Fragrance ingredients market driven by demand for cosmetic products

The global fragrance ingredients market size is set to grow to USD 3.82 billion from 2024-2028, according to Technavio, which estimates a CAGR of over 4.6% for the forecast period. The firm’s new report  says demand for cosmetic products is driving market growth, with a trend towards preference for natural ingredients. However, a major challenge is low shelf life.

The natural fragrance ingredients market is experiencing significant growth due to increasing consumer preference for plant-derived, animal-derived, and fruit-derived scents over synthetic aroma chemicals. This trend is driven by concerns about the potential skin irritations caused by synthetic fragrance ingredients when used in personal care products such as deodorants, hair oils, perfumes, and detergents. The Blossom Lab, a new research facility in Grasse, France, is designed to source natural fragrance ingredients from immersive research sites worldwide, further fueling this trend. As a result, the global fragrance ingredients market is projected to grow at an impressive rate during the forecast period.

The fragrance ingredients market is thriving, driven by the growing demand for aromatic products in various sectors. Natural fragrance ingredients, including essential oils and herbal extracts, are gaining popularity due to their eco-friendly appeal and minimal toxic effect on human skin. However, synthetic compounds continue to dominate the market, particularly in fine fragrances, perfumes, and alcohol-based offerings. Key fragrance ingredients include top tones like amber, cinnamon, orange clove; mid-tones such as sandalwood, vetiver, rose, and neroli; and base tones like rose and neroli. The fragrance ingredients industry serves various consumer goods, including perfumery, cosmetics, household cleaning supplies, and aromatherapy. The natural segment is growing, driven by consumer preferences for organic fragrances. Renewable ingredients are also gaining traction, as are eco-friendly alternatives to traditional chemicals. The synthetic segment remains significant, particularly in sectors like hospitals, medical emergency services, hand sanitisers, and industrial applications. The fragrance ingredients industry caters to various sectors, including Personal Care (shampoo, shower gel), Hair Care, Fabric Care, and the cosmetic industry (shampoo, shower gel, fine fragrances). Renewed focus on sustainability and consumer safety is expected to drive innovation and growth in the sector.

Market challenges

Essential oils are an essential component of the fragrance ingredients market, with top notes like lemon, bergamot, cajuput, caraway, citronella, cumin, eucalyptus, grapefruit, lemongrass, lime, mandarin, niaouli, and orange being highly volatile and easily evaporated. Base notes such as benzoin, cedarwood, cinnamon leaf, clove, myrrh, patchouli, rockrose (ciste/labdanum), sandalwood, and vetiver are less volatile and provide the base scent. Citrus oils, specifically lemon, orange, and lime, have been popular choices in the market over the last decade. However, their short shelf life, due to high volatility, may negatively impact the demand and growth of the fragrance ingredients market during the forecast period.

The fragrance ingredients market faces several challenges in various segments. Fixatives like benzoic acid and toluene pose sustainability concerns. Oleoresins, distillates, fractions, concretes, and absolutes from plant extracts, such as flowers, fruits, and vegetables, are popular but face supply inconsistencies. Odors from incense sticks and laundry, toiletries, households, candles, and fine fragrance items require eco-friendly, customised, and bio-based solutions. Chemical ingredients, including synthetic fragrances, raise concerns for skin irritation and health effects. The personal care segment seeks cleanliness and personal hygiene solutions, while the therapeutic applications segment targets anxiety and stress relief. Sourcing sustainable, high-quality ingredients from plants is crucial. Arachnology and therapeutic applications expand the market, but their fragrance ingredients require careful consideration. The natural ingredients segment, including organic compounds, is growing, while the synthetic ingredients segment faces increasing regulations. Overall, the fragrance ingredients market demands innovation, sustainability, and customisation.

Personal care

The personal care market, specifically fragrance ingredients, is thriving due to the expanding e-commerce industry and increasing consumer preference for online shopping. The convenience and accessibility offered by e-retail platforms have led to a surge in demand for personal care products. This segment primarily consists of face and body skincare items, such as anti-ageing products, moisturisers, and skin brighteners. Consumers seek high-quality, value-added products at affordable prices. Multifunctional skincare solutions are increasingly popular due to their distinct benefits for facial and body care. The growing awareness of skin health and the trend towards natural and organic products are additional factors driving market growth. Furthermore, factors like rising disposable income, a growing middle class, urbanisation, and heavy promotions contribute to the market's expansion during the forecast period.

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