Top 10 Keywords for the Global Flavor and Fragrance Industry in 2024

Exploding Topic defines AI perfume as “any perfume created using AI technology, specifically AI algorithms that analyze large amounts of data on perfume ingredients, customer preferences, and market trends to produce unique scent combinations.”

In the report, the platform cites startup EveryHuman, which is said to offer a service called “algorithmic perfume” where EveryHuman’s AI analyzes users’ responses and creates personalized perfumes based on that data. Exploding Topic also mentions Google’s Cloud’s efforts in “digital scent,” which helps identify currently unknown scents by analyzing large amounts of data.

In terms of predicting trends in AI perfume, Exploding Topic reports that searches for “sensory AI” have grown 380% in the past 24 months. The platform describes sensory AI as “an AI system that can learn from multiple sensory inputs: smell, hearing, vision, etc.” An example of this is Meta’s ImageBind AI model, which is said to learn from six types of sensory data with the goal of generating multi-sensory content.

(2) AI-driven flavors

AI and precision fermentation are creating new flavor development options.

Mindy Yang, co-founder and chief engagement officer of the World Taste & Smell Association (WTSA), said food technology is on the verge of major innovation, driven by changing consumer preferences, technological advances and a growing focus on health and sustainability.
“Looking ahead to 2025 and beyond, there are several key trends that will impact our experience of flavors and food,” Yang explained.
“Artificial intelligence (AI) is transforming the creation of unique and personalized flavors. Companies like Osmo, Tastewise and NotCo use AI to develop signature flavors that match individual preferences and emerging market trends.”
“AI is not only a tool, but a catalyst for creativity in the food industry, allowing us to explore flavor combinations that were previously unimaginable,” added Alex Woo, CEO of W20 Food Innovation and WTSA board member.
Precision fermentation is another tool with the potential to revolutionize the production of high-value and rare sweeteners, flavors and proteins, Woo continued. “This technology allows for the creation of ‘natural’ ingredients that are otherwise difficult to sustainably source. Precision fermentation meets consumer demand for natural products while addressing sustainability issues.”
The future of flavoring and food technology is full of innovation and promise, Yang said. "From AI-driven flavors and precision fermentation, to natural sweeteners and personalized nutrition, these trends will redefine our culinary experience. We are entering a new era of food, where technology and nature combine to create delicious, healthy and more sustainable flavors."

2. Biosynthesis

Synthetic flavors: creating scents and flavors with microorganisms

Isobionics is a biotech company from the Netherlands that specializes in synthetic biological production of natural essential oils and flavors for the food, perfume and detergent industries. On the other hand, it is estimated that Evolva from Basel produces up to $500 million worth of synthetic vanillin flavors for the industry each year. The use of bacteria and yeast to produce very important ingredients such as patchouli, valencene and vanillin means that these industries will not collapse due to excessive demand and poor harvests of these essential oils.

Patchouli is one of the essential oils that make up traditional perfumes, and today's perfume industry still strongly relies on its properties in cosmetics, air fresheners and certain laundry detergents. Traditionally, it is harvested from steam extraction of the mint-like plant Pogostemon cablin, which is grown in many countries such as India and China.

Historically, patchouli was a symbol of luxury and wealth, and supposedly originated as an insect repellent in the shipping of fine silk and textile trade along the Silk Road in the 18th and 19th centuries. As the luxury trade increased in the 19th century, Victorian perfumes became increasingly sophisticated, using many other expensive essential oils on top of patchouli.

Dustin Hoffman as Parisian perfumer Giuseppe Baldini in the 2006 film Perfume: A Murderer’s Story, directed by Tom Twyker.

However, the expansion of demand for perfume (no longer considered a luxury for the upper classes of society) meant that the industry began to rely on less reliable sources of essential oils from traditional farming and extraction techniques. In fact, a sudden shortage of patchouli after a crop failure caused prices to soar in Western markets, halting many manufacturers who relied on patchouli.
Now, biotechnology has shown that none of this has to be so expensive. Synthetic alternatives to traditional steam-extracted plant materials have significantly reduced the cost of essential oils. Isobionics is one such biotech that is providing the industry with cheaper, easier to produce essential oils for perfume and flavoring.

Some of the other popular essential oils produced by Isobionics through bacterial or yeast fermentation (Source: Isobionics)

Their key products include valencene, a very common orange-flavored beverage additive; beta-elemene, produced from ginger and used for flavoring; and oleanone, another beverage additive extracted from grapefruit. Isobionics insists that these are all-natural additives for the food and beverage industry as they are all secondary plant metabolites.
Similarly, other aromatic and popular raw materials such as vanillin extracted from vanilla can cost around $1,500 per kilogram. Switzerland-based Evolva is another biotech company responding to this industry concern.

Source: Evolva

The synthetic production of vanillin uses fermentation with genetically modified yeast strains, which significantly reduces costs to around $10-20 per kilogram. This explains why 99% of the vanilla extract market now relies on biotech extraction rather than vanilla bean sources, which Evolva estimates is worth €573 million.
Evolva has done this using a variety of gene editing techniques. By inserting specific genes into yeast, they can exploit this inexpensive biosynthesis of the desired compound during fermentation. By silencing all other non-essential biosynthetic pathways, the yield of the product can be increased.
Finally, Evolva has developed a proprietary “toolbox” of biomolecular modification techniques to streamline the process of extracting the product from the fermentation broth. These include glycolysis, the use of cytochrome P45 enzymes and the insertion of “transporters” to allow efficient leakage of the product from the yeast cells, of which Evolva has an extensive library.

Spices sold in closed markets (also known as Souq or “Medina” in the Maghreb region of North Africa – i.e. Morocco, Tunisia, etc.) (CC: William Neuheisel)
Other projects include the search for alternative and sustainable sources of sandalwood (the standard incense of the swamps) and the spice saffron, which is unusually expensive and reminiscent of the crowded and fragrant depths of the markets in the Mahgreb region of North Africa. Given its desirability in cooking, other alternatives such as turmeric (a member of the ginger family) or the odorless safflower simply do not suffice.

However, despite these benefits, competition is fierce, with one major competitor being Amyris in the US, and opponents also including anti-GMO rallies who do not accept this alternative method of producing natural essential oils, but that is another completely different discussion.

3. ESG

ESG Research Highlights: Making Flavors and Scents

At Domini, we conduct proprietary internal research to assess the social and environmental performance of our investments. Our in-depth ESG research and criteria help create value not only for the portfolio, but also for people and the planet. During our research, we found many innovative initiatives worth sharing.

Givaudan (held by Domini International Opportunity Fund)

In the evolving flavors and fragrances industry, a key issue that stands out is the impact on biodiversity. While the industry has long been associated with sensory experiences, the pursuit of unique flavors and fascinating fragrances has had a significant impact on the world's ecosystems. Unless done in a sustainable manner, harvesting primary raw materials often leads to habitat destruction, invasive species and chemical pollution, issues that these companies must address.
Givaudan, a Swiss-based manufacturer of fragrances and flavors, is a model of responsible corporate citizenship with a commitment to environmental protection, ethical sourcing, and community development. The company serves a variety of industries, including food and beverage, consumer products, and fragrances. About 85% of raw materials are biodegradable, and impressively, 57% are classified as renewable materials by 2022.
The company has obtained the Fair Life certification, which guarantees a fair price for products such as yerba mate, guarana, and acai in 2021 and 2022, and provides a Fairtrade premium for community development. In Brazil, Givaudan works with local companies to grow guarana using regenerative agricultural methods, emphasizing soil conservation practices such as pruning, using green manure instead of fertilizers, and cover crops instead of herbicides. In Sulawesi, Indonesia, they actively support sustainable smallholder patchouli businesses by training producers and operators on environmentally friendly agricultural and distillation methods. In 2021, Givaudan launched its Sourcing4Good program, solidifying its partnerships with experts and communities in its priority natural supply chains. They are actively strengthening local practices through 25 ongoing projects across various natural raw material supply chains. Their commitment also extends to Egypt, helping 240 jasmine producers adopt 100% organic filtration systems, insect traps, and local compost production. This initiative not only promotes responsible agriculture, but also helps environmental protection.
Chemical manufacturers and distributors have a responsibility to take action to minimize the impact of their operations and customer product use on biodiversity. Pollution caused by these chemicals is often less visible and has a later onset. For example, they can contaminate waterways, affect soil and organisms in the area, and cause public health issues. Unsustainable agricultural practices harm local biodiversity and put many plants and animals at risk of extinction.
Therefore, environmentally friendly solutions, such as alternative bio-based products, that help eliminate dependence on petrochemical raw materials should be at the forefront of innovation decisions in the chemical industry. In an era when sustainability is key to the future, fair trade practices, upcycling, responsible sourcing, community empowerment, and regenerative agriculture are the blueprints for businesses seeking to make a positive impact on the world.
4. Digitalization

Uncovering the digital revolution in edible and daily flavors

The flavor and fragrance industry profoundly impacts our daily lives. It enhances our sensory experiences, from the enchanting aroma of toasted bread to the alluring scent of flowers. It enriches our enjoyment of food and plays a vital role in cosmetics and personal care, where scents evoke emotions and leave a lasting impression. The industry is an alchemist, turning ordinary products into extraordinary sensory experiences.
Let’s focus on the dynamic digital environment and its profound impact on global business. Digitalization has become essential in our interconnected world and is transforming industries. From revolutionary e-commerce platforms to social media that connect the world, the digital realm offers unparalleled opportunities for growth and innovation. The flavor and fragrance industry recognizes this potential and is actively using digitalization to improve operations, engage customers, and promote sustainability.
How the industry is embracing digitalization to succeed in today’s dynamic business environment. From leveraging artificial intelligence and big data analytics to streamline manufacturing and product development, to enabling e-commerce platforms for direct consumer access and business-to-business procurement platforms that seamlessly connect suppliers and buyers, digitalization brings many benefits and opportunities. We will uncover these advancements, simplify complex concepts, and reveal their impact on the industry.
Understanding Digitalization in the Flavor and Fragrance Industry
Digitalization integrates digital technologies into our lives and industries, leveraging computers, software, and data-driven systems to streamline processes, increase efficiency, and uncover opportunities. It has the potential to revolutionize industries including flavors and fragrances. Traditionally known for its artistry, the industry is now undergoing a digital transformation. Digitalization optimizes operations, creates personalized experiences, and brings innovative solutions that enable manufacturers and perfumers to explore new horizons and push boundaries.
Key Drivers Behind Digital Transformation

Evolving Consumer Demands: Plays a major role. In today’s fast-paced world, consumers seek products that match their preferences and lifestyles. Digitalization enables us to collect and analyze large amounts of data, gaining valuable insights into consumer preferences and trends. This understanding enables manufacturers to develop customized flavors and fragrances that deeply resonate with the target audience, providing a personalized and immersive experience.
Competitive Pressure: Is a key driver of digitalization in the industry. As competition intensifies, companies strive to stand out and gain an advantage. Digital technology provides the means to achieve this goal. Through data analytics, AI, and machine learning, companies can uncover hidden patterns, identify market gaps, and develop innovative products faster and more efficiently than ever before.
Technological advances: are driving the digital transformation of the flavors and fragrances industry. With the rapid development of cutting-edge technologies such as IoT devices, automation, and robotics, manufacturers can optimize production, reduce costs, and enhance quality control. For example, smart sensors monitor key environmental factors throughout the supply chain, ensuring consistent quality and freshness that exceeds customer expectations.
Embracing digital transformation

Now, let’s dive into the exciting world of digital tools and technologies that are revolutionizing the field. The flavors and fragrances industry has not been immune to the advancements brought about by technology. It has adopted a variety of digital tools and technologies to enhance operations and stay at the forefront of innovation.
The role of data analytics and AI

Data analytics and artificial intelligence (AI) are powerful allies in improving product development, market research, and customer insights. By analyzing large amounts of data, companies gain valuable insights into consumer preferences, market trends, and emerging patterns that inform the creation of flavors and fragrances that match evolving needs. AI algorithms can analyze consumer feedback, social media conversations, and sensory data to reveal hidden patterns and preferences. This enables companies to customize their strategies and offer flavors and scents that appeal to consumers.
Digital platforms for marketing, sales and distribution purposes

Digital platforms have revolutionized the marketing, sales, and distribution of flavors and fragrances. These platforms seamlessly connect producers with consumers around the world, streamlining the process of displaying and distributing products. Social media, e-commerce, and mobile applications provide companies with direct ways to engage with consumers, build brand awareness, and collect feedback. For example, Florasquare, a well-known digital sourcing platform, connects more than 300 suppliers around the world. Through Florasquare, buyers can quickly request quotes from preferred suppliers, thereby increasing efficiency and seamless business interactions.
Accuracy, Speed, and Efficiency

A significant benefit of digital tools in the flavors and fragrances industry is their ability to improve accuracy, speed, and efficiency. Traditional methods of creating flavors and fragrances rely heavily on trial and error, which can be time-consuming and expensive. With the advent of digital tools such as computer-aided molecular design and virtual scent simulators, the process has become more streamlined.
As we conclude this section, we have seen how the flavors and fragrances industry has embraced digital transformation. Data analytics, artificial intelligence, and digital platforms have reshaped the way products are developed, marketed, and distributed. These advancements enhance the overall customer experience, allowing companies to stay ahead of the competition.
Overcoming Challenges and Looking Ahead

Digitalization is transforming industries around the world, and the flavors and fragrances industry is no exception. While it presents challenges, this section will address these and highlight the importance of cybersecurity and data privacy. Don’t worry though! The flavors and fragrances industry is full of exciting possibilities. So let’s dive into what the future holds for this evolving industry.
Complex Manufacturing Processes

The flavors and fragrances industry faces significant challenges in digitalization due to its complex manufacturing processes. Creating flavors and fragrances requires a complex combination of ingredients and meticulous attention. The shift to digital platforms can be overwhelming and require complete digitalization of the supply chain and manufacturing processes. However, once these challenges are overcome, the industry can improve efficiency, strengthen quality control, and streamline operations.
Vast and Diverse Data

The flavors and fragrances industry faces the challenge of handling the vast and diverse data it generates. This data, which includes recipe details and consumer feedback, contains valuable information. Effectively leveraging this data requires powerful data management systems and advanced analytics. Additionally, integrating data from different sources such as suppliers, production facilities, and market research agencies adds complexity. However, overcoming these barriers can enable the industry to gain valuable insights, promote innovation, and grow its business.
Cybersecurity and Data Privacy

In the digital flavor and fragrance industry, protecting sensitive information and safeguarding intellectual property are critical. Increased network connectivity and data exchange increase the risk of cyber threats and intrusions. Companies must invest in strong cybersecurity measures to maintain the integrity and confidentiality of their digital assets. In addition, implementing a strict data privacy policy is essential to comply with regulations and build trust with consumers and partners. The oil and gas industry can reduce risks and establish a secure digital environment by taking a proactive approach to cybersecurity and data privacy.
The industry faces challenges in digitalization due to the complexity of manufacturing processes and the management of large amounts of data. However, by addressing these challenges and prioritizing cybersecurity and data privacy, the cybersecurity industry will reap huge success.
5. Neurobiology

Neuroscience in the Fragrance Industry

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In recent years, neuroscience, the study of the nervous system and brain, has become a transformative force in understanding human behavior. With applications expanding from the laboratory to fields such as marketing and cosmetics, it is now used as a sophisticated tool to analyze how people perceive and react to different sensory stimuli.
"By exploring the complex brain processes behind olfactory perception, companies can design more effective products and campaigns and establish deeper, more personal connections with consumers," explains neuroscientist Vasco Marques da Silva, who currently leads Iberchem's Wavemotion® project investigating neuroscience in perfumery.
"This innovative approach not only optimizes market strategies but also enriches the consumer experience, transforming the world of perfumery into a fascinating area of ​​applied neuroscience research. The brain is a complex structure involving a large number of connections and morphologies that work together to process cognitive and sensory tasks. At a clinical level, there is a range of devices used not only for diagnosis but also to aid in the selection of treatments related to brain function - these are often referred to as brain imaging devices. Within this group, techniques such as electroencephalography (EEG), functional magnetic resonance imaging (fMRI) or functional near-infrared spectroscopy (fNIRS) have been widely used in a wide variety of scenarios.
The human olfactory capacity is still not fully understood and much remains to be discovered, not only about the recognition and identification of different odor components in the brain, but also about possible emotional and memory outcomes. .
Considering the pros and cons of each, these three techniques have the potential to better assess and understand odor processing and ultimately be used for odor evaluation. The term "neurocosmetics" is gaining traction as the cosmetics industry makes claims about the effects of different products on the end consumer. The brain imaging techniques described here can help explore this concept by providing reliable and relevant scientific data that predicts consumer responses.
These options are becoming more versatile and user-friendly in a variety of contexts, despite being complex instruments with a lot of engineering work behind them. This makes the field of neuroscience more accessible to the fragrance and cosmetics industry. ”

6. Multimodal Perception

Fresh Sounds: Creating Multisensory Experiences in Fragrance

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The current fragrance industry faces the challenge of innovating to increase product appeal and engage consumers. Integrating multisensory elements into the fragrance experience has the potential to drive this innovation forward. This study proposes a new approach to characterize sounds that evoke a sense of freshness to a fragrance. Three experiments were conducted to explore the transferability of identified sound features to certain fragrance experiences. Experiment 1 evaluated selected sounds to identify auditory parameters that effectively triggered the primary freshness attribute. Building on this, Experiment 2 used the Implicit Association Test (IAT) to examine the freshness and brand value of original soundtracks. Experiment 3 examined whether the music effectively modulated the implicit olfactory experience of two commercial fragrances. The results showed that the music successfully induced a specific reinforcement effect that led to an intrinsic perception of the freshness of the fragrance. These results reveal how background music enhances the perception of freshness attributes (such as cool, blue, and light) in the fragrance experience, the consistency and difference between self-report and implicit measures, and the practical application of multisensory strategies by cosmetic companies.

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7. Sustainability

The Impact of Sustainability on the Flavor and Fragrance Industry

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Driven by the growing demand for sustainability, the flavor and fragrance industry is undergoing a revolution. Consumers are aware of the environmental and social impact of their purchasing decisions, prompting manufacturers to invest in a circular economy. This blog explores the transformative power of sustainability in the flavor and fragrance industry.

The Shift to Sustainability

Natural and Organic Ingredients: Consumers seek authentic, environmentally friendly natural flavors and fragrances, driving demand for natural extracts. The trend for organic and natural ingredients has gained momentum. These ingredients are free of harmful chemicals and offer purer, more sustainable alternatives. They meet consumer preferences for clean, healthy products and contribute to a healthier planet.
Supply Chain Transparency: The company prioritizes responsible sourcing, fair labor practices, and environmentally friendly agriculture. At the heart of sustainable flavors and fragrances lies ethical sourcing. This means sourcing ingredients from responsible suppliers that prioritize environmental protection and fair labor practices. Each fragrance, from vanilla grown in sustainable rainforests to essential oils harvested with care, contributes to a harmonious and responsible composition.
Reduced Waste and Emissions: Manufacturers use circular economy principles to minimize waste and carbon footprint. From packaging materials to unused ingredients, the flavors and fragrances industry generates a significant amount of waste. Sustainable practices aim to minimize waste through efficient production processes, recycling programs, and innovative packaging solutions. By reducing waste, companies contribute to environmental protection and improve their bottom line.
Innovative Production Methods: Advanced technologies make production processes more efficient and sustainable. The flavors and fragrances industry is increasingly adopting innovative production methods to reduce environmental impact and increase efficiency. These advanced technologies have changed the way flavors and fragrances are made, extracted, and processed.
Sustainable Packaging: Biodegradable, recyclable packaging reduces environmental impact. Packaging plays a vital role in the sustainability of flavors and fragrances. Eco-friendly materials such as recycled paper, biodegradable plastics, and refillable containers are gaining popularity. Sustainable packaging reduces environmental impact and improves brand image and consumer perception.
Reduced Carbon Footprint: The industry’s carbon footprint is gaining attention. Sustainable practices such as energy-efficient production facilities and reduced emissions from transportation can help mitigate climate change. Companies can contribute to a cleaner, healthier planet by adopting sustainable practices.
Sustainable Market

According to recent research, the flavors and fragrances market is estimated at $30.61 billion in 2023 and is expected to grow at a compound annual growth rate (CAGR) of 5.4% from 2024 to 2030.
On March 11, 2022, Forbes cited a report by First Insight and the Baker Retailing Center at the Wharton School of the University of Pennsylvania, stating that Generation X consumers are willing to pay a premium for sustainable products, with nearly 90% willing to spend 10% or more. This shift is largely influenced by Generation Z, who strongly prefer sustainable brands and encourage their elders to do the same.
Industry Response

The flavor and fragrance industry is increasingly responding to the growing demand for sustainable products. Here is a breakdown of the main industry responses:

1. Green Chemistry

Reducing Toxic Substances: Companies are investing in research and development to develop environmentally friendly chemical processes to minimize the use of hazardous substances.

Developing Sustainable Alternatives: This includes exploring natural alternatives to synthetic ingredients and finding ways to reduce the environmental impact of production processes.

2. Biodiversity Conservation

Promoting Sustainable Agriculture: Companies are working with suppliers to ensure that ingredients used in their products come from sustainable agricultural practices.

Protecting Ecosystems: This includes supporting initiatives to protect biodiversity and maintain healthy ecosystems such as rainforests and wetlands.

3. Stakeholder Engagement

Transparency: Companies are being more transparent about their sustainability practices, sharing information with consumers, suppliers and other stakeholders.

Collaboration: We work closely with suppliers, customers and non-governmental organizations (NGOs) to develop sustainable solutions and address environmental challenges.

4. Certifications and Labels

Industry-Recognized Standards: Companies seek certifications and labels that demonstrate their commitment to sustainability, such as Fairtrade, Rainforest Alliance and Organic.
Accountability: These certifications provide a framework for accountability and help consumers make informed choices.

5. Research and Development

Investing in Sustainable Technologies: Companies invest in research and development to develop new sustainable technologies and materials.
Innovation: This includes exploring alternative sources of raw materials, improving production processes, and reducing waste.

By implementing these strategies, the flavors and fragrances market is working towards a more sustainable future while meeting consumers’ growing demand for eco-friendly products.
Challenges and Opportunities of Sustainability

Challenges:

Higher costs of sustainable practices

Complex supply chain management

Educating consumers on the benefits of sustainability

Regulatory compliance barriers

Opportunities:

Market differentiation through sustainability

Innovation in sustainable product development

Enhanced brand reputation and customer loyalty

Collaboration among industry stakeholders

New opportunities in the flavors and fragrances industry

Sustainability is reshaping the flavors and fragrances industry. Embracing eco-friendly practices, responsible sourcing, and innovative production methods ensures a fragrant future. In essence, the role of consumers is critical in driving sustainability in the flavors and fragrances industry. By choosing products from brands that prioritize sustainable practices, we can support companies that are making a positive impact on the planet. Let’s embrace sustainable flavors and fragrances to create a future where sensory pleasure and environmental responsibility are in harmony.

References:

[1] AI Perfume Named Leading Trend by Exploding Topics for September 2024 | Perfumer & Flavorist (perfumerflavorist.com)

[2] Technology-Driven Flavors - IFT.org

[3] Synbio Perfumery: Making Smells and Flavors with Microbes (labiotech.eu)

[4] Highlight from our ESG Research: Crafting Flavors and Fragrances - Domini

[5] Unveiling The Digital Revolution In Flavours & Fragrances - TechBullion

[6] Neuroscience in the fragrance industry (cosmeticsbusiness.com)

[7] Rodriguez, Brayan & Cantu, Monique & Reyes, Luis & Pereira, Vanessa & Santos, Larissa & Reinoso Carvalho, Felipe. (2024). Sound of freshness: Crafting multisensory experience in perfumery. Food Quality and Preference. 119. 105228. 10.1016/j.foodqual.2024.105228.

[8] (22) The Impact of Sustainability on the Flavors and Fragrances Industry | LinkedIn

[9] Perfume supply chain management: From Field to Fragrance: The Business of Perfume Supply Chains - FasterCapital

[10] Inspiring the Scenthusiasts: Five Years of Teaching Design With Scents | Perfumer & Flavorist (perfumerflavorist.com)