Market Overview
Vanillin is the extract of the vanilla bean. It is the most prominent as the superior flavor and aroma compound in vanilla. Vanilla beans constitute a pleasant smell that occurs naturally in vanilla beans. It is in the form of a needle with a white or very slightly yellow color. This belongs to the class of benzaldehydes. It acts as a plant metabolite, a flavoring agent, an antioxidant and an anticonvulsant. It is used as a flavoring agent in foods, beverages, pharmaceuticals, and cosmetics. Thus, an increase in demand for this product in various end-user sectors is predicted to grow at a high CAGR over the forecast period.
Market Dynamics
Drivers
- Rising interest for natural vanillin globally
- Increasing demand for food products worldwide
Restraints
- Harmful health effects
Opportunities
- Growing popularity of soft drinks globally
- Support from regulatory bodies for bio-based vanillin
Increasing demand for food products worldwide
Vanillin is considered as one of the most popular compounds in the world and is essential for the food and beverage industry. In order to accommodate the high demand for vanillin in the food and beverage industry, the chemical synthesis process is used. Vanillin is extensively used as a flavoring agent. It is primarily used in the food and beverage industry to enhance the sweetness of food items such as chocolates, candy, biscuits, ice-creams, and cakes. Recently, the use of synthetic vanillin has increased, when compared to natural vanilla extract, as a flavoring agent in beverages, due to the low availability of natural vanilla. Due to rising demand for natural vanillin, particularly in developed countries, companies like Solvay introduced natural vanillin to the US market for bakery, confectionery, beverage and other food manufacturers. The global population has quadrupled. In 1915, there were 1.8 billion people in the world. Today, according to the most recent estimate by the UN, there are 7.3 billion people — and may reach 9.7 billion by 2050. This growth, along with rising incomes in developing countries (which cause dietary changes such as eating more protein and meat) are driving up global food demand. The demand from emerging economies such as India, China, Thailand, Malaysia, Japan, and Indonesia for vanillin is fueling the growth of the global vanillin market. The major demand from these economies is from the confectionary and bakery industry.
Geographical Analysis
The North America market for Vanillin was valued at USD 307.8 million in 2019 and the market is estimated to grow at a CAGR of 9.02% during the forecast period to reach a market value of USD ** million by 2027. The significant presence of global vendors in this region is likely facilitating the growth of the bio vanillin market in the region. The high per capita incomes and living standards of consumers are strengthening the growth of the vanillin market in North America. Over the last few years, there has been a tremendous growth for natural vanillin demand in the US market fueled both by the ongoing vanilla bean crisis and consumers' avoidance of artificial ingredients and flavors. The Food and Drug Administration in the United States has its own governing standards for natural labeled products, which are likely to fuel the demand for bio vanillin over the years to come. Support from food regulatory bodies in the USA may prove beneficial for market progress in the forecast period. The major suppliers of synthetic vanillin are increasing their production capacities in response to the extensive demand for the vanillin-infused products in the region. There are few companies that are launching products exclusively for the North America market especially for the US. For instance, Solvay has launched a less expensive natural vanillin specially formulated for the US economy. In August 2018, Solvay announced Rhovanil US Nat gained GRAS approval from the Flavor and Extract Manufacturers Association of the United States (FEMA), meaning Rhovanil US Nat is considered a safe flavor ingredient for food and beverages in the U.S. The ingredient meets FDA standards for “natural vanillin” (21 CFR 101.22), “vanillin” (FEMA GRAS 3107), and “natural flavor.” It is non-GMO, allergen free, and kosher and halal certified. Vanilla had been successfully cultivated only in its native southeastern Mexico, home of its pollinator, the Melipona bee. Mexican vanilla industry, relative to the global market, will have a long way to go to reverse their fortunes in market share, despite their long proud history of producing vanilla. Companies that are located in North America are having agreements in the distribution of Vanillin with various players. For instance, In September 2019, Brenntag’s Food & Nutrition unit in North America announced an exclusive agreement with Borregaard AS regarding the distribution of its EuroVanillin Pure, Natural and Expert product lines in the U.S. and Canada. The deal opens up Borregaard’s portfolio of synthetic and ethyl vanillin to Brenntag for distribution. In March 2019, Viachem, a specialty chemical distributor, announced its partnership with Solvay’s Aroma Performance Global Business Unit, a leading producer of Vanillin and Ethyl Vanillin solutions. Effective immediately, Viachem will be distributing 1 kg packages of Solvay’s vanillin, Rhovanil, across North America directly to the food and beverage industry.
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