Beruflich Dokumente
Kultur Dokumente
Since 1990, India has experienced a remarkably fast expansion in the domestic market for consumer
products containing F&F ingredients. In the not too distant future, the size of the Indian market will be
greater than that of the USA and the European Union. Essential oils, aroma and flavour chemicals
have traditionally been used in India and these have been sourced from domestic production and by
import from other countries. More recently, the robust economy, rising income levels and exposure to
Western influences have resulted in a substantial increase in imports.
This paper examines trends in Indias F&F market and considers the opportunities or constraints for
suppliers of essential oils, particularly those in the Sub-Saharan Africa region.
Indias Economy at a Glance
Indias economy has more than doubled in real terms since reform began in 1991, and shows no signs
of cooling. The broad commitment to liberalization demonstrated by three successive governments has
sparked unprecedented growth and opportunity, both for local companies and for the foreign ones
thinking about entering the subcontinent for the first time.
Consumer demand in India, increasing three to five times faster than the economy, reveals the outlines
of an aspiring middle class that is vibrant, growing, and young. Indeed 70 percent of Indias citizens
are less than 36 years old, and the country is home to 20 percent of the worlds population under the
age of 24.
The Indias F&F Ingredient Market
Market size
The global flavours and fragrances ingredient market was worth $6.3 billion in 2006, of which India
has a market share of approximately 10%.
Indias expected significance in the global market for F&F Ingredients by 2011
(US$ Millions)
The global market
Global
AAGR
Indias share
Products
2006-20011
2004
2005
2006
2011
in 2011
Essential oils
3,583
3,734
3,926
5,047
20%
5.2 %
Aroma chemicals
2,206
2,299
2,374
2,786
15%
3.3 %
Total
5,789
6,033
6,300
7,833
35%
4.5 %
Source: BCC Research
233
BCC Research has predicted an global average annual growth rate (AAGR) of 4.5% per year in the
F&F ingredient market and that in 2011 the global value will grow to $7.8 billion, of which the Indian
market has the potential to grow to the tune of US$ 3 billion.
Industry structure
The Indian F&F market is estimated at currently around $ 500 million and the top five international
houses account for 75% of the market.
Flavours comprise of 45% of the market while fragrances total 55%. However fragrances are also used
in the joss stick and pan masala / zarda (chewing tobacco) industries, where figures are typically not
disclosed. Hence, the F&F industry sales may not completely reflect these figures and estimates range
to 10% and higher.
234
The flavour market in India is highly fragmented into the bakery, savoury and confectionery segments
with buyers ranging from multinationals to individual Mom and Pop owned stores that manufacture on
a small scale. In all other segments, it is relatively more consolidated, as manufacturing technology
becomes more complex, restricting the entry of smaller players.
The fragrance market in India is highly consolidated and most of the sales are made by large or midsized personal and home care players such as Unilever, Godrej, Nirma, Dabur, Reckitt Benckiser,
Henkel, Marico, Johnson & Johnson and P&G. The exceptions are the joss stick segment and to some
extent the hair oils segment, which have a host of small players. The Indian fragrance market differs
fundamentally in its segments from the global market. Globally fine fragrances are a major component
of sales, while in India the fine fragrance market is negligible and soap and detergent form the bulk of
unit sales.
235
236
Indias Sourcing of F&F Ingredients and the Potential for African Suppliers
As was revealed by the lectures presented at the IFEAT 2005 Conference in Cochin, India is a
significant scale producer of both aroma chemicals and of a wide range of essential oils, which are
destined for consumption on the domestic market and/or for export.
The domestic production of some essential oils is presently sufficient for the Indian market demand.
However, India has had to import many other essential oils that are either not produced domestically
or for which domestic production levels are inadequate. With the predicted growth in the Indian F&F
market, this could present an opportunity for greater exports to India of certain essential oils.
The flavour oil sector offers good opportunities, particularly for citrus oils since there is very limited
domestic production. Within the fragrance sector, the opportunities are mixed: the rapidly growing
soaps and detergents sector predominantly consumes aroma chemicals but there remains a significant
consumption and import of essential oils by the compounders of traditional fragrances, which are
mainly the smaller players in the industry.
With regard to the potential for exports from the Sub-Saharan Africa region to India, opportunities are
perceived for producers of:
Orange, lemon, lime and perhaps some other citrus oils.
Ylang-ylang, clove, ginger, eucalyptus and rosemary oils.
However, current or planned developments aimed at production self-sufficiency in India might
constrain the export potential to India for some fragrance oils that have been reported at this
conference as currently being developed in Sub-Saharan Africa; specifically, geranium, patchouli and
vetiver oils.
Ravi Sanganeria has worked since 1997 at Ultra International Ltd, a leading
manufacturer of creative fragrances and flavours in India. He has held various
positions in the company and was appointed Director of International Business
Development in 2005.
237