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FAO supports vanilla farmers in Papua New GuineaMarch 29, 2023
Camlin begins Vanillin production in IndiaJanuary 25, 2023
Vanilla Vida CEO talks on vanilla market challengesDecember 12, 2022
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Vanillin Industry Benchmarks
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Vanillin market frequently asked questions
Beroe’s market study reveals that the global vanillin market secured revenues worth around $29.5 Bn in 2019, with the figure likely to balloon at a 6–7% CAGR during 2017-2022.
Manufacturers are investing their resources in developing pest/drought/disease resistant and high-value potential variants of natural fragrances, mainly mint. Moreover, they are leveraging innovative synthetic solutions to ensure cost-efficient manufacturing and processing of vanillin and turpentine.
Market entrants find insufficient technical expertise and raw material access as massive hurdles to entering the vanillin market competitive landscape. In addition, a stringent regulatory framework on sustainability and safety weakens their foothold in the marketplace over the long run.
Rising compliance costs and irregular production of natural ingredients come with high costs of mechanizing and accumulating the inventory, thus hitting the bottom lines of vanillin producers.
The global vanillin market is significantly consolidated, with leading ten fragrance houses capturing nearly 80% of the overall production. Besides, the presence of maturing markets is influencing participants to bet on tech-driven innovations to gain a competitive advantage.
Buyers totally rely on distinct fragrances developed by vanillin producers with patented formulae. With quality and sustained supplies as the deciding factors, the switching rate of buyers consequently scales down.
Vanillin market report transcript
Vanillin Global Market Outlook:
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
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
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
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