Vanillin

Vanillin Global Market Outlook:

Market Size 

Approximately 33,827 MT in 2022.

Approximately $0.63 Billion (expected to grow at a CAGR of 7 percent from 2023 to 2026)

Industry Trends (2022)

• Developing drought/pest/disease resistant and high-yield potential varieties of vanilla, so as to improve feedstock availability in countries, such as Madagascar.

• For example, Israeli startup Vanilla Vida, has developed a proprietary greenhouse method for vanilla cultivation.

Porter's Analysis on Vanillin

Supplier Power

• Suppliers to fragrance houses have low power, as this industry is fragmented

• Increase in regulation cost, coupled with erratic supplies of natural ingredients, involves huge cost in mechanizing and accumulating inventory, which will eventually reduce the profit margins of fragrance houses

Barriers to New Entrants

• Technical capabilities and access to raw materials are the key risks for new entrants in the fragrance industry

• Complying several government regulations on safety and sustainability also prevents new entrants to sustain in the market in long term

Intensity of Rivalry

• Fragrance industry is highly consolidated with the top 10 fragrance houses hold around 80 percent of the total supply

• High competition, coupled with maturing markets, is intensifying the rivalry

• Suppliers are attempting to achieve competitive advantage through technological innovation

Threat of Substitutes

• Switching cost will be very high, as most fragrances are formulae patented by FMCG clients

• As the personal care fragrance industry is highly dominated by synthetic ingredients, threat of substitution from natural products is very low

Buyer Power

• Consumer companies have to completely depend on unique fragrances manufactured by fragrance houses

• Quality and sustained supplies remain the key factors, which reduces switching between suppliers

End-user Industry Analysis : Vanillin

• The food and beverage industry is the largest consumer and is the most common flavor used in majority of foods

• Growing demand for variety food products is encouraging manufacturers to produce vanillin products from a sustainable source.

• Vanillin is the aromatic compound extracted from vanilla pods after the harvest, fermentation, and curing process

• Food and beverage industry is the largest consumer and is the most common flavor used in majority of foods

• Use of vanillin in the food and beverage industry is growing at a CAGR of more than 6 percent between 2023 and 2026. The dairy industry is the largest within the food and beverage industrial segment. Confectionery and bakery are the other major industries that consumes vanilla within F&B

• Solvay has launched news flavors of vanillin, namely Rhovanil Natural Delica, Sublima, and Alta. The products are a part of the company's Rhovanil Natural CW flagship and would facilitate F&B manufacturers to have a cost-effective shift to natural ingredients. The products are made using a bioconversion process of ferulic acid, obtained from rice bran

• Another product launched by Solvay is the Rhovonil Vanillin in Saint-Fons France. The product is certified by International Sustainability and Carbon Certification (ISCC) PLUS system for mass balance accounting. The high purity vanillin will cater to home and personal care fragrance sector