Viewed as a safer and healthier alternative to synthetic variants, consumers are shifting preference to natural fragrance ingredients.
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Changing consumer sentiment and rising standard of living are expected to propel the natural fragrance ingredients market into a $5.3 billion market by 2024, a recent report by US-based market intelligence firm Transparency Market Research reveals.
The market is growing at a rate of 5.8 percent annually, thanks partly to the increasing preference of consumers toward naturally sourced products. Subjected to minimal processing, organic ingredients are viewed as safer and possess more health benefits than synthetic variants. These chemical-free substances also do not pose a great danger to the environment and are mostly not tested on animals, meaning they are cruelty-free.
This shift in buyer behavior is advantageous to the cosmetics segment, which is predicted to be the leading category between 2016 and 2024. During the period, the segment is expected to post a CAGR of 6.5 percent.
Rapid globalization and urbanization has likewise contributed to the industry's rise as it paves the way for an expanded middle class, which generally have more disposable income to spend on personal care products and fine fragrances.
Europe is foreseen to be the strongest market, accounting for almost 30 percent of the overall market share by the end of 2024. The rise can be attributed to the strong presence of leading companies in the region, including fragrance giants Switzerland-based Givaudan SA and Firmenich SA, and Germany's Symrise AG.
These companies, together with International Flavors & Fragrances of the US, held a collective share of 56.5 percent of the global market in 2015. They are expected to enter emerging economies to tap into the huge population base that is expected to show interest in commodities that are made from natural ingredients.
The market, however, will also be beset by obstacles. The high cost of extracting natural ingredients as opposed to manufacturing synthetics is among the major challenges. The loss of vital natural resources due to increasing demand is likewise anticipated to hamper growth. One example is the threat of extinction of some species, including musk deer, which has continually faced poaching despite the ban onextracting musk.