World Flavors & Fragrances

R Industry Study Freedonia forecasts to 2008 & 2013 for 17 countries & 6 regions World Flavors & Fragrances

Study # 1886 January 2005 $5100

Global demand to cially strong, advancing 7.3 percent per year through Western Europe increase 4.4% per 2008. Growth in the world’s 29% year through 2008 most developed markets will continue to be moder- Global demand for flavors ate, restrained by market and fragrances is forecast maturity, consolidation in North America to increase 4.4 percent per flavor and fragrance using 28% year to US$18.6 billion in industries and strong 2008. Developing nations downward pressure on will continue to record prices. better growth than industri- Asia/Pacific 27% alized regions such as Historically, flavor and Western Europe, North fragrance production has World Flavors America and Japan; and been dominated by the US, & Fragrances blends will grow faster than Japan and Western Europe Other Regions 16% Demand both aroma chemicals and -- in particular, France, the essential oils. Pricing United Kingdom, Germany (US$18.6 billion, 2008) pressures will also remain and Switzerland. However, an issue primarily due to a these areas will lose chemicals than more basic foods, health foods and shrinking customer base. market share through 2008 foodstuffs. Demand for nutraceuticals, confections, However, some slight to developing areas of the fragrance blends and cosmetics and skin care easing is expected due to world, where producers are essential oils will benefit products, pharmaceuticals, growing requirements for attracted to above-average from increased interest in and niche markets such as better quality, higher value growth in flavor and natural and exotic aromas, aromatherapy. consumer goods, where fragrance demand, as well which are more expensive quality is often associated as low labor costs and the than their synthetic coun- Study coverage with scent or taste, thus availability of raw materials terparts. Aroma chemicals providing some opportuni- at a lower cost. are expected to see These and other findings ties for higher cost flavors modest growth through are examined in World and fragrances. Flavor blends to 2008 as they continue to Flavors & Fragrances, a face pricing pressures and 362-page Freedonia study Developing regions remain largest competition from blends. available for $5100. It pro- to present best product segment vides historical demand Soft drinks, snacks data through 2003 plus growth prospects Flavor blends will continue forecasts to 2008 and 2013 to be the largest product among lead markets by product, market, world The large populations and segment through 2008, growing per capita incomes Among the major market geographic region and for aided by strong gains in 17 major countries. The of the developing areas of developing countries that segments for flavors and the world provide poten- fragrances, food and study also considers mar- are increasing their con- ket environment factors, tially huge markets for sumption of products such beverages is the largest, various flavor and fra- accounting for 47 percent details industry structure, as fast food, soft drinks, evaluates company market grance consuming items. snacks and other conve- of total demand in 2003. In particular, demand in the Fastest market growth is share data and profiles 24 nience foods. These leading manufacturers and Asia/Pacific region (exclud- products generally require expected in soft drinks, ing Japan) will be espe- snacks, convenience suppliers of flavors and higher loadings of flavor fragrances worldwide.

Visit www.freedoniagroup.com for tables of contents & complete text & tables * Tables for each region & country provide historical data List of Contents/Tables/Charts through 2003 plus forecasts to 2008 & 2013 for the following : each table includes forecasts through 2008 & 2013 Flavors & Fragrances Supply & Demand Flavors & Fragrances Markets ... plus key macroeconomic indicators

Introduction NORTH AMERICA EXECUTIVE SUMMARY General ...... 63 Summary Table ...... 3 Supply & Demand ...... 64 Markets ...... 66 United States ...... 68 MARKET ENVIRONMENT Canada ...... 75 General ...... 4 Mexico ...... 82 World Demographic Overview ...... 5 Table - World Population by Region ...... 6 World Economic Overview ...... 6 WESTERN EUROPE Recent Economic Performance ...... 6 General ...... 89 Macroeconomic Outlook ...... 9 Supply & Demand ...... 90 Table - World Gross Domestic Product by Region ...... 10 Markets ...... 92 Per Capita Gross Domestic Product ...... 10 France ...... 94 Table - World Per Capita Gross Domestic Product by Region ... 12 Germany ...... 101 Personal Income & Expenditure Trends ...... 12 Italy ...... 108 Table - World Personal Consumption Expenditures by Region . 14 The Netherlands ...... 115 Manufacturing Outlook ...... 14 Spain ...... 121 Table - World Manufacturing Value Added by Region ...... 15 United Kingdom ...... 127 World Food & Beverage Manufacturing Outlook ...... 15 Other Western Europe ...... 134 Table - World Food & Beverage Manufacturing Value Added by Region ...... 18 ASIA/PACIFIC World Beverage & Soft Drink Outlook ...... 18 General ...... 141 Table - World Soft Drink Consumption by Region ...... 21 Supply & Demand ...... 143 World Toiletry & Cleaning Preparation Outlook ...... 22 Markets ...... 144 Table - World Toiletry & Cleaning Preparation Australia ...... 146 Shipments by Type & Region ...... 24 China ...... 153 India ...... 164 OVERVIEW Japan ...... 171 Product Overview ...... 25 South Korea ...... 179 Table - World Flavors & Fragrances Demand by Product ...... 27 Taiwan ...... 186 Chart - World Flavors & Fragrances Demand by Product, 2003 27 Other Asia/Pacific ...... 192 Flavor Blends ...... 28 Table - World Flavor Blends Demand by Region ...... 30 OTHER REGIONS Chart - World Flavor Blends Demand by Region, 2003 ...... 30 General ...... 201 Fragrance Blends ...... 31 Demand by Type & Market ...... 203 Table - World Fragrance Blends Demand by Region ...... 32 Latin America ...... 205 Chart - World Fragrance Blends Demand by Region, 2003 ...... 32 Brazil ...... 208 Aroma Chemicals ...... 33 Other Latin America ...... 215 Table - World Aroma Chemicals Demand by Region ...... 34 Eastern Europe ...... 221 Chart - World Aroma Chemicals Demand by Region, 2003 ...... 34 Russia ...... 224 Essential Oils & Natural Extracts ...... 35 Other Eastern Europe ...... 230 Table - World Essential Oils & Natural Extracts Africa/Mideast ...... 236 Demand by Region ...... 38 Chart - World Essential Oils & Natural Extracts INDUSTRY STRUCTURE Demand by Region, 2003 ...... 38 General ...... 243 Market Overview ...... 39 Market Share ...... 244 Table - World Flavors & Fragrances Demand by Market ...... 40 Chart - World Flavors & Fragrances Market Share, 2003 ...... 245 Chart - World Flavors & Fragrances Demand by Market, 2003 . 40 Blends ...... 250 Food ...... 41 Aroma Chemicals & Essential Oils ...... 251 Table - World Food Market for Flavors & Fragrances by Region43 Industry Restructuring ...... 252 Chart - World Food Market for Flavors Table - Selected Acquisitions & Divestitures ...... 254 & Fragrances by Region, 2003...... 43 Competitive Strategies ...... 256 Beverages ...... 44 Product Differentiation & Market Segmentation ...... 257 Table - World Beverages Market for Flavors by Region ...... 45 Research & Development ...... 259 Chart - World Beverage Flavors Market by Region, 2003 ...... 46 Cooperative Agreements ...... 261 Cosmetics & Toiletries ...... 46 Table - Selected Cooperative Agreements ...... 262 Table - World Cosmetics & Toiletries Market Manufacturing Methods ...... 263 for Flavors & Fragrances by Region ...... 48 Marketing & Distribution ...... 266 Chart - World Cosmetics & Toiletries Market for Company Profiles Flavors & Fragrances by Region, 2003 ...... 48 BASF AG ...... 269 Detergents & Cleaners ...... 49 CPL Aromas Limited ...... 271 Table - World Detergents & Cleaning Preparations Danisco A/S ...... 272 Market for Fragrances by Region ...... 50 Degussa AG ...... 274 Chart - World Detergent & Cleaning Preparations Derives Resiniques et Terpeniques ...... 277 Market for Fragrances by Region, 2003 ...... 50 Firmenich SA ...... 278 Other ...... 51 Givaudan SA ...... 282 Table - World Other Market for Flavors/Fragrances by Region . 52 Hasegawa (T.) Company Limited ...... 288 Chart - World Other Market for Flavors ICC Industries Incorporated ...... 290 & Fragrances by Region, 2003...... 52 Imperial Chemical Industries plc ...... 293 Regional Overview ...... 53 International Flavors & Fragrances Incorporated ...... 298 Demand ...... 53 Kao Corporation ...... 304 Table - World Flavors & Fragrances Demand by Region ...... 54 Kerry Group plc ...... 306 Chart - World Flavors & Fragrances Demand by Region, 2003 . 55 Lyondell Chemical Company ...... 309 Production ...... 55 Mane (V.) Fils SA ...... 312 Table - World Flavors & Fragrances Production by Region ...... 57 Ogawa & Company Limited ...... 314 Chart - 2003Flavors/Fragrances Production by World Region ... 58 Polarome International Incorporated ...... 315 Per Capita Consumption Trends ...... 58 Rhodia SA ...... 316 Chart - Flavor & Fragrance Consumption Per Capita/ Robertet SA ...... 318 Consumer Spending Per Capita Relationship, 2003 ...... 60 Sensient Technologies Corporation ...... 320 World Trade Outlook ...... 61 Soda Aromatic Company Limited ...... 323 Table - World Net Exports in Flavors & Fragrances ...... 62 Symrise GmbH & Company KG ...... 325 Takasago International Corporation ...... 328 ZEON Corporation ...... 332 ASIA/PACIFIC Study #1886 - “World TABLE VI-8 Flavors & Fragrances” CHINA: FLAVORS & FRAGRANCES SUPPLY & DEMAND (million US dollars)

Item 1993 1998 2003 2008 2013

Population (million persons) 1188 1249 1295 1337 1380 $ flavors & fragrances/capita 0.1 0.2 0.4 0.6 0.8 ASIA/PACIFIC Flavors & Fragrances Demand 155 290 480 750 1160 Flavor Blends 44Food 110 and 165 beverage 260 processing 395 was the largest market for flavors in COMPANY Fragrance Blends 58China in 90 2003. 175 The largest 280 markets 455 for flavors include beverages, mainly Aroma Chemicals 28 40 76 110 160 Essential Oils & Natural Extracts 25soft drinks, 50 sweets 64 such 100 as confections 150 and ice cream, and condiments. PROFILES However, fast gains are being registered in savory flavors for use in the + net exports 151growing 158 snack food 53 industry 12 as 104 well as in convenience foods such as Presented for 24 Flavors & Fragrances Production 306instant 448 noodles. 533 Popular 738 flavors1056 include cola, citrus, fruit and vanilla for soft drinks and sweets, and pork, shrimp, fish and chicken flavors for global competitors Source: The Freedonia Group, Inc. savory snacks. Taste is a key factor in consumer purchases of food products, especially impulse items like snacks and sweets. This has been a such as Firmenich, China: Markets challenge for foreign flavor suppliers who have had difficulty developing International Flavors Demand for flavors and fragrances productsin China suitedis expected for local to reach palates. This has given an advantage to other $750 million in 2008, which translates toAsian 15 percent suppliers of the who Asia/Pacific are more familiar with flavors such as cuttle fish, & Fragrances, market.SAMPLE Growth is being TEXT driven primarilyprawn, by robust lichee increases and red in bean, domestic which are native to the region. production of key end-use products such as convenience foods, snacks, Symrise GmbH beverages,Explanations cosmetics and toiletries, that detergents andFast pharmaceuticals.growth is also expected Even in the toiletries and cleaning prepara- faster gains are being hindered by the use of generally lower value flavors and Takasago support each table’s tions sector, led by strong gains in toothpaste and other toiletry products. and fragrances due to price pressures fromToilet cost soapconscious is the endleading users. application for fragrances in China, although Nearlydata all markets and projectionswill show growth abovemost the other global end average, uses will although register faster gains. Other key applications falling production of cigarettes and other includetobacco toothpaste, products will shampoo, seriously skin care products, cosmetics and fine fra- limit demand for tobacco flavors. grances. Laundry detergents are also a significant market, with growth in this sector expected to accelerate along with recovery in the domestic detergent market. Most leading international producers of toiletries and

© Copyright by The Freedonia Group, Inc. detergents have now entered the102 Chinese market, either through indepen- dent subsidiaries or joint ventures with local producers. As a result, ASIA/PACIFIC fragrance producers have also ramped up production in the country. in the world, accounting for about one-third of global output. However, Other markets for flavors and fragrancesthe outlook in China for theoffer Chinese varied tobacco industry is weak, as the country faces prospects. Tobacco is currently the largestincreasing of these internationalmiscellaneous competition, overcapacity and falling per capita applications. China is the leading tobaccocigarette and cigarette consumption producing both country domestically andSAMPLE worldwide. As aTEXT result, the government has taken steps to reduce production of tobacco and cigarettes and this will have a negative effect on flavorData usage. illustrated Better opportunities with are anticipated in the pharmaceutical industry, which is expected to © Copyright by The Freedonia Group, Inc. 227 register rapid growth through 2008. Whilethe essential aid oils of have over always 100 been a part of traditional Chinese medicine, a significanttables market and for charts consumer- oriented aromatherapy has not yet developed.

TABLE VI-9 CHINA: FLAVORS & FRAGRANCES MARKETS Freedonia’s methods involve: (million US dollars)

• Establishing consistent economic Item 1993 1998 2003 2008 2013 and market forecasts Gross Domestic Product (bil 2000 US$)2620 4195 5991 8630 12080 $ flavors & fragrances/000$ GDP 0.06SAMPLE 0.07 0.08 TABLE 0.09 0.10 • Using input/output ratios, flow charts and Flavors & Fragrances Demand 155Historical 290 480 data 750 for1160 other economic methods to quantify data Food & Beverages 80 170 254 385 575 Toiletries & Cleaning Preparations 57 89 173 280 460 Other 181993, 31 1998 53 and 85 125 • Employing in-house analysts who meet % China 6.02003 9.6 as12.5 well 15.1 as 17.9 stringent quality standards Asia/Pacific Flavors & Fragrances 2600 3007 3840 4955 6495 Freedonia forecasts • Interviewing key industry participants, Source: The Freedonia Group, Inc. experts and end-users to 2008 and 2013

• Researching a proprietary database that © Copyright by The Freedonia Group, Inc. 161 includes trade publications, government reports and corporate literature Order Information Other Titles from The Freedonia Group

To order fill out the coupon below and mail to The Freedonia Group, or place your order by Food Additives phone toll free (800) 927-5900 (US) or World Pesticides (440) 684-9600, or by fax (440) 646-0484, Pesticide manufacturers will continue to face Increased food production and gains in value- or by e-mail [email protected] the challenge of maintaining profitability in an added sweeteners, nutraceuticals and natural industry with product registration costs, additives will drive US food additive demand Free Handling and Shipping limitations on patent protection and fierce cost up 4.8% annually through 2008. Flavors and flavor enhancers will remain the largest There is NO charge for handling and UPS competition. This study examines the US$30 billion world pesticide industry to 2009 and segment, while alternative sweeteners grow shipping in the US. Expect delivery in 3 to 5 days. the fastest. Grain mill products, pet food and Outside the US, Freedonia provides free airmail 2014 by product, market, world region and major country. The study also considers snack food show best market prospects. This service. If you require express delivery, Freedonia study analyzes the $4 billion US food additive provides this to you at cost. market environment variables, evaluates company market share and profiles global industry to 2008 and 2013 by product and industry participants, leading off-patent application. It also details market share and Save Fifteen Percent producers and major regional players. profiles major firms. If you order three (3) different titles at the same #1927 ...... 05/2005 ...... $5100 #1846 ...... 09/2004 ...... $4100 time, you can receive a discount of 15%. If your order is accompanied by a check, you may take a 5% cash discount (discounts do not Flavors & Fragrances apply to corporate use licenses). Fermentation Chemicals This study analyzes the US market for Demand for flavors and fragrances in the US Credit Card Orders chemicals produced through a fermentative will reach $4.4 billion in 2007. Growth will be process. It presents historical demand data supported by ongoing consumer preferences You may charge your order to either American for more expensive natural ingredients and Express, MasterCard or Visa. Please include (1994, 1999, 2004) and forecasts to 2009 and 2014 by market (e.g., fuel, food and bever- growing interest in more complex and your credit card account number, expiration date authentic flavors and fragrances. Fragrance and your signature. ages, drugs and nutritionals, animal feed, biotechnology, detergents and cleaning blends will lead gains, followed closely by products, cosmetics and toiletries, plastic essential oils and natural extracts. This study Orders Outside of the US fibers); and by product (e.g., alcohols, analyzes the 283 million pound US flavor and Checks must be paid in US funds, drawn against enzymes, organic acids, vitamins, polymers, fragrance industry to 2007 and 2012 by a US bank and mailed directly to The Freedonia biogums). The study also evaluates company product and market. It also details market Group. Wire transfers should be sent to: Fifth market share and profiles leading competitors. share and profiles major firms. Third Bank, Cincinnati, OH, SWIFT No. FTBCUS3C, #1921 ...... 04/2005 ...... $4200 #1748 ...... 12/2003 ...... $3900 ABA #042000314, Account #7520576476 (please include study number and/or invoice number with all wire transfers). Or you may use a credit card. World Dyes & Organic Pigments Corporate Use License Global demand for organic colorants will grow Need analysis on a topic Now every decision maker in your organization 4.9% annually through 2008. Pigments will can act on the key intelligence found in all continue to outpace gains in dyes; the not covered by Freedonia studies. For an additional $2,000 you dominant textiles market will continue to trail Freedonia Industry Studies? receive unlimited use of an electronic version advances in printing inks and other segments. (PDF) of the study. Place it on your Intranet, The Asia/Pacific region will supplant North Call Customer Service e-mail it to coworkers around the world, or print America as the largest regional market. This it as many times as you like! Order it today. study analyzes the US$8.4 billion global dye for details on and organic pigment industry to 2008 and Online Access: The complete text and tables 2013 by product, market, world region and for Freedonia Custom from our studies and reports can be purchased at 15 countries. It also evaluates market share Research our website www.freedoniagroup.com and and profiles major firms. through major commercial online hosts. #1875 ...... 12/2004 ...... $5100

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