Vanilla Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)
The global vanilla market was valued at USD 2,715.93 million in 2020, and it is projected to register a CAGR of 5.64% during the forecast period (2021-2026).
The COVID-19 pandemic unleashed a series of events affecting the entire supply chain of the food and beverage industry. However, the demand from the consumer created a bullwhip effect on the food industry, including more convenient, shelf-stable, and processed products, thereby, vanilla market kept its phase.
Vanilla has been one of the most popular flavors in various applications. The market's growth is driven by its diversified applications in end-user industries, ranging from food and beverage to pharmaceuticals. It is extensively used as a flavoring agent in the food and beverage sector, which is the major application augmenting the market growth. The ice-cream and chocolate industries cover a large portion of the market.
As there is an increasing consumer awareness regarding health and regulatory standards' effect on the environment, some of the major market players, namely Nestle, General Mills, and Hershey's, announced that they may be using natural colors and flavorings in their products. This is projected to drive the demand for vanilla, globally.
The demand for global natural flavors is broadly driven by surging consumer consensus to perceive food products as healthy if derived from natural ingredients, such as vanilla. With consumers now using both terms synonymically, it often influences them to skip products formulated with artificial ingredients, further benefitting the market studied.
This changing consumer behavior and market dynamics for food flavorings push food manufacturers to quit formulating artificial additives in food products. Moreover, major food companies, such as ITC, Kellogg's, General Mills, Nestle, Campbell, and Kraft, have assured to restrict the use of artificial additives and flavors from their product formulations, portraying a promising future of natural flavors during the forecast period.
Furthermore, the research conducted by the Macquarie University of Australia found that people are most likely to believe consumers of natural foods to be more virtuous than consumers of unnatural foods. Thus, this further pushes them to contribute to a much earlier stage of the value chain, rooting back to ingredients and propelling demand for vanilla as a natural food flavoring.
Vanilla in the United States is widely used in the food and beverage industry as a flavoring ingredient in preparing jellies, jams, and syrups. The antioxidants and antibacterial properties of vanilla make it suitable for skin cleansing and treating damaged skin-related problems. It is also known to alleviate anxiety disorders and depression. These benefits associated with the consumption of vanilla are expected to boost the demand among consumers in the United States, and subsequently, in North America.
Apart from this, the high per capita incomes and living standards of consumers are strengthening the growth of vanilla in the countries, such as Canada. With the high demand for products, especially in the food and beverage sector, key players in the country are partnering with foreign manufacturers to cater to the domestic market.
For instance, in 2017, the Canadian firm, CCC Ingredients, a division of Canada Colors and Chemicals Limited (CCC), partnered with Europe-based vanillin manufacturer, Solvay, to distribute its product.
The global vanilla market is highly competitive. The major global players have been continuously expanding their geographical reach and creating brand awareness, which gives them a competitive advantage. Nielsen-Massey Vanillas Inc., Synthite Industries Ltd (Symega), McCormick & Company, and Symrise AG hold a strong market position supported by their broad range of vanillin offerings, worldwide, and extreme penetration in the market. McCormick & Company is one of the leading players in the market. It adopted mergers and acquisitions to be the most effective growth strategy to further strengthen its position in the market studied.