The global bio vanillin market was estimated at USD 125.4 million in 2015. The market is expected surpass USD 226 million by 2024. Use of the product in an array of applications, like cosmetics, pharmaceuticals, and food & beverages can catapult demand over the forecast period (2016 - 2024). Popularity of bio vanillin in premium foods and perfumes may stimulate the industry. The product’s ability to mask bitter taste and infuse a pleasant flavor to medicines and foods could add to market demand. Support from food regulatory bodies in Europe and the United States (the FDA) may prove beneficial for market progress.
Customer awareness regarding health and regulatory norms that discourage the use of synthetic products will encourage growth. Moreover, widespread acceptance of bio vanillin can strengthen demand during the forecast period. This product exhibits minimal side effects on human health and offers a pleasant fragrance. These factors are expected to fuel the industry in the long run.
Vanillin is derived from the vanilla bean. It is often used in a broad range of applications. Synthetic alternatives are more commonly used than the natural vanilla extract. Bio vanillin however, is a healthier and safer alternative to the synthetic ones. Vanillin is divided into three categories based on the way they are manufactured. These include guaiacol-derived, natural vanilla extract, and lignin-based. Lignin-based vanillin is marked under premium products. It is more expensive than the other two, even though it is derived from natural sources, such as fruits, vegetables, straw, leaves, stems, and cereals.
Despite the absence of product differentiations, guaiacol-derived vanillin has a strong hold over the market because of its low price. This makes it difficult for bio vanillin to penetrate into an already established market.
Synthetic vanillin contributed to over 97% of the overall demand in 2015. It can grow at CAGR of over 7% during the forecast period. Natural alternatives, derived from orchid pods held less than 1% of the overall shares in 2015. Naturally derived vanillin is expensive primarily because of its authenticity and fine quality. The insufficient supply of natural vanillin fails to meet the demands of the global flavor industry. This supply deficit owes to limited yields and the need for a highly labor-intensive manufacturing process.
Chemical industries are striving towards substituting synthetic materials with renewable ones. This is done to acquire the ‘natural’ label from food regulatory bodies. Thus, most chemical industries are resorting to biotechnological methods. These methods pose minimal ecological threats and generate no toxic wastes. Also, the adoption of these methods enables chemical industries to replace synthetic products with bio-based ones. Besides being economical, biotechnological methods produce fewer by-products, require less energy, and emit lesser greenhouse gases.
The bio vanillin industry is still in its nascent stage. Some of the products have been approved by regulatory organizations. However, manufacturers claim their products to be natural. Certain environmental groups are claiming these products to be artificial since these are genetically engineered. It is imperative to manufacturers to position themselves as the producers of natural products.
Under regulation number 1334/2008, the European Parliament and the Council classify biotechnology-based vanillin as ‘natural flavoring’. This however, calls for the specification of the source from which it is derived. Bio vanillin is considered a ‘natural’ product by U.S. food legislations and the EU. It also fulfills the regulatory conditions of Health Canada, a public health department of the Canadian government. This will have a positive impact on the global market during the forecast period.
Most manufacturers of vanillin are entering into partnerships with synthetic biotechnology companies. The rationale behind such partnerships is the development of microbial cell technologies as new manufacturing platforms. Such improvements are directed towards the biosynthesis of high-value flavor or fragrance molecules. Such developments could boost industrial growth. Furthermore, stable prices coupled with strong industrial penetration can add to market demand.
The global bio vanillin market is split into applications and regions. Applications include fragrances, pharmaceuticals, and food & beverages. Food & beverages was the largest segment contributing to more than 65% of the total volume shares in 2015. Demand for foods with a sweet aftertaste will play a key role in this segment. Moreover, the use of flavors in juices may augment market demand in the forecast period.
‘Fragrances’ was the second largest market in 2015 with a market value worth USD 31 million. This segment held over 24% of the industrial shares and is projected to grow at an 8.3% CAGR from 2016 to 2024. These fragrances are used extensively in personal care products, cosmetics, detergents, and chemical formulations. Consumer awareness and the acceptance of biotechnologically derived products play a crucial role for the manufacturers in this segment.
The pharmaceuticals segment can expand significantly because of increasing product penetration. In terms of volume, this application segment is poised to grow at a CAGR over 8% in the forecast period. The use of flavorings in syrups and tablets will be a key driver.
Regions encompass North America, Europe, Latin America, Asia Pacific, and the Middle East & Africa (MEA). Asia Pacific dominated the global bio vanillin market with around 40% of global volume shares in 2015. Use of bio vanillin in the F&B (food and beverages) industries of countries, like India and China could propel demand. Emergent nations; like India, Malaysia, and China are predicted to witness higher demand for flavors from their bakery & confectionery industry. This would be a key factor to regional (Asian Pacific) expansion during the forecast period.
Geographically, the global bio vanillin market is segmented into Asia Pacific, Europe, North America, the Middle East & Africa, and Latin America. North America and Europe will exhibit steady growth over the forecast period. While North America will register a CAGR of over 5%, Europe will expand at a CAGR of more than 7%. Stringent regulations will play a crucial role in the growth of these markets. In these regions, bio vanillin is mainly used in applications, like fragrances and food & beverages.
Key players in the worldwide bio vanillin market are International Flavors & Fragrances, Apple Flavors & Fragrances Group Company Limited, Solvay SA, and Ennloys. New product launches along with partnerships to develop new technologies could play a key role in the growth of the industry. Evolva Holding partnered with International Flavors & Fragrances to manufacture biotechnology based vanillin, in 2013.
Research Support Specialist, USA