Flavours and fragrances: Production route
Natural, nature-identical or synthetic: how aromas are made
What this tab covers How it is made: the main production routes or, for product families, the main product types and technologies, compared on share of supply, inputs per tonne, plant scale, yield, co-products and unit cost.The family has an ingredient layer and a compounding layer. Ingredients are synthetic aroma chemicals (often from petrochemicals or turpentine), naturals (essential oils, extracts, oleoresins) and biotech molecules from fermentation. The big houses make some ingredients themselves and buy the rest, then compound them into flavours and fragrances. The compounding layer earns most of the margin through creative skill, regulatory know-how and long customer relationships. Aroma chemicals are a more cyclical, more competitive commodity-like business where Chinese and Indian producers are gaining share.
Routes compared
| Route | Share of supply | Inputs per tonne | Typical scale | Yield | Co-products | Unit cost |
|---|---|---|---|---|---|---|
| Synthetic aroma chemicals | 62.4% of fragrance ingredient value (IMARC 2025); in flavours, nature-identical 42.5% and artificial 24.7% (IMARC 2025) | not published; multi-step organic synthesis with low overall yields for complex molecules (indicative) | from a few hundred tonnes to tens of kt/yr per molecule (indicative) | not published | solvent and salt waste | not published |
| Naturals: essential oils, extracts and oleoresins | 37.6% of fragrance ingredient value and 32.8% of flavours (IMARC 2025) | hundreds of kg to tonnes of crop per kg of oil depending on plant (indicative) | farm-level distillation to industrial extraction plants | low and variable (crop- and weather-dependent) | spent plant material used as fuel or feed (spices tile) | set by crop prices; volatile |
| Biotech and fermentation-derived molecules | small but growing (indicative) | sugar or plant feedstocks (indicative) | small fermentation lines (indicative) | not published | biomass | higher than synthesis for most molecules (indicative) |
| Compounding of flavours and fragrances | the market value of $43.07 billion is measured at this level (IAL) | dozens to hundreds of ingredients per compound | regional compounding plants | not applicable | none material | raw materials about 56% of sales at Givaudan (derived from 43.5% gross margin, 2025) |
How each route works
Synthetic aroma chemicalsMolecules such as vanillin (from guaiacol), menthol, linalool and citral (from petrochemical intermediates or turpentine), musks, Hedione-type jasmonates and woody notes are made in multi-step batch or continuous plants. Large specialty producers include BASF, Symrise, Givaudan, dsm-firmenich and Takasago, plus Chinese and Indian makers.
Consistent quality and price; exposed to Chinese overcapacity and petrochemical costs.
IMARC 2025; Givaudan 2025 Naturals: essential oils, extracts and oleoresinsSteam distillation (mint, lavender, patchouli), cold pressing (citrus peel), solvent or CO2 extraction (vanilla, spices, flowers). Natural menthol is crystallised from Indian mint oil. Oleoresins concentrate spice flavour and colour.
Consumer pull for 'natural'; weather, pests and farmer prices make supply volatile.
IMARC 2025; spices tile (Spices Board 2025-26) Biotech and fermentation-derived moleculesEngineered microbes or enzymes turn sugar or ferulic acid into vanillin, nootkatone, valencene, ambrox-type materials and other molecules labelled natural in some jurisdictions (indicative).
Natural label and lower land use; cost and scale still limit it.
indicative Compounding of flavours and fragrancesCreation centres develop formulas against a customer brief, test them in the product base, and scale them at compounding plants close to customers. Givaudan's Taste & Wellbeing sold CHF 3.64 billion and Fragrance & Beauty CHF 3.83 billion in 2025.
High margin and sticky; requires big creative and regulatory teams.
Givaudan 2025 results Unit economics are indicative ranges from the sources named; costs move with feedstock and energy prices, plant size and region.