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3. New Revenue Pockets - Cross-Product Usage Of Flavors to Drive the Demand For Flavor Systems Market

The cross-product usage of flavors and an increased affinity toward the consumption of novel flavors are a few factors driving the flavor systems market. This market is projected to reach 6.96 billion by 2023 from USD 5.64 billion in 2018, at a CAGR of 4.3%.

On the basis of type, the fruits & vegetables segment is projected to grow at the highest rate from 2018 to 2023. A rising awareness amongst consumers regarding health and flavor popularity have led many manufacturers to include fruit & vegetable flavors in their products. As a result, the market is experiencing the highest growth rate. Furthermore, fruits & vegetables find their application in a range of food & beverage products such as beverages, savories, desserts, and bakery & confectionery products, which makes  this  segment a preferred one among consumers and manufacturers alike.

On the basis of source, the nature-identical flavors segment is projected to grow at the highest rate during the forecast period. These flavoring substances are characterized as being obtained from chemical synthesis or isolation by chemical processes, which makes them more economical in nature. Most of the commercial flavorants are also nature-identical substances, as these tend to be more stable in nature than natural flavoring extracts while being a more cost-effective option. Although nature-identical substances are formulated in a laboratory, the human body cannot distinguish between natural and nature-identical substances, which makes them safer than synthetic flavors.

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On the basis of application, the beverages segment is projected to account for the largest share in the market during the forecast period while also being the fastest-growing one. The usage of various types of flavors in this application is largely attributed to the introduction and combination of different flavors to create elegant and aromatic combinations. Additionally, this category also includes novel flavor combinations such as flavors of fruits & vegetables and spices blended with beverages such as coffee and chocolate shake to create sweet & spicy and warm fall flavors, which makes the category the fastest-growing one.

On the basis of form, the liquid segment is estimated to occupy the majority of the share of the global flavor systems market.  The major advantage associated with the usage of liquid flavors systems is that these flavors can be easily mixed together to achieve a homogeneous distribution of each component in the finished flavor. Due to this, the liquid segment accounts for a larger favorability among food & beverage manufacturers.

Flavor systems or customized blending systems for flavors, targeted to achieve mass customization goals, have garnered significant favor  from manufacturers and consumers alike. Various manufacturers and quick service restaurants (QSRs) are now looking at providing consumers with highly customizable products to help create a differentiated opportunity. For instance, Starbucks uses its website “frappucino.com” to allow consumers to create new beverage options. They could add new flavors such as raspberry or strawberry or new ingredients such as protein powder to help create products that they prefer. While this allows Starbucks to  analyze consumer preferences and the popularity of different flavors and ingredients, it also helps them to understand the popular blends that the company could look forward to investing in.

Customization in any form remains associated with increased cost of products and their premiumization aspects. As a result, customized blends of flavors or flavor systems inherently remain highly priced and affect the final  cost of products. These high costs of flavor systems could be attributed to flavor extraction procedures, technological developments associated with the blending of flavors, and the extent of customization executed for the creation of a unique flavor blend. This eventually results in huge costs being incurred by manufacturers when investing in different flavor blends. Furthermore, the inclusion of these customized flavor blends in a number of different end products, in accordance with proper formulations, enhances manufacturers’ product portfolio.

Related Reports:

Flavor Systems Market by Type (Brown, Dairy, Herbs & Botanicals, Fruits & Vegetables), Application (Beverages, Savories & Snacks, Bakery & Confectionery Products, Dairy & Frozen Desserts), Source, Form, and Region - Global Forecast to 2023

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