Encapsulated Flavors and Fragrances Market

2021 Analysis and Review: Encapsulated Flavors and Fragrances Market by Technology - Mechanical and Chemical for 2021 – 2031

Encapsulated Flavors and Fragrances Market Snapshot

The encapsulated flavors and fragrances market worth will total US$ 6.3 billion in 2021, according to Future Market Insights (FMI). Growing at a healthy CAGR of 5.9% for 2021-31, the market is expected to reach US$ 11.2 billion by 2031.

Encapsulated flavor and fragrances sales outlook remain positive as the demand is expected to soar in the pharmaceutical sector. Owing to their superior efficacy and functionality, micro-encapsulation process will be highly sought-after, accounting for more than 25% of the market by the end of 2021.

Key Points Covered in Encapsulated Flavors and Fragrances Market Study

  • Market estimates and forecast 2016-2031
  • Key drivers and restraints impacting market growth
  • Segment-wise, Country-wise, and Region-wise Analysis
  • Competition Mapping and Benchmarking
  • Brand share and Market Share Analysis
  • Key Product Innovations and Regulatory Climate
  • COVID-19 Impact on Encapsulated Flavors and Fragrances Market and How to Navigate
  • Recommendation on Key Winning Strategies

2016-2020 Encapsulated Flavors and Fragrances Market Outlook in Comparison to 2021-2031 Growth Forecast

The encapsulated flavors and fragrances market grew at a CAGR of 4.5% between 2016 and 2020. Growth forecasts remain optimistic, with the market predicted to exhibit a CAGR of 5.9% between 2021 and 2031. 

The market has gained popularity in recent years due to the growing demand for natural and authentic flavors and fragrances in a variety of end-use applications such as laundry detergents, household care, and the food and beverage industry which includes instant desserts (frozen food), and beverages.

Flavoring agents are added to a variety of foods and beverages.  As per FMI analysis, healthy growth in beverage flavoring market is expected over the coming decade. Beverage flavoring sales will rise in response to the surging packaged and sports & energy drinks demand, so will the sales of encapsulated flavors and fragrances.

A primary driver of the market is consumer demand for original flavored products. Developed countries, such as the U.S., the U.K., and Germany, are strengthening their technology and research and development (R&D) facilities in the food and flavour encapsulation industry, making it easier for manufacturers to adopt.

Today's health-conscious customer is curious about ingredients used in food items and food safety regulations. Compliance with end-product quality and regulatory standards is a major impediment to market growth for industry players. Food processing businesses in developed and developing countries have experienced significant expansion.

Is the Increasing Demand for Combined Flavors Beneficial for Market Growth?

Combination flavors are becoming increasingly popular. These offerings blend two or more flavors into a single product. Unique blends or innovative combinations, such as raspberry floral and ginger flower, are becoming increasingly popular among consumers.

The confectionery segment of the food industry is witnessing a rise in the use of floral flavors like rose and lavender, in addition to fruit flavors like cherry and strawberry.

In terms of market share, the contribution of beverages to the overall food market is increasing steadily. This is attributed to new product offerings catering to specialized products including energy drinks, sports nutrition, naturally sweetened water, and juices.

Hence, flavor encapsulation with blended options in beverages is gaining traction among manufacturers. This is expected to drive demand in the near future.

Evaluate the Demand for Encapsulated Flavors in the Pharmaceutical Industry?

The demand for encapsulated flavors is growing tremendously in the pharmaceutical industry, particularly due to application in products such as syrups, ORS, and more. The pharmaceutical industry prefers encapsulated flavors as these products are non-reactant.

Spray drying is one of the most commonly used pharmaceutical technologies in the world. Insta Foods is offering dry encapsulated cola flavour for use in antacid powders and dry syrups. The company is also offering encapsulated flavors for Apollo Pharmacy in India.

How is the Growing Demand for Natural and Authentic Flavors Enhancing Growth?

The demand for natural flavor extract and organic fragrances is expected to rise in the near future. Steered by changing consumer behavior, focus on ingredients derived from natural sources will consistently rise.

As food processors promote these products in terms of safety, quality, and authenticity, the removal of additives/preservatives remains a top trend within these product categories.

The demand for fragrant items has been increasing over the last decade, and is expected to create diverse opportunities in the near future. Air fresheners, decorative cosmetics, deodorants, bath additives, perfumes, candles, antiperspirants, soaps, and hair-care, household, oral hygiene, personal-care, shaving, skin-care, and laundry items will drive the demand for encapsulated flavors and fragrances for the foreseeable future.

Country-wise Insights

How is the Encapsulated Flavors and Fragrances Market Faring in the U.S.?

North America is one of the more lucrative markets for encapsulated flavors and fragrances. According to FMI, the U.S. is anticipated to account for over 88.2% of the North America market in 2031.

Consumers in the U.S. are inclined towards multi-ingredient and flavor products, considering that the demand for functional food products is increasing at a rapid pace. This is attributable to increasing consumer awareness and rising spending on food and beverages.

How is the Demand for Encapsulated Consumer Goods Affecting Growth in Germany?

The rising demand for encapsulated consumer goods in Germany will act as a major growth driver. According to the report, the Germany encapsulated flavors and fragrances market is expected to be valued at US$ 473.9 Mn in year 2021.

Europe is estimated to be the dominant market for encapsulated flavors and fragrances in which Germany is projected to hold the largest share. The rising demand specifically for consumer goods, food & beverages, and the pharmaceutical industry is creating a conducive environment for market players to increase sales in Germany.

What are the Growth Prospects for Encapsulated Flavors and Fragrances in Japan?

Japan is one of the leading technology-driven countries in the world. By 2031, it is expected to account for more than 27.5% of encapsulated flavors and fragrances consumption within East Asia.

Healthy beverages are in high demand in Japan. Incorporated with encapsulated flavors with functional ingredients to improve consumer experience. Additionally, the demand for encapsulated consumer goods with enhanced shelf life including laundry detergents, household care, and more is catering to global demand.

What are the Factors Driving Encapsulated Flavors and Fragrances Sales in China?

China is expected to account for more than 58.7% of the East Asia market in 2021, according to the FMI study. Functional food products are becoming popular among customers of all ages across the country.

Demand for functional food products in China is being driven by factors such as demanding schedules, greater disposable incomes, and higher awareness about healthy dietary requirements.

Encapsulation is a good strategy for controlling the release of flavors. Consequently, corporations in the country are investing heavily in this technology. As a result, authentic, new products with natural taste in addition to colorants, vitamins, and phytochemicals, will generate demand.

Why is the Demand for Encapsulated Flavors and Fragrances Rising in India?

In 2021, India is expected to command a market share of more than 45.1% in South Asia. Over the forecast period, India is expected to develop at a CAGR of 6.8%. Since India is a price-sensitive market, it is quite difficult for companies to penetrate the market.

As the price of encapsulated flavors and fragrance is high as compared to free flavors and fragrances, it will be difficult for encapsulated flavors manufacturers to increase the consumption of encapsulated flavors in the country.

There is an excellent opportunity for new and existing producers of encapsulated flavors to penetrate the Indian market by reducing the prices of their products.

Category-wise Insights

Which Product Type Holds the Maximum Share?

Owing to increased demand of flavors from food and beverage manufacturers, flavour blends of encapsulated flavors and fragrances are the most in-demand product type holding a dominant share of nearly 56.9% in 2021.

Which technology is Most Preferred for Encapsulated Flavors and Fragrances Production?

Mechanical production technology is highly preferred, holding a dominant share of more than 78.3% in 2021, growing at a CAGR of 5.7% over the forecast period. Within mechanical technology for production, the demand for spray drying will remain considerably high. It is also expected to account for leading share within the mechanical segment in 2021.

Which is the Most Commonly Used Wall Material in Encapsulated Products?

Maltodextrin (DE<20) is the most preferred wall material used in encapsulated flavors and fragrances, which accounts for more than 22.5% of the global market in 2021, followed by modified starch which accounts for 13.8% market share in 2021.

Who is the Leading Encapsulated Flavors and Fragrances End User?

Food and beverage production accounted for a maximum share of nearly 68.2% in the global encapsulated flavors and fragrances market. Beverages such as instant drinks and tea under the food and beverage segment is estimated to holds a maximum share of 30.4% in 2031.

Which Encapsulated Form Holds is Highly Soyught-after?

Powdered products account for the maximum share of 60.2% in 2021 and is estimated to hold 57.2% of the market share by 2031. Powder being convenient to use is the most preferred form for consumers. Additionally, natural flavour blends are primarily found in powdered encapsulated forms, manufactured using spray-drying technology.

Which Process is Widely Accepted by Encapsulated Flavour and Fragrance Manufacturers?

Micro-encapsulation holds 72.9% of the market share, and it is the most preferred process for the production of encapsulated flavors and fragrances through the end of the assessment period.

Microencapsulation technology is generally adopted by leading manufacturers since it is an excellent technique of minimizing oxidation, heating, and volatilization if not encapsulated.

Competitive Landscape

Manufacturers in the global encapsulated flavors and fragrances market are focusing on improving their digital presence to reach increasing number of consumers. They also are investing in R&D, seeking cost-effective techniques.

  • For instance, PepsiCo Inc. is seeking patent encapsulation of aromas within its beverages product line, catering to demand from the rising beverages industry.
  • Keva’s pharmaceutical flavors are available in liquid, dry mix and encapsulated form, apt for a variety of formulations such as chewable tablets, syrups, suspensions, supplements, drops and other medicines.
  • LeadX has unveiled a new encapsulation coating, aimed for construction materials used in the renovation of historical buildings.

Scope of Report

Attribute

Details

Forecast Period

2021-2031

Historical Data Available for

2016-2020

Market Analysis

USD Million for Value

Key Countries Covered

US, Canada, Germany, U.K., France, Italy, Spain, Russia, China, Japan, South Korea, India, Thailand, Malaysia, Indonesia, Australia, New Zealand, GCC Countries, Turkey, Northern Africa, and South Africa

Key Segments Covered

Product Type, Technology, Wall Materials, End-Use,   Encapsulated Form, Process and Region

Key Companies Profiled

  • Cargill Inc
  • Firmenich Incorporated
  • Givaudan
  • Ingredion Incorporated
  • International Flavors and Fragrances (IFF)
  • Kerry Group
  • Royal DSM
  • Sensient Technologies
  • Symrise AG
  • Tate & Lyle PLC
  • Others

Report Coverage

Market Forecast, Company Share Analysis, Competition Intelligence, DROT Analysis, Market Dynamics and Challenges, and Strategic Growth Initiatives

Customization & Pricing

Available upon Request

Key Questions Answered in the Report

  • What is encapsulated flavors and fragrances market size?

    The overall encapsulated flavors and fragrances market is projected to surpass US$ 6.3 Bn in 2021.

  • At what rate did the encapsulated flavors and fragrances market grow in the last five years?

    Demand in the encapsulated flavors and fragrances market increased at 4.5% CAGR between 2016 and 2020.

  • What are the key trends shaping the encapsulated flavors and fragrances market?

    Market players are likely to focus on nano-encapsulation technologies. Cost-effective mechanical encapsulation solutions will remain important in the market.

  • What is the share of the leading encapsulated flavors and fragrances companies?

    Leading encapsulated flavors and fragrances companies include Givaudan, Firmenich Incorporated, International Flavors and Fragrances (IFF), Sensient Technologies, Cargill Inc, and Royal DSM, who cumulatively account for 40 to 50% of the market.

  • What is the North America encapsulated flavors and fragrances market outlook?

    North America is a major encapsulated flavors and fragrances market and will reflect a 4.2% CAGR, holding over 20% of the market through the end of the forecast period.

  • Which countries are key producers of encapsulated flavors and fragrances?

    The U.S., Germany, U.K., France, and Switzerland are the leading producers of encapsulated flavors and fragrances products.

  • At what rate will the demand rise in the Europe encapsulated flavors and fragrances market?

    The Europe encapsulated flavors and fragrances market is expected to rise at a CAGR of 3.4% between 2021 and 2031.

  • Which are the top five countries driving encapsulated flavors and fragrances market demand?

    Leading countries driving demand in the encapsulated flavors and fragrances market are the U.S., China, Germany, France, and the U.K.

  • What are the key statistics for encapsulated flavors and fragrances market in Japan and South Korea?

    Encapsulated flavors and fragrances solutions in Japan and South Korea are expected to hold a 5.2% and 8% CAGR through 2031, respectively.

Encapsulated Flavors and Fragrances Market by Category

By Product Type:

  • Flavour Blends
  • Fragrance Blends
  • Essential Oils & Natural Extracts
  • Aroma Chemicals

By Technology:

  • Mechanical
    • Emulsification
    • Spray Drying
    • Spray-Chilling/Cooling
    • Fluidised-Bed Coating
    • Centrifugal Extrusion
  • Others
    • Chemical
    • Coacervation
    • Freeze Drying
    • Supercritical Fluid Technique
    • Nano Precipitation
    • Liposomes
  • Others

By Wall Material

  • Maltodextrin (DE<20)
  • Corn syrup solid (DE>20)
  • Modified cellulose
  • Gum Arabic
  • Modified starch
  • Gelatin
  • Cyclodextrin
  • Lecithin
  • Whey protein
  • Hydrogenated fat
  • Others

By End-use:

  • Consumer Goods
    • Laundry detergents
    • Fabric softeners and scent boosters
    • Household Care
    • Deodorants
    • Oral Care
    • Skin Cleansing & Care
    • Hair Care (shampoo & conditioner)
  • Food and Beverage
    • Chewing gum
    • Baked Foods
    • Confectionery
    • Dairy Products
    • Instant Desserts (Frozen Food)
    • Food Flavors (Snack Food, Cereal, Oatmeal, etc.)
    • Beverage & Instant Drinks & Tea
    • Others (Prepared Dishes, etc.)

By Encapsulated Form:

  • Powder
  • Paste
  • Granules

By Process:

  • Micro-encapsulation
  • Nano-encapsulation
  • Hybrid-encapsulation
  • Macro-encapsulation

By Region:

  • North America
  • Latin America
  • Europe
  • East Asia
  • South Asia
  • Oceania
  • The Middle East and Africa (MEA)

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