I. Industry overview
Fragrance refers to a variety of natural spices and synthetic spices as the main raw materials, and with other auxiliary materials according to a reasonable formula and process to prepare a certain flavor of the complex mixture, mainly used in all kinds of flavor products. Flavor is a general term for flavoring substances extracted or obtained by artificial synthetic methods, and is an important part of fine chemicals. Flavor is a special product closely related to human social life, known as “industrial monosodium glutamate”, its products are widely used in food industry, daily chemical industry, pharmaceutical industry, tobacco industry, textile industry, leather industry and other industries.
In recent years, many policies have put forward higher requirements for the management of the flavor and fragrance industry, safety, environmental governance, and food diversification. In terms of safety, the policy proposes to “promote the construction of a modern food safety governance system”, and vigorously develop natural flavor technology and processing; In terms of environmental governance, the policy emphasizes the need to achieve “green low-carbon, ecological civilization”, and promote the standardized and safe development of the flavor and fragrance industry; In terms of food diversity, the policy encourages the transformation and upgrading of the food industry, thus promoting the development of the downstream industry of flavors and fragrances. Flavor and fragrance industry as a chemical raw materials and chemical products manufacturing industry, the stricter policy environment will make small enterprises with lax environmental governance face greater pressure, and enterprises with a certain scale and environmental governance norms have good development opportunities.
The raw materials of flavor and fragrance mainly include mint, lemon, rose, lavender, vetiver and other spice plants, and musk, ambergris and other animals (spices). Obviously, the upstream of its industrial chain covers agriculture, forestry, animal husbandry and many other fields, involving planting, breeding, agricultural science and technology, harvesting and processing and other resource-based basic links. Since flavors and fragrances are important excipients in food, skin care products, tobacco, beverages, feed and other industries, these industries constitute the downstream of flavors and fragrances industry. In recent years, with the development of these downstream industries, the demand for flavors and fragrances has been increasing, and higher requirements have been put forward for flavors and fragrances products.
2. Development status
With the economic development of countries in the world (especially developed countries), the continuous improvement of consumption levels, people’s requirements for the quality of food and daily necessities are getting higher and higher, the development of industry and the pull of consumer goods have accelerated the development of the world spice industry. There are more than 6,000 kinds of flavor and fragrance products in the world, and the market size has increased from $24.1 billion in 2015 to $29.9 billion in 2023, with a compound growth rate of 3.13%.
The production and development of flavor and fragrance industry, is compatible with the development of food, beverage, daily chemical and other supporting industries, the rapid changes in the downstream industry, prompting the continuous development of flavor and fragrance industry, product quality continues to improve, varieties continue to increase, and output rises year by year. In 2023, China’s production of flavors and fragrances reached 1.371 million tons, an increase of 2.62%, compared with the output in 2017 increased by 123,000 tons, and the compound growth rate in the past five years was close to 1.9%. In terms of the total market segment size, the flavor field accounted for a larger share, accounting for 64.4%, and spices accounted for 35.6%.
With the development of China’s economy and the improvement of national living standards, as well as the transnational transfer of the global flavor industry, the demand and supply of flavor in China are growing bidirectional, and the flavor industry is developing rapidly and the market scale is expanding continuously. After years of rapid development, The domestic flavor industry has also gradually completed the transformation from small workshop production to industrial production, from product imitation to independent research and development, from imported equipment to the independent design and manufacture of professional equipment, from sensory evaluation to the use of high-precision instrument testing, from the introduction of technical personnel to the independent training of professional personnel, from wild resources collection to introduction and cultivation and the establishment of bases. The domestic flavor manufacturing industry has gradually developed into a more complete industrial system. In 2023, China’s flavor and fragrance market scale reached 71.322 billion yuan, of which the flavor market share accounted for 61%, and spices accounted for 39%.
3. The competitive landscape
At present, the development trend of China’s flavor and fragrance industry is quite obvious. China is also the world’s largest producer of natural flavors and fragrances. In general, China’s flavor and fragrance industry has developed rapidly and made great progress, and a number of independent innovation leading enterprises have also emerged. At present, the key enterprises in China’s flavor and fragrance industry are Jiaxing Zhonghua Chemical Co., LTD., Huabao International Holdings Co., LTD., China Bolton Group Co., LTD., Aipu Fragrance Group Co., LTD.
In recent years, the Bolton Group has vigorously implemented the innovation-driven development strategy, increased investment in science and technology research and development, continued to occupy the aroma technology, biosynthesis, natural plant extraction and other scientific and technological highland, the courage to deploy and plan the development map, build the core competitiveness of the enterprise, expand the emerging future industries such as biotechnology, electronic cigarettes, medical and health, and laid a solid foundation for the casting of the century-old foundation. In 2023, the total revenue of Bolton Group was 2.352 billion yuan, an increase of 2.89%.
4. Development trend
For a long time, the supply and demand of flavors and fragrances have been monopolized by Western Europe, the United States, Japan and other regions for a long time. But the United States, Germany, France and the United Kingdom, whose domestic markets are already mature, have to rely on developing countries to expand their investment programs and remain competitive. In the global flavor and fragrance market, third world countries and regions such as Asia, Oceania and South America have become the main competitive areas for key enterprises. Demand is strongest in the Asia-Pacific region, which is well above the world’s average growth rate.
1, the world demand for flavors and fragrances will continue to grow. From the situation of the global flavor and fragrance industry in recent years, the global demand for flavor and fragrance is growing at a rate of about 5% per year. In view of the current good development trend of flavor and fragrance industry, although the development of aromatic industry in most developed countries is relatively slow, the market potential of developing countries is still large, food processing and consumer product manufacturing industry continues to develop, gross national product and personal income levels continue to increase, and international investment is active, these factors will enrich the world demand for flavors and fragrances.
2. Developing countries have broad prospects for development. For a long time, the supply and demand of flavors and fragrances have been monopolized by Western Europe, the United States, Japan and other regions for a long time. However, the United States, Germany, France and the United Kingdom, whose domestic markets are already mature, have to rely on vast markets in developing countries to expand investment projects and remain competitive. In the global flavor and fragrance market, third world countries and regions such as Asia, Oceania and South America have become the main competitive areas for key enterprises. Demand is strongest in the Asia-Pacific region.
3, the international flavor and fragrance enterprises to expand the field of tobacco flavor and fragrance. With the rapid development of the global tobacco industry, the formation of big brands, and the further improvement of tobacco categories, the demand for high-quality tobacco flavors and flavors is also increasing. The development space of tobacco flavor and fragrance is being further opened, and the international flavor and fragrance enterprises will continue to expand to the field of tobacco flavor and fragrance in the future.
Post time: Jun-05-2024