Market Trends of Asia-Pacific Aroma Chemicals Industry
Growing Demand from Food and Beverage Industry
- Aroma chemicals are known for enhancing flavor or fragrance in a wide range of food and beverages.
- Enhanced consumption of packaged food in developing economies has led to a surge in demand for aroma chemicals. The natural aroma chemicals market has been witnessing strong growth in the region due to the shift in consumer choice towards nutritional and healthy foods and beverages in most major countries like India and China.
- China is one of the largest consumers of food and beverages, with the food processing industry continuing to expand in line with the growing population and rising demand for healthy and tasty packaged foods. Some of the popular food products in the country include bakery products, beverages, and other nutritious food items, among others.
- According to the United States Department of Agriculture (USDA), the Indian food industry ranks the third-largest globally. Furthermore, the United States Department of Agriculture (USDA) estimates India's food and grocery (F&G) retail market will surpass USD 850 billion in sales by 2025.
- The Indian food and beverage industry has been experiencing steady growth over the past several years, with India anticipated to become the largest food producer in the world owing to favorable government policies. India has also continuously invested in the food processing industry in line with the increasing demand.
- All these factors are expected to positively influence the demand for aroma chemicals from the food and beverage industry in the region.
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China to Dominate the Aroma Chemicals Market in Asia-Pacific Region
- Aroma chemicals are commonly used in cosmetics, personal care, soaps, and detergents as an ingredient to enhance the aroma and provide a distinct fragrance to the product.
- China is the second-largest consumer of cosmetic products in the world. According to the data released by the National Bureau of Statistics, the total retail revenue of cosmetics in China amounted to RMB 207.10 billion (USD 6.30 billion) in the first half of 2023, registering a year-on-year growth of 8.6%.
- According to a report by L'Oréal, the country generated a total of USD 55.3 billion in the beauty and personal care market in 2022. The country's beauty market witnessed a strong rebound in 2022 after facing a slowdown due to economic uncertainties, numerous lockdowns, and other pandemic policy changes.
- Additionally, the beauty industry has been increasingly influenced by the e-commerce platforms in the country. By allowing consumers to share their experiences about the products, the e-commerce platforms have managed a strong foothold in selling cosmetics.
- The fragrance market in China has witnessed consistent growth in recent years owing to the increasing focus of youth consumers on their appearance and image and the rising popularity of luxury products in line with the growing disposable incomes.
- China has a robust soap and detergent market. As per the data by the National Bureau of Statistics, in 2022, the synthetic detergent output was 10.34 million tons, showcasing a decrease of 0.3% from the previous year. Chinese companies continuously innovate to make the production process for soaps and detergents more environment friendly.
- All these factors are expected to positively impact the share of aroma chemicals in the Chinese market.
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