India: Fragrance and Flavor Industry: What India Needs to Do to Meet the Demand

Have you ever wondered who is behind the smell of your favorite perfumes, soaps, cosmetics, incense sticks, creams and lotions? How about the taste of your favorite chips and noodles? What refreshes you with its flavor when you brush your teeth with your favorite brand of toothpaste?

It takes a skilled team of perfumers and flavorists to use molecules extracted from natural flowers, fruits, trees and artificial molecules in state-of-the-art facilities and laboratories.

The flavors and fragrances (F&F) market is thriving and expanding, driven by a growing global population with rising disposable income. A market report estimates that consumers interact with F&F finished products 20-30 times a day.

India’s vast treasure of flowers, herbs, oils, spices, citrus fruits and fragrant woods have helped create some of the world’s most famous perfumes. It is home to a centuries-old history of scents – from sweet jasmine, deep rose and floral-spicy marigold to strong musk, earthy oud and refreshing mint. India accounts for about 3% of the global M&F market despite having 20% ​​of the world’s population. With our library of over 10,000 flavors and fragrances, the Indian F&F sector has grown almost 100% year-on-year over the past five years.

The new desire for experimentation by consumers and companies is not limited to deodorants and perfumes. Similar innovations are occurring in many other segments as consumer demand increases for new products that taste and smell different. A recent analysis valued the global food and beverage industry at $27.9 billion in 2018 and forecast the market to reach $35.1 billion by 2024. The FMCG segment closely studies new consumer behaviors to effectively adapt and improvise at an unprecedented rate.

The domestic M&F market is valued at $500 million, a small slice of the global total. To meet the demand, India must invest to provide Indian and international customers with winning tastes and flavors.

In the early 1980s, India’s FMCG industry depended mainly on imported flavors and fragrances. Today, major companies are focusing on adopting new technologies to stay ahead of the competition in the global market. The cosmetics and personal care industries are primary end users of F&F, manipulating flavors and fragrances to enhance the sensory appeal and value of products for consumers in a highly competitive marketplace.

Investing in world-class manufacturing facilities is essential to meet current and future customer needs. A skilled workforce is also essential to ensure state-of-the-art solutions. The growth of the Indian F&F sector is the result of experienced perfumers and flavourists, including global talents, supported by excellent consumer insights teams and their deep understanding of local markets.

Unlike many other categories, home care has responded well to restrictions imposed by pandemic conditions. F&F continued a strong global performance, with present value growth of 5% in 2018-2019 and revenue of $159 billion. Products such as liquid soap with sanitizers and hand sanitizers have seen a dramatic increase in sales. The demand for health-enhancing products has also fueled usage. Additionally, the adoption of sanitization and social distancing has enabled edible flavor manufacturers to control the spread of Covid-19 and meet demand.

There are many opportunities for foreign investors in India’s booming food and beverage industry. Distribution is a crucial area in which international partners can invest. The resilience and growth of the F&F industry in India testifies that good tastes and flavors are here to stay.

Donovan B. Sanford