synthetic chemicals. This will have a positive impact on the global market during the forecast period.
The low shelf life is a major challenge impeding the market growth. Essential oils are classified into top, middle, and base notes. Top notes such as lemon, bergamot, cajuput, caraway, citronella, cumin, eucalyptus, grapefruit, lemongrass, lime, mandarin, niaouli, and orange essential oils are classified as highly volatile substances and can evaporate easily. Base notes such as benzoin, cedarwood, cinnamon leaf, clove, myrrh, patchouli, rockrose (ciste/labdanum), sandalwood, and vetiver essential oils are less volatile as compared to the top notes. Citrus oils, which include lemon, orange, and lime, have been the most preferred essential oils over the past decade.
However, characteristics such as high volatility affect the shelf life of essential oils. Therefore, the lower shelf life of essential oils will affect the demand for essential oils, negatively affecting the growth of the market in focus during the forecast period.
The report includes the adoption lifecycle of the market, covering from the innovator’s stage to the laggard’s stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their growth strategies.
Global Market Customer Landscape
Market players are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.
Huabao International Holdings Ltd. - The company's key offerings include fragrance ingredients.
The report also includes detailed analyses of the competitive landscape of the market and information about 15 market players, including:
Qualitative and quantitative analysis of vendors has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize vendors as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize vendors as dominant, leading, strong, tentative, and weak.
The market research report provides comprehensive data (region wise segment analysis), with forecasts and estimates in "USD Billion" for the period 2024 to 2028, as well as historical data from 2018 to 2022 for the following segments.
Fragrances Market: Fragrances Market in Middle East by Distribution Channel and Geography - Forecast and Analysis
Flavors and Fragrances Market: Flavors and Fragrances Market Analysis APAC, North America, Europe, South America, Middle East and Africa - US, China, Japan, Germany, Italy - Size and Forecast
Fragrance and Perfume Market: Fragrance and Perfume Market Analysis Europe, North America, APAC, Middle East and Africa, South America - US, China, France, UK, Germany - Size and Forecast
The fragrance industry is a complex landscape encompassing a diverse range of products, from aromatic products to herbal fragrances sourced from flower, tree, and spice extracts. While synthetic ingredients have traditionally dominated, there is a growing demand for eco-friendly fragrance ingredients derived from renewable sources and bio-based materials. These natural ingredients cater to the rising preference for eco-friendly products in beauty and personal care products, cosmetics, and household cleaning supplies like shampoo and shower gel. However, concerns persist over potential toxic effects associated with certain chemical ingredients, prompting shifts towards safer alternatives in aromatherapy and therapeutic applications. From air fresheners to room fresheners, the industry addresses diverse consumer needs while considering factors like allergies, lung irritation, and dermatitis. Innovations in fragrance extraction techniques and perfume customization aim to meet individual preferences for signature scents while promoting sustainability and cleanliness in indoor environments.
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Market Scope |
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Report Coverage |
Details |
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Page number |
171 |
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Base year |
2023 |
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Historic period |
2018 - 2022 |
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Forecast period |
2024-2028 |
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Growth momentum & CAGR |
Accelerate at a CAGR of 4.6% |
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Market growth 2024-2028 |
USD 3.82 billion |
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Market structure |
USD Fragmented |
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YoY growth 2023-2024(%) |
4.32 |
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Regional analysis |
North America, Europe, APAC, South America, and Middle East and Africa |
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Performing market contribution |
North America at 38% |
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Key countries |
Germany, US, UK, Canada, and China |
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Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
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Key companies profiled |
AARAV Flavors and Fragrances Pvt. Ltd., Alpha Aromatics Inc., BASF SE, BRENNTAG SE, CPL Aromas, Ernesto Ventos SA, Fine Fragrances, Firmenich SA, Givaudan SA, Huabao International Holdings Ltd., International Flavors and Fragrances Inc., Joh. Vogele KG., Kalpsutra Chemicals Pvt. Ltd., La Scenteur Fragrance Technology Pvt. Ltd., Risdon International, Robertet SA, S H Kelkar and Co. Ltd., Sensient Technologies Corp., Symrise AG, Takasago International Corp., and V. Mane Fils |
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Market dynamics |
Parent market analysis, Market forecasting growth inducers and obstacles, Fast-growing and slow-growing segment analysis, Market growth and Forecasting, COVID-19 impact and recovery analysis and future consumer dynamics, Market condition analysis for the forecast period |
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Customization purview |
If our market report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
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1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by Application
7 Market Segmentation by Type
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Opportunity/Restraints
11 Competitive Landscape
12 Competitive Analysis
13 Appendix
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