Global Beverages Flavouring System Market - 2021-2028
The global beverage flavoring system market valued USD XX million in 2020 and is estimated to reach USD XX million by 2028, growing at a CAGR of xx%.
Beverage flavoring systems are complex mixtures derived from natural flavor or artificial processes that are used to change the flavor of a beverage. Beverage flavoring, such as sugar, HFCS, and fruit juices, is commonly used in carbonated water as a flavor enhancers and sweetener. Beverage flavoring is the process of enhancing the taste and aroma of a drink by incorporating liquid extracts, essences, and flavors. Beverage flavoring systems are used to create special and delicious beverage flavors. It's used in sparkling waters, energy drinks, blended teas, coffees, beers, and wines, among other beverages. The market's growth is being fueled by rising public awareness of health issues and technological advancements. Furthermore, technological advancements combined with increased R&D activities are expected to boost the demand for beverage flavoring systems industry.
Increasing health consciousness among the people is driving the market
Consumers nowadays are very conscious of their health and have also understood that proper nutrition and hydration are essential for the human body to thrive. Eating healthier foods is also seen as a preventive measure to avoid future health care costs. In addition, people who eat a well-balanced diet tend to be healthier with more vital immune systems and are at lower risk of infectious diseases and chronic illness. Individuals, regardless of age, who wish to lead wellness-oriented lifestyles care most about nutrition, fitness, work-related stress, and the environment. Growing health consciousness along with increasing prevalence of health issues such as diabetes, obesity and high blood pressure have resulted in consumers shifting to healthier beverages including sugar-free drinks, fruit juices, sports drinks, and functional drinks. Moreover, rapid growth in the consumption rate of beverages with low sugars and less artificial ingredients with functionality including high in nutrients, hydration, better immune support and digestive wellness are increasing the market growth of beverage flavoring systems. As a result, there has been a high demand for low-salt, low-sugar, and low-fat drinks, increasing demand for taste modulators and taste-masking agents. As the demand for healthier drink options is increasing, beverage brands are turning to innovative sweetener solutions to deliver the low- and no-sugar beverages that consumers seek. Whether naturally derived or otherwise, substitutions for nutritive sweeteners are dominating the beverage space. An Outside Voice Sweetening Study by Archer Daniels Midland (ADM), Chicago, showed that 68 percent of consumers are concerned about sugars and sweeteners, and 40 percent indicated that reduced sugar is essential to them when it comes to convenience food, drinks and snacks.
The beverage flavoring systems market's growth is hampered by side effects associated with the usage of Synthetic flavors enhancers in the upcoming years. The high initial investment required to enter the beverage flavoring systems market is a major factor that may limit market growth. Furthermore, strict health-related regulations are another factor that is expected to limit the target market's growth to some extent, posing a major challenge to the beverage processing industry
The use of flavoring agents is likely to grow at a rapid rate during the forecast period
The use of flavoring agents is likely to grow at a rapid rate during the forecast period. Due to the increasing health-conscious among the consumers, the demand for low-salt, low-sugar, and low-fat beverages is high, and this has been fueling the demand for taste-masking agents and taste modulators. The growth of this particular segment is also attributed to the growing consumption of beverages, owing to their nutritional values. To cater to the consumer demands for natural products combined with preservatives, beverage manufacturers focus on applying natural flavors such as natural stabilizers, including pectin. Pectin is used in fruit beverages and soft drinks. In 2016, the market value of pectin amounted to 120 million U.S. dollars, and it is expected to rise to about 180 million U.S. dollars by 2021.
The non-alcoholic segment dominated the market for beverage flavoring systems and held the largest revenue share of about XX% in 2020. The wide range of products under the non-alcoholic segments such as energy drinks, flavored milk, flavored water, mocktails, and juices, among others are contributing to the dominating share of the segment. The increasing varieties of aforementioned product types under non-alcoholic beverages are further supporting the maximum revenue share of the segment in the market for beverage flavoring systems. The benefits associated with non-alcoholic beverages over an alcoholic is another major factor supporting segmental growth. These beverages can promote post-exercise recovery, rehydrates the body, improves cardiovascular health, reduces the risk of osteoporosis, improves copper metabolism, promotes better sleep, and reduces anxiety and stress among others. The rising awareness about the health benefits associated with non-alcoholic beverages especially among the young population is contributing to the growth of the segment. Moreover, the increasing number of health freaks across the globe supports the demand for energy drinks and sports drinks.
Asia Pacific is expected to dominate the global beverages flavoring system market
The Asia Pacific region is expected to witness significant growth owing to the rapid growth of the food and beverage industry. Owing to their high disposable incomes, countries such as China, Japan and India are estimated to hold high potential for market growth due to a large young population. The growing demand for packaged juices, energy drinks and sports drinks is expected to drive the demand for beverage flavoring systems in the Asia Pacific region. China was the leading producer of beer in terms of production volume in 2019. In that year, around 370 million hectoliters of beer were produced in China. The United States was the second leading producer of beer with 200 million hectoliters production value. China accounts for about 25% of the total world population and hosts one of the most rapidly developing consumer markets globally, which provides a tremendous boost to the food & beverage industry. Over the recent years, China's demand for foreign food& beverage products is growing steadily. Revenue in the Chinese soda market amounts to USD 37,000 m in 2020. The market is expected to grow at an annual rate of 10%. China has one of the biggest bottled water markets globally, and it is expected to reach 55 million tons of total annual consumption by the end of 2020.
North America region accounted for more than XX% of the revenue share in 2020. North America follows Asia Pacific in terms of revenue derived from various beverages flavoring systems. In North America, U.S. accounted for the largest revenue share of XX% in 2020. The demand for alcoholic beverages such as beer, wine, and spirits are high in the country. The rising production of beverages due to the presence of major beverage manufacturers The Coca-Cola Company, PepsiCo, and Starbucks Corporation among others in the country are contributing to the growth of the market in the region.
The global beverage flavoring system market is fragmented with varied small-and-medium-sized players, which has increased the competition between players. Flavor manufacturers are adopting new technologies particularly to manufacture natural and synthetic flavors for better stability and efficient flavor production. The extraction of flavors from source ingredients is a complex procedure. Hence, manufacturers are adopting various advanced methods such as biotechnology, encapsulation, and emulsion to increase the effectiveness of the flavors. These enable them to meet the global demand for various flavors. The flavor manufacturers have also been keeping the track of emerging trends in the beverage industry, which is helping them to cope up with the future demands from their customers. The continuously changing preference of the consumers about taste and flavor is the key aspect for the flavor manufacturers. For instance, International Flavors and Fragrance (IFF) is expanding its core product line with beverage solutions having citrus and other natural flavors. The company's citrus flavor is its key product line in the entire product portfolio. IFF is focused on introducing new and innovative citrus flavors for the food and beverage industry. Further innovations & launches in the ready-to-drink segment is positively influencing product penetration. For instance, in February 2019, Coca Cola Introduced a grape juice-based sparkling drink in India to cater the robust demand for non-alcoholic segment. Further, increasing demand for encapsulated flavors supported by manufacturers focuses on increasing the production capacity will escalate the business advancement. For instance, in May 2019, Symrise expanded its encapsulation capacity in the U.S. Flavor encapsulation is increasingly used by manufacturers to limit the flavor loss during various processes & storage and provide a control-release in a specific environment.
COVID-19 Impact: Pandemic had a positive impact on global beverages flavoring system market
The surge and shift in customer and consumer demand from the foodservice channel to retail, driven by increased at-home usage due to COVID-19 sheltering-in-place precautions, will result in consumer-packaged goods manufacturers seeing a corresponding increase in volume revenue and profit. On the other hand, COVID-19 has disrupted the supply chains of the food and beverage industry. A report from Resilience360 found that the shutdown of manufacturing plants, changing consumer behaviors, and price increases have altered F&B supply chains. Plant closures and changes to operating procedures - including socially distancing workers - contributed to overall labor reductions and limiting production. However, the demand for immunity-boosting drinks has boosted during the pandemic. Since the pandemic struck, consumer awareness of its importance has exploded exponentially. In a recent survey, 72% of participants stated that they were concerned about their immunity levels. Immunity-boosting ingredients have seen a sales bump already, and more companies are expanding their portfolios with those features. According to the Innova Consumer Survey 2020, six out of 10 global consumers are increasingly looking for products that support their immune health. One in three says that their concerns increased in 2020. Innova identified immunity as a top trend for the following year.
Understand the current market scenario and viability of beverages flavoring system over the forecast period
Visualize the composition of the global beverages flavoring system market in terms of origin, form, ingredient, beverage type, and composition to identify major players, growth potential, and market strategies
Identify the key regulations prevailing in the market and understand their impact on the market over the forecast period
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