The South American flavor and fragrance market is anticipated to register a CAGR of 4.75%, during the forecast period.
- The growing market for convenience and ready-to-eat meals, health and wellness foods, accompanied by technological advancements, are expected to boost the growth of the flavor market in South America.
- Consumer perception regarding the benefits of natural additives has generated interest among the consumers, about their development and use in processed foods, which is also owing to the rising demand for natural food flavors.
- The region has also seen a higher demand for fragrances from the personal care segment. Brazil is the major market where fragrances have a higher demand, owing to the customer inclination toward beauty and perfume products.
Key Market Trends
Growing Demand For Perfumes in The Region
The perfume industry in the region is driven by increasingly westernized young consumer base in urban centers along with spurring multi-channel strategies, digitalization and the need to offer products above and beyond the basics, tapping into new areas such as experience and personalization. Brazil is the largest market for fragrances in Latin America by a wide margin, although the country itself is a tale of two halves. Consumers in the northeast of the country are heavy users of fragrances, whilst interest wanes further south. Another driver is the growing feminine fragrances strengthened by the new launches.
Brazil Holds a Prominent Market Share
In Brazil, with the growing acceptance of frozen and processed food, the flavor manufacturers have many opportunities to extend their brands and strengthen connections with Brazilian consumers. In 2018, the food processing industry in Brazil witnessed a growth of 2%, compared to the previous year, driven by the gradual recovery from the most severe economic crisis. To incentivize innovation, the Brazilian government reduced import duties. Among the sectors that benefited from this measure, 11.85% of the equipment imported was for the beverage industry and 4.47% was for the food industry. This factor had a direct positive impact on the food flavor manufacturers worldwide. Brazil is also a major market for fragrances from the beauty and personal care industry, owing to the growing importance of personal growth among the population and social living standards.
The South American flavor and fragrances market is consolidated, with major players holding a prominent share in the market. The major players in the market are Givaudan, IFF, Firmenich, Symrise, Takasago, Sensient Technologies, etc. Players in the market are expanding their product offerings by bringing innovations in their products to cater to a wider consumer base.
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