Encapsulated Fragrances Market Research Report and Outlook by 2028

The market for encapsulated fragrances is projected to expand from US$ 1,265.06 million in 2022 to US$ 1,670.65 million by 2028, reflecting a compound annual growth rate (CAGR) of 4.7% from 2023 to 2028.

The increasing preference for long-lasting scents and the growing interest in sustainable technologies have driven innovations in encapsulated fragrance technology. Leading companies in this sector are actively launching products that incorporate advanced technologies to meet the rising demand for eco-friendly options. For example, in December 2021, Givaudan SA introduced PlanetCaps, a new encapsulated fragrance designed for laundry applications. This innovative product offers enduring fragrance experiences within a biodegradable and bio-sourced system suitable for fabric softeners. Furthermore, in May 2022, Iberchem unveiled its own line of biodegradable encapsulated fragrance capsules, which are composed of at least 60% bio-based materials. This launch was aimed at addressing the increasing demand for biodegradable fragrance solutions across various applications. The advancement of sustainable encapsulation technologies presents significant growth opportunities for the market. Additionally, major players in the encapsulated fragrances sector are investing in research facilities and technological advancements. For instance, Givaudan SA inaugurated an integrated fragrance encapsulation center in Singapore in December 2022, with an investment of CHF 30 million over five years to enhance encapsulation technology and meet the rising consumer demand for long-lasting fragrance experiences across multiple applications. Therefore, the ongoing innovations in encapsulated technology are expected to positively influence the growth of the encapsulated fragrances market in the near future.

The global encapsulated fragrances market is categorized by product type into fragrance blends, aroma chemicals, and other categories. The 'others' segment is anticipated to experience the fastest growth during the forecast period. This segment includes essential oils and natural extracts, which are vital in the cosmetics industry for imparting pleasant scents to various products. Essential oils not only provide fragrance but also serve as active agents that offer numerous skin benefits. The increasing awareness of natural ingredients has led to a rise in their application across different sectors. Some of the most sought-after essential oils include lavender, floral oils, citrus, eucalyptus, and tea tree oil. Additionally, popular fragrance compounds such as citral, geraniol, linalool, citronellol, and limonene are gaining traction. The demand for naturally derived fragrance extracts has surged due to the growing preference for natural ingredients in personal care and cosmetic products. Regulatory bodies like the US Food and Drug Administration (FDA) and the European Union's Regulation (EC) No 1223/2009 have established guidelines for the safe use of cosmetic ingredients. Stringent regulations concerning certain synthetic fragrances, due to health concerns like skin allergies, have further increased the demand for naturally sourced fragrances, thereby positively impacting the growth of the encapsulated fragrances market, particularly in the 'others' segment.

In 2022, North America accounted for the largest share of revenue in the global encapsulated fragrances market, driven by a high demand for perfumes, deodorants, lotions, shampoos, and soaps, alongside a growing emphasis on personal hygiene, grooming, and appearance. The United States was the leading market within North America. Factors such as shifting consumer preferences, a heightened demand for long-lasting fragrance products, and advancements in encapsulation technology have fueled the demand for encapsulated fragrances in the US. Moreover, the increasing popularity of personal care and cosmetic products has contributed to the rising demand for encapsulated fragrances. According to the NPD Group, sales of core skincare products in the US, including facial cleansers, creams, and serums, saw an increase of 15-24% in 2021, with the overall skincare category growing by 18% during the same year. Various industries in the US have extensively explored microencapsulation technology, particularly in home care products. These products often contain biologically active ingredients that are sensitive to temperature, pH, light, and oxidation, which can lead to undesirable reactions that diminish their effectiveness or degrade cosmetic products during manufacturing. Encapsulation technology allows for a prolonged release of fragrance, enhancing the sensory experience. Consequently, the advantages of encapsulated fragrance technology have led to its increased use in home care and personal hygiene products, thereby propelling the growth of the encapsulated fragrances market.

Key players in the global encapsulated fragrances market include Firmenich SA, Givaudan SA, Ingredion Inc, International Flavors & Fragrances Inc, MikroCaps doo, Symrise AG, Glatt GmbH, Insilico Medicine Inc, Follmann GmbH and Co KG, Inc., and Ashland Inc. These companies are committed to delivering high-quality products that meet customer needs, investing significantly in research and development initiatives.

The overall size of the global encapsulated fragrances market has been determined through a combination of primary and secondary research methods. The research process began with extensive secondary research utilizing both internal and external sources to gather qualitative and quantitative data related to the encapsulated fragrances market. Additionally, numerous primary interviews were conducted with industry participants to validate the findings and gain deeper analytical insights. Participants included industry experts such as VPs, business development managers, encapsulated fragrances market intelligence managers, and national sales managers, as well as external consultants like valuation experts, research analysts, and key opinion leaders specializing in the encapsulated fragrances market.