Milk and milk beverages a growth market for Malaysia

Malaysian consumers continue to sustain demand for milk and milk-based beverages as they contain high levels of calcium and so help to strengthen bones and keep joints healthy, says Euromonitor. 

According to the research firm, new players such as Hybrid Allied Dairy Company and Calpis entered the drinking milk category and helped drive sales of drinking milk products in Malaysia last year. In addition, Holstein Milk Company shared plans to expand its drinking milk production line in Malaysia in 2016.

Dutch Lady Milk Industries led sales of drinking milk products with a 23% retail value share in 2016 due to Dutch Lady Milky in April 2016. Dutch Lady Milky was successful due to its use of seven cartoon characters and its availability in three variants which gained the attention of children in particular. In addition, the company improved its packaging of Dutch Lady PureFarm fresh milk from brick liquid cartons to gable-top liquid cartons for its 1-litre pack size.

Consumers are expected to continue to demand drinking milk products for their nutrients and because popular brands are priced affordably. Euromonitor expects frequent discounting by leading brands such as Dutch Lady, Yeo’s, Goodday and F&N Magnolia to continue.
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Low expectations for cheese market in Malaysia

The cheese market in Malaysia remained lacklustre in 2016. Consultancy Euromonitor says many imported brands focus only on high-end supermarkets as distribution channels, such as Cold Storage, Sam Groceria and Presto Grocers. On the other hand, dual-breadwinner families prefer to dine out more than cook at home, which makes cheese a rarity in homes.

Mondelez is the leading player in cheese for Malaysia in 2016, accounting for a 46% retail value share. The company offers a wide range of brands including Kraft Singles, Philadelphia, Kraft Cheese Spread and Kraft. These brands are widely distributed, in particularly through hypermarkets and supermarkets, and have many loyal consumers due to their affordable prices, quality and flavour.

Euromonitor does not see cheese taking off in Malaysia as consumers cook at home relatively rarely, making it unlikely to become a common recipe ingredient. The research firm also notes that domestic distributors are not educating consumers on incorporating cheese into their meals.  

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Iranians prefer traditional sugar confections

The modern sugar confectionery market is immature in Iran. Traditional products were popular in 2016, consultancy Euromonitor said, with geo-specific confectionery in different cities that are often sold as souvenirs. Gaz (گز) from Isfahan, a type of nougat; sohan (سوهان) from Qom, a saffron-laced toffee; and baklava (باقلوا) from Yazd, a layered pastry with nuts soaked in sugar syrup, are all popular traditional sugar confectionery in Iran. 

Sugar is popularly consumed with tea as sugar 'cubes' which are cut into irregular shapes by hand. Sugar-free products are also increasingly popular among Iranian consumers, as they are increasingly concerned with their appearance and health.

The Iranian sugar confectionery market is dominated by Shiva Manufacturing Company, the key leading player in pastilles with a wide range of products in different shapes and flavours accounts for a 22% retail value share in 2016. Next in line is Dadash Baradar Company (Aidin) which accounts for 15% market share by retail value in 2016. It is known for boiled sweets, toffees and mints. Draje Food Industries is in third place, accounting for 8% of retail value sales of sugar confectionery, mainly in pastilles.

Sugar confectionery is expected to grow steadily with a CAGR of 1% in constant 2016 terms from 2016 to 2021, and will be higher than that seen in the review period (2011 to 2016). Domestic suppliers will expand their activities while multinational brands are expected to enter the market. The consumption of new premium brands is expected to grow over the forecast period due to increased consumer curiosity and the willingness of the younger generation to spend more on these products. 

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Gum to have checkered future in Iran

Gum in Iran is being held back by smuggled goods which compete with official brands in both quality and unit price, says Euromonitor. "It is very common to go to a typical hypermarket or supermarket in Tehran and see shelves full of smuggled products, sometimes even more than official imports," the research firm said in an executive summary of the Confectionery in Iran report. 

The weak Iranian economy also limits purchasing power, the company said. 

Pars Minoo Industrial Company is a key domestic supplier and one of the leading gum players in the Iranian gum market for 2016, with its sugarised Chic and sugar-free White products both being very popular. The Chic brand has almost 100% penetration in retail, making it the best-selling gum in Iran. Retailers also use Chic gum as small change when they have no coins, a practice that is common in many countries where the smallest denominations are hard to find but still required.

The sugar-free White brand for gum by Pars Minoo is very similar to Orbit in terms of quality and packaging and has convinced many fans of Orbit to switch their loyalty to White because it is more affordable.

According to Euromonitor, the gum market outlook is promising. The leading domestic players are expected to expand their activities every year, resulting in stronger consumer awareness of local gumm brands and boosting gum sales. Smaller gum suppliers will also continue to maintain their small share in a highly competitive environment. 

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Euromonitor sees strong potential for chocolate in Iran

Growth in the chocolate industry in Iran is driven by demand from Iranian youth, but is hindered by a decline in purchasing power and a still-high rate of inflation in 2016, says Euromonitor in its Confectionery in Iran report. 

Euromonitor says the gradual loosening of sanctions in 2016 which will make dealing in Iran easier for key importers like Mars and Turkey's Yildiz Holding, which owns Godiva. Domestic manufacturers have also benefited from easier importation of raw materials and export of finished products. Due to these positive factors and strong potential, chocolate confectionery is expected to record retail value growth of 10% in 2016.

Parand Chocolate Company will maintain its lead in 2016, accounting for a 20% retail value share of chocolate confectionery. The company has a long history in the production and distribution of chocolate confectionery and offers a wide portfolio ranging from boxed assortments to tablets with different cocoa content. The company’s key brand, Farmand, enjoys a strong penetration level inside the retail environment, even in remote areas, the consultancy said.

Chocolate confectionery is expected to see better performance compared to the review period (2011 to 2016) as it starts off a low base and Iranian youth are ready to pay more for it. Key domestic manufacturers are expected to improve the quality and packaging of their products and transition consumers from traditional unpackaged products to modern packaged versions. Overall, chocolate confectionery is expected to record a CAGR of 7% at constant 2016 prices during the forecast period (2016 to 2021) which is much higher than the review period figure at 2%.

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Kazakhstan consumers buying yoghurt, sour milk products for health

Yoghurt and sour milk products, which is a growing dairy category in Kazakhstan, has seen interest from health-conscious consumers who believe the products are healthy and aid the immune system and digestion. The demand has spurred manufacturers to constantly update product lines with new tastes and health-orientated additives, says Euromonitor in a report on the dairy market in Kazakhstan.

Euromonitor identified Wimm-Bill-Dann Produkty Pitania as the leading company in 2016 with a 21% share of retail value sales for yoghurt and sour milk products. "This international manufacturer offered a wide range of yoghurt and sour milk products in Kazakhstan. Its leadership in retail value sales terms was due to comparatively high unit prices and strong marketing campaign," Euromonitor stated in an introduction to the report.

According to Euromonitor, Wimm-Bill-Dann Produkty Pitania also topped the 'other' dairy category, with a 17% share of retail value sales. The company offers brands such as Chudo, Domik v Derevne and Vesely Molochnik in chilled and shelf stable desserts, chilled snacks, cream, fromage frais and quark.

The increasing popularity of non-traditional products, such as chilled and shelf stable desserts, chilled snacks and coffee whiteners, will stimulate volume and value growth. Euromonitor says there will also strong demand for cream, condensed milk, fromage frais and quark*, as they include traditional products that remain popular among Kazakhstanis. Cream is consumed with tea for instance, while smetana (sour cream) is mainly taken with traditional hot meals like meat as well as berry dumplings and pancakes.

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*Quark is a dairy product made by warming soured milk and then straining it. The curds are spoonable and are said to have a mild flavour that goes well with both sweet and savoury dishes.

Milk demand to grow despite saturated market in Kazakhstan

Milk is an integral part of the nutrition intake of Kazakhstanis, especially in tea. As the population increases, the demand for milk is set to grow from 2016 to 2021, says Euromonitor. 

In 2016, manufacturers competed by offering high-quality products at affordable prices, relying on the use of high-quality raw materials and modernised equipment as well as on improving their production processes to do so. 

Agroprodukt Asia remained the leading player in 2016 with an 18% share of retail value sales. The company offers a wide range of drinking milk products, such as Odari, Zorkin Lug, Mumunya, Lyubimoe, Beloye, Moloko, Svezhee Moloko and Nashe.

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Sugar confectionery market to grow at 4% CAGR through to 2021 in Indonesia

Perfetti Van Melle Indonesia PT is known for the Mentos brand in Indonesia.

A large variety of affordable sugar confectionery, coupled with marketing efforts from leading manufacturers in Indonesia has been driving sales in this product category in Indonesia, says research consultancy Euromonitor in its Confectionery in Indonesia report.

Perfetti Van Melle Indonesia PT continues to lead sugar confectionery with a value share of 23% in 2016. The company is known for the Mentos, Alpenliebe, Fruit-tella, Marbels, Golia, Chox and Chupa Chups brands. Over the review period of 2011 to 2016 the company invested heavily in new product development as well as marketing in order to maintain its leadership of the category, Euromonitor said.

Sugar confectionery is expected to increase at a value CAGR of 4% at constant 2016 prices over the forecast period from 2016 to 2021, driven by the Indonesian consumer characteristics such as the willingness  to try new products. Euromonitor believes that manufacturers are likely to work on brand differentiation in the face of tough competition. They are also expected to launch new products regularly, while at the same time maintaining stable prices.

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Cheese still a luxury item in Kazakhstan

In 2016, the key issues in the cheese industry in Kazakhstan were product quality and the presence of counterfeit products, says Euromonitor.

Relatively few have tasted cheese in Kazakhstan, the research firm said. The highest consumption of cheese was observed in large urban areas like Astana and Almaty, where consumers tend to have the highest purchasing power. Unscrupulous manufacturers have offered products that resemble cheese but were made of vegetable oil, which passed muster with uninformed local consumers. 

Gadyachsyr led the pack in 2016 with a 14% share of retail value sales. Ukrainian-manufactured cheeses are preferred however because of their perceived better taste and quality.

Over the forecast period, Kazakhstan is expected to see a more stable economic situation and increased purchasing power, so expenditure on cheese is expected to grow. 

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Sugar confectionery market to grow 4% in Azerbaijan

Azerbaijan’s strong preference for unpackaged versions of sugar confections since Soviet times has continued in 2016. These include sold-by-weight caramels, boiled sweets, chews and jellies from both local and multinational manufacturers, and specific traditional sugar confectionery products, says Euromonitor. 

Domestic production mainly came from Bolluq and Bismak Senayi Kompleksi. More than a 50% share of sugar confectionery sold in the country is imported from Ukraine (10,304 tonnes in 2014). The leading brands from Ukraine include Konti and Roshen. Key Russian brands in Azerbaijan are Udarnitsa, Sharmel and Krasny Oktyabr, Rot Front, Nestlé Azerbaijan, Mars and Ferrero Russia (brand Raffaello). 

Some 100 tonnes of lollipops, mints and pastilles are imported annually from Ukraine, Russia, Turkey and Germany. Seventy percent of boiled sweets are imported from Ukraine; however, starting in April 2016, Russia has been taking action against exports of Ukrainian sweets to Georgia and Azerbaijan (through Georgia). Also, the brands Haribo, Tic Tac (Ferrero) and Hazerbaba from Turkey are increasingly accounting for a larger share of sales.

United Brands Distribution led sugar confectionery in 2016 with a 20% value share. The company officially distributes the top sugar confectionery brands from GBO Perfetti Van Melle Group, such as Chupa Chups. Fruit-tella and Mentos, and also the brands of GBO Mendelez International. In addition, for the last few years of the review period, the brand Sulá from GBO Perfetti Van Melle Group, imported by NBO United Brands Distribution, has increased in popularity. 

Sales are expected to grow at a CAGR of 4% at constant 2016 prices over the forecast period (2016 to 2021). Other sugar confectionery is set to record a strong performance over the forecast period, which will be due to an expected increase in the number of brands with health and wellness positioning. Boiled sweets is set to continue to be the largest category in both value and volume terms over the forecast period.

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Chocolate takes up lion's share of confectionery market in Azerbaijan

Accounting for a 50% value share of confectionery in Azerbaijan, chocolate confectionery is a very saturated category and is represented by chocolate pouches and bags, boxed assortments, chocolate with toys for children, countlines*, seasonal chocolate and tablets says Euromonitor in its Confectionery in Azerbaijan report. 

After local currency devaluations in 2015, disposable incomes in Azerbaijan shrank, pushing consumers to cheaper brands. Nur is currently the leading company, accounting for a 14% value share in 2016. Nur is the official distributor of the brands of Mondelez International, such as Alpen Gold, Vozdushny, Milka, Toblerone, Twist and others. 

Nestlé Azerbaijan, representing the brands Nestlé, Kit Kat, Nesquik, Nuts and others, accounted for a 12% value share of chocolate confectionery in 2016. The tablets and countlines distributed by these companies are highly popular among consumers due to their wide variety, extensive promotions and advertising through media resources, availability and good positioning.

The main consumers of chocolate in Azerbaijan, particularly chocolate with toys, countlines and tablets, remained children and young people. Older people traditionally prefer chocolate pouches and bags. Over the forecast period (2016 to 2021), local production of chocolate confectionery is expected to grow, which will drive prices down slightly and result in stronger competition. New flavours and packaging are expected to be introduced over the forecast period.

*Packaged candy packed in boxes that is displayed within the box, but purchased individually.

Milk-Pro is the dairy king in Azerbaijan

Milk-Pro tops every dairy category in Azerbaijan in 2016, says research firm Euromonitor. The company had 13% of value sales for cheese, 21% of the value share for its milk brand Sevimli Dad, and 17% value share for traditional sour milk products such as ayran and dovga.

The trend towards savoury milk flavours continued in Azerbaijan in 2016. Key local players expanded their ranges in order to become more competitive. Consumers demanded natural/organic ingredients, low fat/fat-free, nutrition and protein-rich milk products, as well as full-fat milk drinks.

Euromonitor forecasts that the milk market will grow through to 2021 and become increasingly saturated with brands labelled as non/reduced-fat, nutritive, organic/natural and others, in response to the spread of the health and wellness trend in Azerbaijan.

Consumption of yoghurt and sour milk products remains stable as well due to the same health and wellness trends and the strong belief that these products extend life. Over the forecast period (2016 to 2021) the demand will shift from unpackaged to packaged yoghurt and sour milk products, Euromonitor said. leading to volume growth. Competition is also expected to intensify, which could further diversify the market.

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Doogh market contracts in 2016

Yoghurt is set to remain an essential part of Iranian cuisine and be consumed by people of all ages and all socioeconomic levels. The product will likely continue to be popular for breakfast and as a complement to Iranian dishes, says Euromonitor in a report on the dairy market in the country. In addition, growth will be driven by the use of sour milk drinks in place of carbonated drinks by Iranian adults, as well as an overall consumption of doogh*, a drink often served with an Iranian meal. 

In 2016 retail volume sales of sour milk products such as doogh declined by 1%, continuing the downward trend of the last three years of the review period (2011 to 2016) and demonstrating that the category has reached its maximum potential, says Euromonitor. 

Plain yoghurt, on the other hand, grew by 1% in retail volume terms, an improvement over the negative retail volume CAGR of 3% recorded over the review period. This is due to the introduction of more sophisticated products with health and wellness adding value, Euromonitor said. The consumer tendency to switch from unpackaged to packaged yoghurt was another important reason for volume growth in 2016, the research firm added.

Kalleh Dairy maintained its leadership in yoghurt and sour milk drinks in Iran in 2016 with a 21% retail value share in last year. The company boasts a wide product portfolio of yoghurt, including spoonable and fruited yoghurt, flavoured, full fat and low fat products. Its probiotic yoghurt has attracted consumers with health concerns. Kalleh Dairy products are widely available throughout the country and enjoy loyalty from Iranians. Attractive packaging and a reputation as a manufacturer of quality products have also added to its popularity.

Overall, yoghurt and sour milk drinks is expected to record a 2% value CAGR at constant 2016 prices over the forecast period (2016 to 2021), compared to the negative constant value CAGR of 5% witnessed over the review period.

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*A beverage made with yoghurt and salted water.

Perfetti Van Melle is 2016 gum leader in Indonesia

The positive volume growth of gum confectionery in Indonesia in 2016 was due to improved distribution of gum, especially chewing gum, as a result of the rapid expansion of modern retail outlets. Purchasers were also encouraged by the benefits of gum, including fresh breath and teeth whitening, says research consultancy Euromonitor.

PT Perfetti Van Melle Indonesia continued to lead gum with a value share of 58% in 2016, Euromonitor said. Perfetti Van Melle Indonesia has been successfully using promotions to build a wider consumer base and higher brand awareness.

Volume growth in gum is expected to remain positive over the forecast period from 2016 to 2021, with improved distribution expected to ensure product availability. Leading gum manufacturers are likely to continue price promotions and new product development, which would further boost growth in gum over the forecast period, Euromonitor said.

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Chocolate is the top indulgence product in Indonesia

Indonesians are now more aware of the benefits of chocolate if it is consumed in moderation, and continue to buy it as a snack or to gift on special occasions, boosting volume sales of chocolate confectionery in 2016, says research consultancy Euromonitor. In fact, chocolate confectionery is expected to continue as the most favoured indulgence product* for consumers of all ages in Indonesia, the company said.

Ceres PT has retained its clear leadership in chocolate confectionery with a value share of 52% in 2016, thanks to the company’s brand reputation, broad product offering and competitive pricing, Euromonitor said. Ceres markets several chocolate confectionery brands, including Silver Queen, Silver Queen Chunky and Delfi (tablets); Top (second leading countlines** brand); Delfi and Van Houten (boxed assortments); as well as Cha Cha and Chic Choc (chocolate pouches and bags). The company’s aggressive marketing campaigns have also contributed to its performance.

Euromonitor forecasts that chocolate confectionery is likely to post a healthy value CAGR of 6% in constant 2016 terms over the forecast period of 2016 to 2021.

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*An indulgence product is a luxury item which the buyer does not need and may feel guilty about purchasing. 

**Confectionery term for bars of candy or chocolate, often shipped to retailers in cartons. The contents are then sold individually.

Milk and yoghurt based drinks both popular in Indonesia

Heavy advertising in mass media, more television programmes as well as magazine articles focusing on health issues have led to rising awareness among Indonesian consumers of the benefits of drinking milk over the period 2011 to 2016, says Euromonitor.

Ultrajaya Milk Industry & Trading Company remains the leading player in drinking milk products with a 23% value share in 2016. Its flagship brand is called Ultra. The company's performance in flavoured milk drinks comes as a result of heavy marketing and improved distribution, Euromonitor said. 

Although already popular for its shelf-stable milk, Ultrajaya Milk Industry & Trading is still educating Indonesian consumers about the benefits of consuming liquid milk rather than powdered or condensed milk. In 2016, the company held many below-the-line event promotions, such as Tour de farm, centring around visits to the Ultrajaya farm in Bandung. In May 2016, it also held Preschool Roadshow Ultra Mimi Carafun in the city of Medan. 

Source: Ultra Mimi website. Pictures from an Ultra Mimi Carafun Roadshow held in February 2016.

Euromonitor notes that Indonesian milk consumption per capita is lower than in other emerging countries, so there is still room to grow. 

The yoghurt market is also growing, especially among middle- and high-income consumers, particularly women, Euromonitor said, as it isbeing aggressively promoted in the mass media as offering nutritional benefits and aiding digestion. Female consumers are increasing their consumption of such products as they believe that yoghurt can help them maintain a slim figure, improve their skin and slow the ageing process, the research firm notes. Sour milk drinks, mainly targeted at children, are preferred by some parents compared to flavoured milk drinks, as they typically contain good bacteria for digestion.

In 2016, Yakult Indonesia Persada PT with dominated the yoghurt and sour milk market with its Yakult drinking yoghurt, which had a 69% value share, Euromonitor said. Yakult’s value share gain in 2016 comes down to improved distribution, via both retail channels and Yakult Ladies - Yakult employees who deliver Yakult drinks directly to customers in Indonesia. Apart from the growing number of Yakult Ladies promoting the brand not only in residential areas but also in schools, Yakult Indonesia Persada has also benefited from the rapid expansion of modern retailers in Indonesia, especially convenience stores, hypermarkets and supermarkets.

Yoghurt and sour milk products is likely to continue to benefit from growing health awareness, particularly among middle- to upper-income consumers, Euromonitor predicts. The increasing number of health-conscious consumers is expected to result in the expansion of yoghurt and sour milk products’ consumer base over the forecast period. Manufacturers are likely to continue to invest heavily in educating consumers about the health benefits of yoghurt and sour milk products.

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Cheese becomes popular in Indonesia

More Indonesian families, particularly in the big cities, are expected to start using cheese as a main ingredient in their meals. According to research firm Euromonitor, more consumers have started to prepare Western foods which use cheese as an ingredient by themselves at home. These include pizzas, pasta dishes, cakes, pastries and toast. Cheese has become very popular to serve with white bread as a substitute for chocolate sprinkles, jam or honey.

An increasing number of foodservice outlets and rising number of new menus using cheese by existing foodservice outlets may also prompt faster volume growth of food-service sales of cheese in the forecast period, Euromonitor said.

Kraft was named as the leading cheese brand in Indonesia in 2016, with Kraft Ultrajaya Indonesia PT commanding a 61% share of value sales. The company’s dominant position is attributed to its early entry into the Indonesian cheese market, a wide variety of other processed cheese products and aggressive marketing, using both television advertisements and below-the-line activities.

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Read the WorkSmart Asia blog post about popular brands in Indonesia

Azerbaijan cheese lovers going domestic in 2016

Currency devaluation led to a significant price jump for imported cheese in Azerbaijan in 2016, resulting in consumers moving to value-for-money domestic brands instead, says Euromonitor in its Dairy in Azerbaijan report.

Milk-Pro MMC led in the cheese category in 2016, accounting for 13% of value sales.

Over the forecast period (2016 to 2021) consumers of cheese are expected to switch from unpackaged to packaged products. The share of imported premium cheese is expected to grow, with interest in new flavours.
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Cheese options grew for Iran in 2016

More sophisticated products were offered to Irani consumers in 2016, contributing significantly to growth in the cheese category, says Euromonitor in its Dairy in Iran report. One type of cheese had previously been available, a soft cheese called Iranian UF cheese; key manufacturers diversified and offered cream cheese, processed cheese and other options, which helped the whole category to grow at a healthy rate.

Pegah Dairy was the lead manufacturer in cheese in 2016 with a 29% share of retail value sales, Euromonitor said. The state-owned company has several factories across the country, including in Pegah Khorasan, Pegah Gilan and other areas, which supply their territories with fresh dairy products. Pegah Dairy maintains the popular Pegah Shabnam brand of cheese, a simple soft cheese packaged in saltwater. The company has a very strong distribution network which guarantees its presence even in remote areas and was able to strengthen its position in 2016 with strong marketing campaigns in 2015 and 2016.

According to Euromonitor, strong demand from Iranians for packaged cheese will likely continue to boost retail sales of cheese over the forecast period. As in the review period, sales are set to be driven by the fact that cheese is widely consumed in Iran and general demand for sophisticated processed cheese is still growing. Overall, sales are expected to record steady annual rises with CAGRs of 1% in retail volume and 2% in value terms at constant 2016 prices over the forecast period (2016 to 2021), both of which are improvements over the equivalent performances of the review period (2011 to 2016).

In contrast, drinking milk product players have been consolidating. Demand has continued to decline, especially in shelf-stable category, as many young shoppers consider this type of milk unhealthy option and believe that it contains preservatives.

Pegah Dairy is also the leader in drinking milk products, with a retail value share of 21% in 2016, slightly lower than in 2015. Pegah Dairy has the most productive production line amongst manufacturers in the popular fresh milk category. Its distribution network has also helped its lead position. It also has one of the most visible advertising campaigns in stores.

PROSPECTS

Sales of drinking milk products as a whole are expected to grow due to increased awareness and improvements in the Iranian economy. Overall, drinking milk products is expected to register a value CAGR of 9% at constant 2016 prices over the forecast period (2016 to 2021), some five percentage points higher than the equivalent figure from the review period (2011 to 2016).

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APAC, Middle East consumers are demanding natural ingredients in fragrances

According to Euromonitor, natural fragrances have been particularly successful over 2016.

Maria Coronado, Ingredients Associate Analyst at Euromonitor comments, “Multicultural consumers seek natural ingredients and fragrances are not an exception. Natural fragrances are gaining popularity and its use in the beauty and personal care industry is increasing globally, especially in Asia Pacific and the Middle East.” 

Euromonitor International has found that between 2015 and 2020, essential oils are expected to growth in beauty and personal care products at 5% CAGR in Asia-Pacific and 6% in the Middle East.

Consumer trend towards greener and healthier lifestyles is influencing the ingredients market. Big players such as Firmenich, Givaudan and Symrise are finding inspiration in nature and expanding their natural ingredients portfolio. Demand for these ingredients is expected to continue driven by demand from multicultural consumers, the global trend towards greener lifestyles, as well as the trend toward simpler formulations with fewer chemicals (freefrom claims and clean labelling) and towards multifunctional ingredients that can provide additional benefits besides aroma such as being antioxidants, anti-inflammatories, anti-pollutants, anti-stress, conditioning or emollients.

Coronado explains, “Although the demand for natural fragrances is increasing, the volumes of essential oils used in beauty and personal care are still far lower than volumes of synthetic fragrances. Naturals are no doubt on the rise, however, a key factor that can limit the growth of essential oils in certain applications is price volatility due to the high manufacturing cost of natural fragrances compared to synthetic ingredients and the insecure supply of ingredients derived from plants which is affected by uncontrollable and unpredictable factors such as weather and climate. 

"Production of these ingredients is also concentrated in some specific areas in Asia, Africa or Latin America with high biodiversity and this usually implies long-distance travel from these areas to the manufacturing point which has implications in prices and sustainability (transport emissions). In addition, properties such as product shelf life, aroma stability, and some of the organoleptic* properties of natural ingredients such as colour, aroma intensity or transparency might also limit its potential use.”

*Influencing the organs of sight, sound, smell etc.