MARKET ANALYSIS
Fragrance oil is a synthetically derived aroma or natural essential oil diluted with a carrier like vegetable oil, propylene glycol, or mineral oil. Fragrance oil is an additive in personal care & cosmetics products like soaps, shampoos, shower gel, detergents, perfumes, cosmetics, etc.; due to the demand for aromatherapy and aesthetics, fragrance oils are added to the products such as scented candles as well, household cleaners, air fresheners, vaporizers, soaps, perfumes, and many others to give them pleasure, and unique aromas. They are mainly categorized into natural and synthetic.
GROWTH DRIVERS AND CHALLENGES
Growth of fragrance oil in cosmetics and personal care is being fueled by consumers' evolving lifestyles, rising purchasing power in developing nations, and quickening development of multifunctional personal care ingredients. The market for personal care ingredients such as fragrance oil is being driven by a rising need for higher-quality ingredients in Europe and North America. In personal care and cosmetics fragrance oil is used for easy blending of products. The inert nature of fragrance oil makes them easy to use, as they lubricate, smooth, soften, extend, and resist moisture in cosmetic formulations.
Australia has a flourishing beauty industry. The country’s resilience and steady economic activity provide an ideal environment for the progress of local and international beauty brands present in the country. According to Statista, the beauty and personal care market in Australia is expected to grow annually by 3.10% CAGR from 2022-2026. People from the country have a high disposable income, which can be associated with elevated consumer demand for different cosmetic products. A high demand for different skincare products is attributed to the growing inclination toward self-care products, and the ability of social media to enhance the reach of products to many consumers. Therefore, the growth of the cosmetics and personal care industry is likely escalating the demand of fragrance oil in the coming years.
REPORT SEGMENTATION AND SCOPE
The "Global Fragrance Oil Market Analysis to 2030" is a specialized and in-depth study with a major focus on the global fragrance oil market trends and growth opportunities. The report aims to provide an overview of the global fragrance oil market with detailed market segmentation by type, category, application, and geography. The global fragrance oil market has been witnessing high growth over the recent past and is expected to continue this trend during the forecast period. The report provides key statistics on the consumption of fragrance oil worldwide along with their demand in major regions and countries. In addition, the report provides the qualitative assessment of various factors affecting the fragrance oil market performance in major regions and countries. The report also includes a comprehensive analysis of the leading players in the fragrance oil market and their key strategic developments. Several analyses on the market dynamics are also included to help identify the key driving factors, market trends, and lucrative fragrance oil market opportunities that would, in turn, aid in identifying the major revenue pockets.
Further, ecosystem analysis and Porter’s five forces analysis provide a 360-degree view of the global fragrance oil market, which helps understand the entire supply chain and various factors affecting the market growth.
SEGMENTAL ANALYSIS
The global fragrance oil market is segmented on the basis of type, flavor, and application. Based on type, the fragrance oil market is segmented as, natural, and synthetic. On the basis of flavor, the market is classified as, floral, fruity, woody, and others. The fragrance oil market is categorized on the basis of application into, cosmetics & toiletries, fine fragrances, home care products, and others.
Based on type, the synthetic type accounted for a significant fragrance oil market share which can be attributed to its popularity across the globe and wide availability. Synthetic fragrance oils are composed primarily of artificial compounds and materials. Most of these amalgams belong to a class of substances known as petrochemicals. Synthetic fragrance oils often last longer than natural fragrances and are generally more prominent due to their powerful fixatives. These helps balance the volatile nature of some ingredients, increasing synthetic oils' holding power. Due to the fact that natural ingredients are also not known for their ability to integrate well with other fragrances, synthetic fragrances have a valued place within the perfume industry, especially among industry leaders such as KATO Flavors & Fragrances, Veda Oil, and Floral Essential Oils. Synthetic fragrances are robust, intense, and durable. There is a greater variety of blends within the synthetic segment as some scents, like lily and lilac, cannot be extracted from flowers. These and many others can be easily manufactured as totally synthetic fragrances or as blends of synthetic and natural oils. Hence, all the factors mentioned above are projected growth for the synthetic segment in fragrance oil market for the upcoming years.
REGIONAL ANALYSIS
North America is one of the prominent markets for fragrance oil due to its increasing application in various end-use industries across the region. The increasing emphasis on health and wellbeing and the willingness of customers in the region to pay more for high-end products will help increase the rate at which consumers adopt pharmaceuticals, food, personal care, and cosmetics products. Due to favorable regulatory compliance and ongoing product advancements, notably in the healthcare sector, the region will experience significant growth. The fragrance oil market in Europe comprises Germany, France, Italy, the UK, Russia, and the Rest of Europe. This oil is frequently used in almost all cosmetic and personal care products, from emulsions to anhydrous cosmetics, including lip balm, baby oil, skincare, haircare, creams, lotions, and emollients. fragrance oil is an essential component of many cosmetic formulations. In India, the most prominent application of fragrance oils is hair oil, which is a part of the cosmetics and personal care industry. The overall cosmetics and pharmaceutical industries account for around three-fourths of the fragrance oil consumption in the country. Further, the strategic developments by manufacturers increase the demand for fragrance oil and are further expected to drive the fragrance oil market in the Asia Pacific.
INDUSTRY DEVELOPMENTS AND FUTURE OPPORTUNITIES
Partnership, acquisitions, and new product launches were found to be the major strategies adopted by the players operating in the global fragrance oil market.
In September 2022, doTERRA announced new natural and sustainably sourced essential oils and systems products. The essential oils include Eucalyptus, Guaiacwood, Spanish Sage, and doTERRA Hope Touch. These fragrance oils are applied in hair care and skin care products.
In April, 2022, Phoenix Flavors and Fragrances, a leading developer and compounder of high-performance flavors and fragrances, announced the acquisition of Innovative Fragrances Inc., an Atlanta-based manufacturers of fragrance compounds serving a diverse set of end markets including home fragrance, personal care, candles, and other air fresheners.
IMPACT OF COVID/IMPACT OF GEOPOLITICAL SCENARIO/IMPACT OF RECESSION
In 2020, due to COVID-19 pandemic various industries had to slow down their operations due to disruptions in value chains caused by the shutdown of national and international boundaries. The COVID-19 pandemic caused supply chain disruptions in key raw materials and disturbed manufacturing processes due to restrictions imposed by government authorities in various countries. COVID-19 crisis has drastically affected the fragrance oil market as it is produced from natural or synthetic ingredients, and during the pandemic it became difficult to extract fragrance oil from natural ingredients due to the lack of labors, and closed manufacturing units. The prices of natural essence, and other ingredients experienced a statically negative financial bubble during the COVID-19 outbreak. However, the growing demand from food processing and pharmaceutical & healthcare industries owing to the COVID-19 outbreak created the demand for fragrance oil. Further, necessary goods needed to be produced and transported, and the consumption of packaged food witnessed demand during COVID-19, which increased the demand for fragrance oil as fragrance oil is extensively used in food processing, food packaging, food grade lubes and release agents.
As the economies revived their operations in 2021, the demand for fragrance oil got fuelled for different applications. The COVID-19 has also had a moderate impact on the demand for fragrance oil. With the increase in demand for household cleaning products, there was an increase in the production of toiletries, fine fragrances, and home care products in which fragrance oils have massive demand. Furthermore, after the uplift of the COVID-19 restriction, there was an increase in production of pharmaceutical drugs, cosmetics, and personal & homecare products activities in emerging economies such as Asia Pacific, which has boosted the demand for fragrance oil.
COMPETITIVE LANDSCAPE AND KEY COMPANIES
Some of the key players operating in the fragrance oil market include, Aromaaz International, Royal Aroma, Givaudan, Veda Oil, Chemarome, Fragrance Innovation Australia, Guangzhou Yahe Bio Tech Co., Ltd., BMV Fragrances Pvt. Ltd., Floral Essential Oil, Craftiful Ltd, Bickford Flavors, Synthodor Company, Natural Sourcing Company, Herborist-global, Dupont, Raj Fragrance, among others.