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The US Citrus flavours market is grown globally

author:Naturalindate:2016-06-08 16:53Click: times

The health and wellness trend has had a massive impact on the food and beverage industry. As consumers look to eat organic, fresh, and clean-label products, manufacturers have had to scour for ingenious ways to cater to shifting preferences. Citrus fruits, such as lime, orange, tangerine, and grapefruit are riding on the coattails of the industry-wide health and wellness trend, witnessing strong demand in a variety of beverages and dairy products.

The global citrus flavours market was estimated to be worth US$ 8.1 billion in 2015. It is expected to witness a compound annual growth rate (CAGR) of 4.9 percent in the next decade, surpassing US$ 13 billion in revenues by 2025-end. The US and countries in Western Europe will be at the forefront of the global demand for citrus flavours.

citrus flavors market forecast

Market Share of Artificial Citrus Flavours Declining as Natural Variants Gain Traction

Historically, lime, lemon and orange have been a staple in the beverage industry. However, in the recent past, these flavours have made it to dairy products, confectionary, and savoury items. Lime flavoured chips, orange cookies and strawberry candies have been well-received in the market, prompting manufacturers to launch more innovative variants. 

Citrus flavours are available in both natural and artificial variants, with demand for the former gaining traction briskly among end-use industries. Natural citrus flavours accounted for nearly 73 percent revenue share of the global market in 2015, and the status quo is expected to remain so in the future as well. The demand for natural lime, lemon and orange are expected to expand by nearly 5 percent annually over the next decade.

Natural citurs flavors


Citrus Flavours Market Segmentation – By End-use Industry

The end-use industries that account for the bulk of demand for citrus flavours can be broadly categorised into beverages, savoury, confectionery, and dairy. Among these, demand for citrus flavours is highest in the beverages and dairy industries, with these two sectors accounting for nearly 60 percent revenue share of the global citrus flavours market in 2015.

citrus flavors market

In terms of revenues, the beverage segment of the global citrus flavours market was valued at nearly US$2.56 billion. During the period from 2015-2025, this segment is expected to increase at 5.4 percent CAGR to reach US$4.35 billion in revenues by 2025-end.

In the beverage industry, citrus flavours are widely used in making alcoholic beverages, coffee, tea, soft drinks, and nutritional drinks. Among these, demand for citrus flavours is strongest in the coffee and tea industry, with this segment accounting for nearly US$862 million in revenues in 2015. Alcoholic beverages are in the second-largest category and were estimated to be valued at US$802 million in 2015.

Dairy products are the second largest end-use segment for citrus flavours in terms of revenue contribution. Revenues from dairy products totalled nearly US$2.49 billion in 2015, with demand expected to grow at over five percent in the next decade.

Other key end-use industries, including confectionery and savoury, are also expected to witness strong growth rates. However, their revenue contribution to the global citrus flavours market will be considerably lower than beverages and dairy products segment.

Citrus Flavours Market Segmentation – By Regions

North America, Western Europe, and Asia Pacific are the three largest markets for citrus flavours in terms of revenues. While demand for citrus flavours has remained strong in North America and Western Europe, rising awareness and emergence of a burgeoning middle class are the key factors fuelling demand in Asia Pacific.

North America

The North America citrus flavours market was worth US$2.4 billion in 2015, with the US accounting for the majority of the demand. The introduction of new flavours, combined with growing use of citrus flavours in premium products is fuelling the growth of the market in the US. Product differentiation and brand position are prompting beverage companies, especially those in the spirits segment, to launch innovative offerings in the market, leading to a spike in demand for apple, pomegranate, and citrus flavours. As is the trend globally, beverage industry accounts for the highest revenue share in North America, closely followed by the dairy products segment.

Western Europe

Demand for citrus flavours is expected to witness highest growth rates in Western Europe. Germany, France, UK, and Spain are among the most lucrative markets for citrus flavour companies in Western Europe. Germany accounted for nearly one-fourth revenues of the overall Western Europe market in 2015, whereas France and the UK collectively accounted for nearly 35 percent market revenues.

Asia Pacific excluding Japan (APEJ)

Asia Pacific excluding Japan (APEJ) is the third largest market for citrus flavours in terms of revenues. During the period 2015-2025, demand for citrus flavours is expected to grow annually at nearly 5.5 percent, with India accounting for the bulk of revenues.

Citrus flavours have been used in India for centuries, and manufacturers have been quick to cash in on consumer familiarity and high demand. The launch of citrus flavoured soft drinks, juices, and nutritional drinks has resulted in the sustained growth of the market in India. Of the US$1.2 billion APEJ citrus flavours market, India accounted for nearly 37 percent revenue share in 2015. Other key markets in APEJ include China, Australia, and New Zealand.


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