Critical for growth: Fragrance and flavours R&D centre to open by Indian association by end year

The state-of-the-art US$150,000 R&D centre will be open to its 900 members from raw ingredients, distributors to finished products manufacturers as they look to innovate in this area.

FAFAI’s members consist of domestic small and medium companies as well as international powerhouses like Firmenich.

According to India’s Ministry of Micro, Small and Medium Enterprises (MSME), the global fragrance and flavour industry is worth US$24.10bn, and India contributes approximately US$500m. India is known for its essential oils such as menthol mint, sandalwood, jasmine, tuberose and its food spices.

FAFAI’s president Rishabh Kothari told us the new centre would play a key role in growing India’s fragrance and flavours industry, which had been reporting annual gains of 10 to 11% over the last few years.

Kothari said the market was set to grow at the same rate or even faster due to the effects of the ongoing pandemic.

“Because of Covid-19, there is likely to be larger demand for personal care products, cleaning products, and sanitisers, as people going to be more conscious about hygiene​.”

MSME cited rising personal care, brand awareness, increasing disposable income, growing demand in middle class people and affordable price of fragrance in the form of mass perfumes and deodorants as reasons for growth.

Lose and grow​

Kothari told us the estimated production loss for India’s fragrance and flavour industry during the lockdown was between 20 to 25% but he is optimistic about the future.

The country has been on strict lockdown for two months, although there are now more concessions.

Some essential businesses such as food processing are allowed to operate, provided they are not operating in containment areas.

People within containment zones are not allowed to travel out and vice versa. As of 28 May, there are 96 containment zones in Delhi alone.

Kothari said: “Even if your factory is outside the containment zone, people still do not have access to public transport. The supply chain is broken, so flavours and fragrances cannot come in, so even if your business is an essential category, you are unable to operate​.”

He said it would take a few weeks for businesses to return to normal. Kothari is also CEO of CKC fragrances, a fragrance manufacturer in India for industrial applications.

He said the entire FMCG category was dependent on fragrances and flavours, and emphasised that the association and its members were vital to every industry.

“For example, even though the use of flavour in a food is very low, maybe 1%, but that 1% makes a big difference​.

 “We all have to get back on our feet and support India and the world in creating products that will help people in the fight against Covid-19​.”

The association has conducted three workshops in the past five months, and recently conducted its first online workshop on perfumery.

Kothari said India and China were the fastest growing consumption markets as well as production markets in flavour and fragrances, attributing this to the sheer size of their population.

“They are both critical supply chain markets for the globe in terms of raw materials​.”