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Tunia Cherian George

The Indian market for flavours and fragrances is projected to grow at 10-12 per cent annually.

Mumbai , Nov. 16

THE flavours and fragrance industry is increasing its focus on India.

The Indian market for flavours and fragrances, estimated at Rs 900 crore, is projected to grow at 10-12 per cent annually. In the West, the market is split equally between fragrances and flavours. But in India, fragrances account for two-thirds of the total market.

International Flavors & Fragrances Inc (IFF), one of the top players in the $15-billion flavours and fragrances segment, recently opened a $4-million `creative centre' in suburban Powai. The 25,000 sq. ft. centre will help develop a range of products for the South Asian market in India, Pakistan, Bangladesh, and Sri Lanka, besides West Asia.

To launch the facility in India, Mr Richard Goldstein, Chairman and Chief Executive Officer, IFF, said Asia with its huge population base, is an attractive market for the company. In comparison, the US market is projected to grow at a steady pace, while the market in Western Europe is flat.

Increasingly, companies would look to the developing world for growth. India and China, with a combined population of 2.5 billion people, would drive initiatives in this region.

"Even if 2-2.5 per cent of this population moves up the economic chain, every four years, you would have a new economy the size of Germany," he said.

One of the important challenges for multinational companies expanding across the globe is to understand new markets. "International companies tend to replicate strategies that have worked in one market to others across the globe," he said.

Acknowledging that the market for fine fragrances in India is still very niche, Mr Goldstein said the company would work with its customers to address a larger section of the population.

IFF, which acquired Bush Boake Allen in 2000, is the largest taste consulting and manufacturing company in India. As a business-to-business player, the company services the FMCG industry, the processed foods segment, and the pharma industry.

"To improve the affordability of fine fragrances, they should be available in a broad price band that is accessible to a larger cross-section of customers," he said.

Mr Goldstein pointed out that besides fine fragrances, there are a range of products such as soaps, shampoos and oil that reach a larger section of consumers. These products are often sold in smaller formats, that have greatly improved their affordability, he said.

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