Natural flavour trends across categories

Naturally sourced flavours have become increasingly important, and a growing number of companies has moved to remove artificial flavours from their products, including market leaders like Nestlé 4 and Danone 5 .

A 2016 Nielsen survey found that about three-quarters of global consumers were worried about the effect of artificial ingredients on their health 6 - and artificial flavours topped their concerns, with 62% of respondents saying they aimed to avoid them.

According to the Netherlands’ CBI, the Centre for the Promotion of Imports from developing countries:

“Natural flavours are in high demand in the European market partly because of their relatively low costs and rising consumer demand for natural products. They have become mainstream in some European countries, partly because of the burgeoning organic food market and rising demand for processed foods.” 7

The latest data from Foodtrending shows significant growth of the market in Europe for natural flavours, industrial seasonings and flavouring materials – all of which are considered natural flavours. The market is still expected to grow throughout 2020. 8

Seasonings: Mixtures and blends of herbs, spices. Used widely in snacks, meals, and meat products. Europe, as defined. Seasonings: Mixtures and blends of herbs, spices. Used widely in snacks, meals, and meat products. Industrial seasoning, herbs & spices Europe, as defined.

Industrial seasoning, herbs & spieces

2018 18 $m

18 $m 486 $m FLAVOURS (NATURAL) Confectionery Snacks

Soft drinks CAGR 2018 - 2020

3.7%

4.4%

9.5%

19 $m ings: Mixtures and bl 2019 ends of herbs, spices. Used widely in snacks, meals, and meat product 519 $m s. , as defined. 19 $m

trial seasoning, herb 19 $m s & spieces 2020 21 $m

0 50 100 150 200 250 300 486 $m 350

Confectionery Snacks 530 $m

FLAVOURS (NATURAL) 400 450 500 Confectionery

Snacks

Soft drinls Soft drinks 550 600

NOTES: Industrial food ingredients only. Usage via retail and foodservice channels excluded, except where in the form of an industrially-manufactured food product.

CAGR 2018 - 2020

Zeros = little discernable usage.

Value 3.7% s converted at average exchange rates. All nu 4.4% mbers rounded 9.5%

519 $m NOTES: Source: Foodtrending 2020 9 Natural flavours: Flavouring substances from plant or Indust raw mat rial food erial ingr s. Pr edie e n domina ts only. tely used in soft drinks and dairy products.

Europe, as defined. Usage via retail and foodservice channels excluded, except where in the form of an industrially-manufactured

Natural flavours 530 $m food product. FLAVOURS (NATURAL) CAGR 2018 - 2020 Zeros = little discernable usage. Confectionery 7.2%

200 250

8 Confection 0 1 ery 2 300 350 400 450 40 $m

Sn 29 $m acks Soft drinls 500 550 600 Values converted at average exc Snacks hange rates. All numbers rounded Soft drinks

282 $m 6.1%

6.0%

18 $m Confectionery 3.7% 2018 Se 18 $m asonings: Mixtures and blends of herbs, spices. Used widel 486 $m y in snacks, meals, Snacks Soft drinks and meat products. 4.4% 9.5%

Europe, as defined.

2019 In 19 $m dustrial seasoning, herbs & spieces 519 $m NOTES: 19 $m Industrial FLAVOURS food ingre (NATURAL) dients only. CAGR 2018 - 2020

Usage via retail and foodservice channels excluded,

2020 2018 19 $m 21 $m 18 $m 18 $m 530 $m 486 $m except where in food product. Zeros = little dis Confectionery Snacks Soft drinks the form cernable of an i usage. ndust 3.7% 4.4% 9.5% rially-manufactured 0 50 19 $m 100 150 200 250 300 350 400 450 500 550 600 Values converted at average exchange rates. 2019 19 $m Confectionery Snacks Soft drinls All numbers rounded Natural flavours: Flavouring substances from plant or raw materials. Predominately used in soft drinks and dairy products. Europe, as defined. 519 $m NOTES: Industrial food ingredients only.

Usage via retail and foodservice channels excluded,

2020 Natural fla Europe, as 19 $m 21 $m v d o e urs: fine Fl d. avouring substances from plant or raw materials. Predominately used in soft drinks and dair Natural flavours 530 $m except where in the form of an i food product. Zeros = little discernable usage. y n pr du oduct striall s. y-manufactured 0 50 100 150 200 250 300 350 400 450 500 550 600 Values converted at average exchange rates.

Natural flavours FLAVOURS All number (NATURAL) s rounded CAGR 2018 - 2020 Confectionery Snacks Soft drinls Confectionery 7.2%

8 1 0 2 Snacks 6.1% 40 $m Soft drinks 6.0% 29 $m Natural flavours: Flavouring substances from plant or raw m 2 at 82 eri $m als. Predominately used in soft drinks and dairy products.

Europe, as defined.

44 $m i , ngs: as d Mixtur efined. es and bl 2 0 1 9 end Na s of t h 31 ura erbs $m l fl , sp a ic vours es. Used widely in snacks, meals, and meat product 3 s. 01 $m

trial seasoning, 0 8 herbs & s 46 $m 40 $m pieces 0 2 0 1 33 $m 29 $m 2 2

0 9 1 0 2 50 44 $m 31 $m 100 150 486 $m 200

Confectionery Snacks FLAVOURS (N 282 $m ATURAL) 316 $m 250 Confectionery 300 Snacks

Softdrinls Soft drinks 350

301 $m

NOTES:

Industrial FLAVOURS food ingred (NATURAL) ients only. CAGR 2018 - 2020 Usage via ret Confectionery ail and foodservice chan 7.2% nels excluded, except Snacks where in the form of an indust 6.1% rially-manufactured food produ Soft drinks ct. 6.0% Zeros = little dis CAGR 2018 - 2020 cernable usage.

Values converted at average exchange rates.

All numb NOTES: 3.7% ers rounded Indu 4.4% strial food ingredients only. Usa 9.5% ge via retail and foodservice channels excluded,

except where in the form of an industrially-manufactured

Source: Foodtrending 2020 9 Flavour Materials: Juices, extra Europe, as defined. 2 0 2 0 0 50 100 150 46 $m 33 $m cts, powde 200 519 $m rs, and concentrates. 250 300 350 316 $m food product. Zeros = little discernable Values converted at aver All numbers rounded NOTES: Industrial food ingredients only. Usage via retail and foodservice channels excluded, except where in the form of an industrially-manufactured usa age ge. exchange rates. 200 250 Flav 300 ouri 350 ng m 400 a Confectionery 6.5% Snacks 9.5% FLAVOURS (NATURAL) CAGR 2018 - 2020 terials Confectionery Snacks Softdrinls Flavour materials: Juices, extracts, powders, and concentrates. Europe, as defined. 450 500 550 600 530 $m food product. Zeros = little discernable usage. Values converted at average exchange rates. Confectione 2018 ry 12 $m 0.3 $m Flavour Snac M ks aterials: Soft Juice drinls s, extracts, powders, and Al 769 $m Soft drinks concentrates. Flavouring materials l numbers rounded 7.2%

Europe, as defined.

13 $m NOTES: , fla as v d o e urs: fine Fl d. avouring 2019 sub 0.3 $m Flavo stances urin from g pl m an ateria t or raw ls materials. Predominately used in soft 830 $m drinks and dairy Industrial food ingredien Usage via retail and food Confectionery FLAVOURS (NATURAL) products. t s s e on rvi ly. ce channels exclude 6.5% CAGR 2018 - 2020 d, nings: Mixtures e, as defined. 40 $m 29 $m ral flavours and bl 2020 0 2018 2019 end 0.1K 14 $m 0.3 $m 12 $m 0.3 $m 13 $m 0.3 $m s of herbs, 0.2K spices. 0.3K 0.4K Confectionery Used widely in 282 0.5K 0.6K Snacks snacks, mea $m ls, 0.7K 0.8K 0.9K 1K 884 $m Soft drinls 769 $m 830 $m and meat products. Confectionery Snacks Soft drinks FLAVOURS (NATURAL) except where in the form of an industriall food product. Zeros = little discernable usage. Values converted at average exchange ra All numbers rounded Snacks 9.5% Soft drinks 7.2% NOTES: Industrial food ingredients only. Usage via retail and foodservice channels 7.2% 6.1% 6.0% CAGR 2018 - 2020 y-manufa tes. excluded c , tured 18 $m strial s 44 $m 31 $m 46 $m 33 $m easoning, 2020 0 he 0.1K 14 $m 0.3 $m rbs & sp 0.2K ieces 0.3K 0.4K 0.5K 486 $m 301 $m 0.6K 0.7K 0.8K 0.9K 1K 884 $m except where in the form food product. Zeros = little discernable Values converted at aver All numbers rounded Confectionery 3.7% Snacks 4.4% FLAVOURS (NATURAL) CAGR 2018 - 2020 NOTES: Industrial food ingredients only. Usage via retail and foodservice channels excluded, except where in the form of an industrially-manufactured food product. Zeros = little discernable usage. of an industri usage. age exchange a r ll a y- te m s. anufactured 18 $m Confectionery Sna 316 cks $m Soft drinls Soft drinks Values converted at average ex 9.5% change rates. 19 $m 50 100 150 200 250 300 350 All numbers rounded Confectione Source: Foodtrending 2020 ry Snacks Softdrinls 9

21 $m r Materials: Juices, extracts, powders, and concentrates.

e, as defined.

100 150 200 250 300 350 400 450 500

ouring materials

Confectionery Snacks Soft drinls 519 $m

530 $m

550 600

NOTES: Industrial food ingredients only. Usage via retail and foodservice channels excluded, except where in the form of an industrially-manufactured food product. Zeros = little discernable usage. Values converted at average exchange rates.

All number FLAVOURS s r (N ounded ATURAL) CAGR 2018 - 2020

Confectionery 6.5%

Snacks