The global food & beverage industry has witnessed healthy growth during the last ten years, and this growth is expected to continue over the coming years. Factors driving growth in the food & beverage industry in developing countries are different from those in developed countries. The growing population, favorable demographics, and rising income levels are key drivers in developing countries. However, in developed countries, rising health consciousness and increasing need for convenience foods are the major drivers for growth.
In recent years, rapidly rising incomes and urbanization have spurred an interest in convenient packaged foods and fast food. The unprecedented shift from rural to urban living is a major population change impacting global consumption habits. A portrait of tomorrow’s consumer would look young, likely below the age of 30, urbanized, and potentially living in sub-Saharan Africa, Asia-Pacific, or Latin America. This demographic group is the fastest growing and the largest contributor to value sales growth of food & beverage due to their increasing purchasing power and affinity towards westernized, convenient, and easy-to-prepare food & beverages.
On the other hand, growing middle-class consumers with rising income, specifically in emerging markets, such as China, are creating a ripple in consumption trends by encouraging premiumization, i.e., driving demand for high-quality packaged food that includes organic and locally produced products. This growing demand is expected to boost growth in the food and beverage market, as packaged goods require high flavoring loadings to preserve the taste lost during large-scale manufacturing.
The food & beverage industry is expected to remain the key driver for the growth of the food flavor industry. The flavor industry is expected to witness significant growth due to the flourishing food industry and increasing demand for processed foods. This growth is expected to drive the widespread use of flavors in processed food, snacks, soft drinks, candy and confectioneries, meat and seafood products, sauces and condiments, etc.
Furthermore, expansion of fortified food and beverages is expected to provide opportunities since flavors are required to conceal the unpalatable tastes of vitamins, minerals, antioxidants, and other added ingredients.
Moreover, increasing global interest in products that promote health benefits is also expected to drive demand for food and beverage, as masking flavors are necessary to use in conjunction with antioxidants and vitamins to make it more appetizing.
The efforts to reduce calories, salt, and fat in foods are also expected to increase the demand for flavors to improve the taste of products. There has been a rising global interest in natural and organic products across several consumer markets, including food & beverage. Therefore, the industry meets this demand by using essential oils and natural extracts in product categories. Thus, the high demand for flavors in the food & beverage industry drives the growth of the food flavors market.
In addition, changing consumer preference for food & beverage has created more opportunities for innovation within the industry, focusing on premiumization and value-adding features and ingredients. Similar to health awareness, premiumization is not a new trend, but it is increasingly being embraced by a large consumer base, fuelled by an expanding middle class with higher disposable incomes and an increasing appetite for quality and unique flavors.
Thus, the strong growth in the food & beverage industry has significantly boosted the growth of the global food flavors market globally. This market is expected to grow at a CAGR of 4.2% in the next seven years to be valued at $20.39 billion by 2028, according to the latest publication of Meticulous Research®.
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