Vanillin Market Intelligence

Industry Outlook & Drivers

Vanillin Global Market Outlook:

Market Size (2019) Approx. $29.5 billion (expected to grow at a CAGR of 6–7 percent from 2017 to 2022)

Industry Trends (2019)

• Developing drought/pest/disease resistant, and high-yield potential varieties, regarding natural fragrances (especially mint)
• Utilizing novel synthetic technologies to develop cost-effective production and processing (especially mint, vanillin, turpentine).

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