Strong outlook for the beverage industry supported by product developments focused on improving the nutritional value is propelling the beverage flavoring systems market growth. Beverage innovations offering ethnic flavors along with use of floral & botanical flavors in diverse alcoholic and non-alcoholic applications is driving the business expansion. Consumer preference for new taste sensations coupled with growing industry competitiveness is positively influencing the industry advancement.
Consumer driven movements such as ?clean label? have transformed the consumer preference towards natural substances. Stringent government regulations pertaining to consumer safety are likely to propel natural flavors application scope. Further, the industry observes surging consumer demand for organic, non-GMO, gluten-free, and similar product categories with increasing health consciousness. However, significant price difference between the natural and artificial flavors can hamper the market development.
Technological advancements in the flavors & fragrances industry such as development of encapsulated flavors is positively influencing the business growth. Encapsulation is utilized in the industry for applications such as instant drinks, tea bags, loose tea, and coffee. It offers multiple benefits including controlled release, extended shelf life, odor masking, stability & precision in nutrient delivery.
Carriers as an ingredient account for a substantial volume share in the global beverage flavoring systems market. Carriers are majorly used to dilute the flavoring agents as per the required concentration levels. The most common carriers used in the industry include propylene glycol, ethyl alcohol, triacetin, and vegetable glycerin. Strong outlook for the encapsulated systems is anticipated to surge the segment share over the forecast timeframe.
Natural beverage flavoring systems are projected to witness over 5.5% CAGR from 2019 to 2025. Rising health consciousness owing to fitness trends supported by favorable labelling norms is generating new growth opportunities. Also, consumer willingness to pay premium for superior & genuine products that offer significant health benefits as compared to its counterparts, is augmenting the product penetration.
Non-alcoholic beverages are estimated to hold over 71% share in the global beverage flavoring systems market by 2025. Positive outlook for ready-to-drink 3-in-1 coffee, green tea, and plant-based drinks are among the key drivers contributing towards segmental growth. Also, soft drinks are among the most innovative F&B segments catering the changing consumer preferences globally. Citrus and berries are among the highly preferred flavors for beverages.
Liquid flavor segment is anticipated to register sales at over USD 4 billion by 2025. They offer easy and quick blending product along with homogenous distribution, thereby maintaining the product quality. Liquid flavors find high usage in beverage applications such as energy drinks, fruit juices, and carbonated drinks. Whereas, dry flavors offer longer shelf life compared to counterparts and find positive application outlook in powdered drink mixes.
Asia Pacific is anticipated to account for over 35% share in the global beverage flavoring systems market up to 2025. Countries including China, India, and Japan hold over 50% of the regional share. Increasing consumer spending on cold & hot drinks supported by growing industry competitiveness will drive the product demand. Further, leading beverage manufacturers have focused on new product development to gain market share. Rising disposable incomes, rapid urbanization, and growing retail network are among the key economic aspects supporting the business expansion.
The global beverage flavoring systems market share is consolidated owing to presence of large multinational companies. The key industry players include International Flavors & Fragrances, Givaudan, Symrise, Sensient Technologies, Firmenich, Mane, Takasago International Corporation, Robertet SA, and Dohler. The key strategies observed in the industry include capacity expansion, mergers & acquisitions, product portfolio development, and strategic investments in technological upgradation. For instance, in June 2018, Firmencih launched its new natural and clean label platform to develop new products.