The Zhitong Finance App learned that according to a research report released by Northeast Securities, the international pattern of flavors and fragrances is highly concentrated, domestic industries are scattered, and enterprises are developing differently. The international market is mainly controlled by the four companies Walton, Firmenich, International Fragrances and Essences, and Dezhixin, and has the characteristics of high industry concentration. The production capacity of domestic enterprises is scattered, and concentration is low. Companies compete misaligned and focus on segmented fields. The degree of product homogenization is low, but the scale of business is generally small. As the focus of fragrance and fragrance consumption shifts to the Asia-Pacific region, international giants continue to increase their investment in China and the Chinese market. The main downstream application industries of flavors and fragrances in China are the food, daily chemicals and tobacco industries, accounting for 63.4%, 17.5%, and 15.5% respectively, dominated by the food industry.
Flavors and fragrances are used in small amounts and are very effective. Fragrances are organic compounds that can be felt by smell or taste. They are mainly used to blend flavors into essences or used directly as food additives. The natural fragrance conforms to the concept of healthy green color and has distinctive regional production characteristics. Synthetic fragrances use chemical raw materials, which are abundant and easy to obtain, and dominate the current fragrance market. Currently, the main fragrance varieties include products such as linalool, citral, menthol, vanillin, and maltol. Essence is a mixture of fragrances and excipients with a specific aroma. It is the crystallization of science and art. It has the characteristics of small dosage and great effectiveness, and formula mixing has extremely high barriers.
The international pattern of flavors and fragrances is highly concentrated, and domestic industries are scattered and enterprises are developing differently. International flavor and fragrance giants have a long and deep history. They have achieved a high monopoly with essences as their core products. They maintain their leading position by controlling the varieties of key essences and maintaining high R&D investment. The market is mainly in the hands of the four companies Walton, Fenmei, International Fragrances and Fragrances, and Dezhixin, which are characterized by high industry concentration. Domestic enterprises have scattered production capacity and low concentration. Companies compete misaligned and focus on segmented fields. The degree of product homogenization is low, but the scale of business is generally small. At the same time, domestic companies mainly focus on spices, and there is a clear difference between R&D investment and gross margin. With high R&D investment, companies represented by Xinhecheng and Huabao Co., Ltd. lead their peers in product profitability, comparable to international giants.
The consumer market for flavors and fragrances is developing steadily, and demand for downstream products is diversified. The global flavor and fragrance market grew from 24.1 billion US dollars in 2015 to 29.9 billion US dollars in 2022, with a CAGR of 3.13%. Asia accounts for 40%, and has become the main global consumption engine. As the focus of fragrance consumption shifts to the Asia-Pacific region, international giants continue to increase their investment in China and the Chinese market. During the 13th Five-Year Plan period, international giants established a number of world-class fragrance factories in China's Jiangsu and Zhejiang regions. The main downstream application industries of flavors and fragrances in China are the food, daily chemicals and tobacco industries, accounting for 63.4%, 17.5%, and 15.5% respectively, dominated by the food industry.
Risk warning: The company's production capacity construction falls short of expectations, product prices have dropped sharply, etc.