CITRAL MARKET ANALYSIS

Citral market is expected to reach US$ 4.32 Bn by 2031, from US$ 3.19 Bn in 2023, exhibiting a compound annual growth rate (CAGR) of 6.5% during the forecast period.

Citral Market Regional Insights:

• Europe is expected to be the largest market for citral during the forecast period, and accounted for 30% of the market share in 2023. The regional market growth can be attributed to rising consumer demand for natural flavors and perfumes in food and beverage goods.
• Asia Pacific accounted for 25% of the citral market share in 2023. Citral consumption in this region increases due to rising consumer desire for natural and organic personal care and cosmetics goods.
• North America accounted for 20% of the citral market share in 2023. North America citral market growth is driven by rising consumer awareness about advantages of using natural ingredients in products.

Figure 1. Citral Market Share (%), By Region, 2023

To learn more about this report, Request sample copy

Citral Market - Analyst’s Views:

Citral is used in producing flavors for foods and beverages. Europe dominates global citral market due to availability of key raw materials in the region. However, volatility in raw material prices can impact stable supply of citral. The development of alternative production methods that reduce dependence on natural raw materials can offer opportunities for the market growth.

Rise in health awareness prompt manufacturers to reduce chemical-based flavors to favor natural ingredients like citral. Expanding food processing industry in Asia Pacific and Latin America can augment citral consumption in the near future. High competitiveness in the flavor and fragrance market poses challenge for vendors. Customer preference for newer and unique flavors/fragrances also compels companies to continually invest in research and development (R&D).

Stringent regulations regarding use of synthetic ingredients in food products can hamper the market growth. Producers face difficulties that are associated with storage and transportation of citral due to its volatile nature. Adoption of citral for non-food applications is expected to provide new avenues for growth in pharmaceutical and household product segments. While Indonesia and China have clear competitive advantage in citral supply currently, India could emerge as a fast-growing regional market.

Citral Market Drivers:

Wide range of applications in perfumes, soaps, detergents and other products: Citral, which is a mixture of two isomers geranial and neral, has a wide range of applications across industries such as perfumes, soaps, detergents, food and beverages. These versatile applications that are can drive the growth of the citral market. Citral is extensively used to impart lemony and floral notes in perfumes, deodorants, body washes and other personal care products. Its fresh and clean scent makes it a popular ingredient amongst personal care brands.

Citral is also widely utilized as a cleaning agent in various types of soaps, detergents, and household cleaners due to its degreasing and antimicrobial properties. The COVID-19 pandemic has led to heightened focus on hygiene and cleanliness over the past few years. For instance, according to the data provided by the UNICEF in 2021, the global personal care industry has witness growth at over 5% annually in the last 5 years, this  trend is expected to continue in the near future as well. This increasing demand from the personal care sector has a direct positive impact on citral consumption.

Increasing use in the food and beverage industry for flavoring agent: The food and beverage industry is increasingly adopting citral for flavoring purposes due to its pleasant aroma and taste. Citral, which is primarily extracted from lemongrass, litsea cubeba, and other plants, is being widely used for imparting lemon, lime, and floral notes in food products, beverages, and confectioneries.

It provides refreshing citrus flavor profile that consumers find very appealing. Beverage manufacturers are actively experimenting with different ratios of citral to develop innovative citrus flavors in beverages like sodas, juices and flavored waters. For example, many popular lemon-flavored fizzy drinks derive their unique zesty flavor from citral. In confectioneries like candies, chewing gums, and baked goods, citral is utilized to provide a sweet citrus undertone that consumers enjoy. It is also being used in savory applications like marinades, salad dressings, and dips for providing that tangy citrus dimension to the taste.

According to the data provided by the Government, the UN Food and Agriculture Organization (FAO), global demand for processed and ready-to-eat food products is steadily rising. Furthermore, changing consumer preferences towards more flavorsome options and functional beverages have prompted food and beverage companies to explore natural extracts like citral that provide both flavor and antioxidants. For instance, according to the data published by the International Trade Centre (ITC), the worldwide exports of essential oils including citral grew by over 12% between 2020-21 as compared to the 2019-2020. This rapid increase in trade indicates that more food and beverage manufacturers are recognizing citral's versatile usage in their product development efforts to meet consumer demand for flavorful yet natural foods.

Citral Market Opportunities:

Development of new application areas: The citral market has traditionally been focused on flavor and fragrance applications for foods, beverages, and personal care products. However, with advancements in material science and bioengineering, entirely new applications are emerging that could drive market growth. Citral is a natural terpene compound that can be used as a bio-based building block for creating various types of biodegradable plastics. As concerns over fossil fuel-derived plastic waste rises, bioplastics that are made from renewable ingredients like citral offer an environmentally-friendly alternative. For instance, according to data provided by the European Bioplastics Association, global bioplastic production capacity has increased nearly 50% from 2018 to 2021. As production continues rising to meet the demands of sustainability-focused consumers and regulations against single-use plastics, citral is well-positioned to play a larger role.

Another budding application field is green chemistries by utilizing citral's antibacterial and antiviral properties. Research performed by virologists at Hong Kong University found citral to be highly effective at inactivating SARS-CoV-2 virus particles in the air and on surfaces. This research indicates citral's potential for development into disinfecting sprays, surface coatings for public areas, and personal protective items like masks. The ongoing COVID-19 pandemic has revealed vulnerabilities in public health that have accelerated investment into safe and natural solutions. The global market for disinfection products has grown substantially during the pandemic, according to UN Comtrade data. If citral-based chemistries can deliver on this promise, the citral market stands to considerably expand with rising demand for infection control.

Growth of end-use industries in emerging economies:  The growth of enduse industries in emerging economies presents a major opportunity for the citral market. Countries like India, China, Brazil, Indonesia, and others are experiencing rapid industrialization and economic development. As discretionary incomes rise in these nations, demand for consumer products incorporating citral also increases.

Citral provides lemon and lime fragrance and is widely used in products like soaps, detergents, perfumes, air fresheners, candles and more. As more consumers enter the middle class in emerging markets, consumption of these household and personal care items increases substantially. For example, soap production in India grew by over 8% yearly between 2015-2020, according to the Ministry of Statistics and Program Implementation, India. Rising hygiene awareness after COVID-19 has further accelerated the sales of soaps and sanitizers.

Developing nations are also investing heavily in their manufacturing capabilities. Special Economic Zones (SEZs) are coming up across regions like Southeast Asia to attract foreign direct investment into industries like automotive, electronics, pharmaceuticals, and others. All of these end-use sectors employ citral for applications such as aroma chemical formulations, deodorization, and others. The growing industrial landscape in emerging economies thus presents a constant rise in demand for citral.  For instance, according to United Nations Industrial Development Organization (UNIDO), the share of global manufacturing from developing countries increased from 25% in 2000 to 37% in 2018.

This development of enduse sectors in emerging nations will ensure stable and long-term growth opportunities for citral producers and exporters. By tapping into these fast-growing consumer and industrial markets, companies can mitigate risks from economic slowdowns in mature regions and capitalize on the next phase of global economic transformation.

Citral Market Trends:

Rising popularity of organic and herbal cosmetic products: The rising popularity of organic and herbal cosmetic products is influencing the citral market significantly. With increasing health and environment consciousness among consumers, the demand for natural and plant-based ingredients in cosmetic products is growing steadily. Citral, which is a natural compound extracted from lemongrass, litsea cubeba, and other plants, is being widely used as a key ingredient in various organic cosmetic products like soaps, creams, lotions, and others due to its antibacterial and anti-inflammatory properties.

Many cosmetic brands are emphasizing the use of citral and other natural compounds in their products to cater to consumer demand. As organic cosmetic products become increasingly popular, the demand for citral as a natural preservative and fragrance ingredient is growing significantly.

Focus on production of value-added citral derivatives: Focusing on the production of value-added citral derivatives presents a major opportunity in the citral market. While citral itself has applications as a fragrance and flavor compound, deriving specialized derivatives from it allows access to a wider range of end use applications and consumer markets. Citral derivatives have emerged as important raw materials for industries such as cosmetics, perfumes, household products, food and beverages.

Producing citral derivatives allows customizing end products for specific needs. For example, geranial and neral (the two isomers of citral) can be used to derive forms that are suited for different fragrance notes, geranial adds citrus tones while neral provides floral nuances. Similarly, citral diethyl acetal is valued for its orange-citrus scent. This level of customization and specialization addresses the evolving requirements of international brands and domestic firms. It also opens up avenues for developing novel ingredients, catering to new product trends.

Focusing on derivatives also improves margins and creates a differentiator. For instance, according to the data provided by the UN Comtrade, while India's citral exports have grown steadily between 2020-2022, much of this has been in the form of the basic chemical. Venturing into specialized derivatives allows capturing more economic value in the global supply chain. It helps to establish the region as a reliable supplier of high-value ingredients.

Citral Market Restraints:

Stringent regulations regarding usage of citral: Stringent regulations regarding the usage of citral are placing significant restraints on the expansion of the citral market. Citral, which is a natural compound found in several plants, is widely used in the fragrance and flavor industries. However, various health and environmental organizations have flagged concerns in recent years about potential risks from prolonged or excessive exposure to citral. In response, regulators across major economies have introduced new guidelines by curbing the application of citral in certain products.

For example, the European Union's (EU) registration, evaluation, authorization, and restriction of chemicals (REACH) regulations mandate lower permissible exposure limits and tighter control over citral content in leave-on cosmetic formulations like perfumes as well as cleaners due to potential skin irritation issues. Similarly, the Food and Drug Administration (FDA) in the U.S., has laid out stricter Good Manufacturing Practices for citral usage in food items to prevent unintended over-consumption. These revisions are aimed at minimizing health risks but have led to formulation changes and disruptions for several end-use industries dependent on citral.

Counter balance: Ensure that products meet all regulatory requirements. Obtaining certifications from recognized bodies can help to demonstrate compliance and build trust with customers.

Presence of substitutes: The citral market is facing considerable restraint due to the presence of effective substitutes. Citral is primarily used in fragrance applications to impart lemony and floral notes. However, there are several synthetic compounds that can replicate the aroma and scent of citral at a lower cost. Prominent synthetic substitutes include citronellal, geraniol, and methyl ionone. These substitutes are primarily produced through chemical processes rather than extraction, and offer fragrance formulators more stability and consistency in end products. The popularity of synthetic substitutes is restricting natural citral producers from significantly increasing their market share. Most substitute compounds are sourced from abundant petrochemical feedstocks rather than renewable botanical sources like lemon grass oil that supplies over 90% of global citral. The reliable supply and cheaper manufacturing costs of alternatives like citronellal have made them the obvious choice for cost-conscious consumers, especially in industrial and institutional segments.

The presence of effective synthetic drops is also preventing citral producers from substantial price rises needed to boost profit margins. Substitutes restrain citral prices from increasing to cover rising production costs that are associated with variables like labor, energy, and lemon grass crop yields. This leaves citral suppliers with limited options to organically increase earnings potential and incentivize further capacity expansions.

Counter balance: Expand the product portfolio to include specialized blends or formulations that combine citral with other ingredients to provide a unique value proposition that substitutes may not offer.

Recent Developments:

• In June 2022, Givaudan and Manus Bio worked together to create BioNootkatone, a clean-label, natural, and sustainable citrus flavoring component. Several different dishes and beverages can be made with BioNootkatone. BioNootkatone from Givaudan smells citrusy and woodsy. For BioNootkatone, Manus Bio owns complete production rights, while Givaudan has exclusive global commercialization rights.
• Givaudan is a global leader in fragrance, beauty, taste, and wellbeing. The company is known for creating innovative scents and tastes with a commitment to purpose-led growth. Givaudan celebrates the beauty of human experience by developing a wide range of products, including fragrances, flavors, and beauty and wellbeing solutions.
• In April 2021, Firmenich, a privately held fragrance and taste company, launched FreshSlice, a special assortment of citrus oils that is made entirely from natural ingredients for future flavors. Unmatched freshness, juiciness, and fruit-like flavor are all provided by FreshSlice at a reasonable price.
• Firmenich is a Switzerland-based company that specializes in the fragrance and flavor business. The company has been creating perfumes for over 125 years and has produced a number of well-known fragrances. Firmenich is also a leading supplier of high-quality, renewable ingredients and has a strong focus on sustainability.
• In 2020, Zhejiang NHU Co., Ltd. announced the launch of its new citral plant in Zhejiang, China. The new plant is expected to enhance the company’s production capacity of citral and cater to the increasing demand for natural and organic ingredients in various industries.
• Zhejiang NHU Co., Ltd is a China-based company that engages in the manufacturing and sale of nutrition, flavoring, fragrance products, pharmaceutical intermediates, chemicals, and organic chemical products. It is a national high-tech enterprise with a focus on research and production of nutrition, pharmaceutical raw materials, flavors, fragrances, and new organic chemical products.
• In 2020, Kalpsutra Chemicals Pvt. Ltd. announced the expansion of its citral production capacity in India. The expansion is aimed at meeting the growing demand for citral in the food and beverage industry and strengthening the company’s market position.
• Kalpsutra Chemicals Pvt. Ltd. is an India-based manufacturer, exporter, and supplier of aromatic chemicals, flavor ingredients, and industrial inorganic chemicals. The company has a strong presence in the domestic and international markets, emphasizing quality and timely delivery of its products.

Acquisation & Partnership

• In 2021, BASF SE announced the acquisition of Isobionics, a Netherlands-based biotech company that specializes in the production of Natural Flavors and fragrances. The acquisition is aimed at expanding BASF’s portfolio of natural ingredients and meeting the growing demand for natural and sustainable products.
• BASF SE, whose acronym stands for Badische Anilin- und Sodafabrik, is a Germany-based multinational chemical company. It operates in various segments, including chemicals, plastics, performance products, functional solutions, agricultural solutions, and oil and gas. The company is listed on the Frankfurt Stock Exchange, London Stock Exchange, and Zurich Stock Exchange. BASF is known for its commitment to sustainability and innovation, aiming to create chemistry for a sustainable future.
• Isobionics is a  biotech-based aroma ingredients company. The company develops and produces a wide range of natural ingredients for the flavor and fragrance market, with a focus on citrus oil components. Isobionics has been recognized as an innovation leader in biotechnology, serving the global market for natural flavors and fragrances.
• In 2020, Jiangxi Global Natural Spice Co. Ltd. announced the acquisition of Huade County Running Natural Fragrance Co. Ltd. a China-based company that specializes in the production of natural fragrance ingredients. The acquisition is aimed at expanding Jiangxi global natural spice’s product portfolio and strengthening its market presence.
• Jiangxi Global Natural Spice Co., Ltd. is a well-established company with over 10 years of experience in the production, development, and deep processing of natural spice oils and essential oils. The company is known for providing high-quality and cost-effective products, offering competitive prices, and excellent services. It specializes in essential oils and plant oils, and its commitment to quality and customer satisfaction is evident in its approach to both new and existing customers. The company's focus on natural spice and essential oils underscores its dedication to providing natural and aromatic solutions to its customers.

Figure 2. Citral Market Share (%), By Type, 2023

To learn more about this report, Request sample copy

Top Companies in the Citral Market:

• BASF SE
• Beijing Lys Chemicals Co. Ltd.
• Indukern SA
• Industrial and Fine Chemicals
• Kuraray Co. Ltd.
• Privi Specialty Chemicals Limited
• Rajkeerth Aromatics and Biotech Pvt. Ltd.
• Symrise AG
• Takasago International Corporation
• Vee Kay International
• Zhejiang Xinchecheng Co. Ltd.

*Definition: Citral is a pale yellow liquid with a strong lemon-like odor that occurs naturally in the essential oils of plants such as lemon grass, orange, and lemon. It is an unsaturated liquid isomeric aldehyde with the chemical formula C₁₀H₁₆O and is a valuable intermediate for the synthesis of odorants, terpenoids, and vitamins. Citral is used in perfumery and flavorings and is also used in the manufacture of other chemicals. It is insoluble in water but soluble in ethanol (ethyl alcohol), diethyl ether, and mineral oil.