Flavours and fragrances and Food and beverage processing

Packaged food and drink makers buy their taste from a few flavour houses, which pass input costs on in their prices; India sits upstream as the main source of mint oil and a large exporter of spice oils and oleoresins, while synthetic menthol and food safety rules set limits on natural flavour demand.

Flavours and fragrances (chemical) and Food and beverage processing (industry): 4 relationships.

How they are linked

1. Taste supplied by flavour houses

Physical flow · Strong · Flavours → packaged food and beverage makers

Branded foods and drinks must taste the same batch after batch and across countries, so makers buy tailored flavour systems from specialist houses; flavour and additive suppliers rate this 4 of 5 on criticality and packaged food makers 3 of 5.

about CHF 3.64 billion Givaudan Taste and Wellbeing sales, 2025, up 2.4% like-for-like
7.8% Givaudan's 2025 like-for-like taste growth in South Asia, Middle East and Africa

A flavour is hard to change once a brand is built on it, because a new one means reformulating and retesting. That gives flavour houses pricing power: Givaudan said it raised prices with customers to fully compensate for higher input costs, including tariffs, in 2025, with growth led by snacks, dairy and sweet goods.

Enterprise types that depend on it:

Flavour, enzyme and food-additive suppliers: core product (criticality 4 of 5)
Packaged food manufacturers: taste (criticality 3 of 5)

Sources: Material Insights; Food Ingredients First

2. Indian mint and spice extracts

Physical flow · High in India · Indian mint oil, spice oils and oleoresins → flavour formulations

Natural flavours are built from essential oils and extracts, and India grows and distils most of the world's mint oil and is a large exporter of spice oils and oleoresins used in confectionery, beverages, sauces and seasonings.

80 to 85% India's share of world mint oil production
about $418 million India's exports of mint products, 2024-25 (27,283 t)
about $536 million India's exports of spice oils and oleoresins, 2024-25 (20,940 t)

Mint is grown on about 3 lakh hectares as an extra crop in the zaid (summer) season, and India became the dominant supplier in the mid-2000s with CSIR-CIMAP varieties. Spice oil and oleoresin exports rose from about $498 million in 2023-24, so Indian extraction is a growing upstream part of the global flavour chain.

Sources: Spices Board India; CSIR

3. Synthetic menthol

Substitution · Medium · Synthetic menthol can replace natural mint menthol

Menthol can be made synthetically at lower cost than natural mint oil, so flavour buyers can switch when farm costs or harvests push natural prices up.

almost 40% fall in Uttar Pradesh mint oil output in 2022 after severe heat waves

Rising fertiliser and labour costs have lifted the cost of natural mint while synthetic menthol stays cheaper, and some markets such as Indonesia prefer synthetic. Weather shocks like the 2022 heat waves widen the gap and encourage substitution, which tends to limit how far Indian mint prices can rise.

Sources: India Business and Trade

4. FSSAI flavour rules

Policy · Medium · Food safety rules → permitted flavour substances

India's food additive regulations classify flavourings as natural, nature-identical or artificial and ban some substances outright, so rules decide what flavour houses can sell into Indian food.

Under the Food Safety and Standards (Food Products Standards and Food Additives) Regulations, 2011, substances such as coumarin, safrole and thujone may not be used in any food. Natural flavourings are those extracted from plants, herbs and spices, animals or microbial fermentation, so spice oils and similar extracts can go into products sold as naturally flavoured.

Sources: Food Safety Helpline

For investors

Key learnings

Flavour houses hold pricing power because changing a flavour means reformulating a brand, as Givaudan's full pass-through of 2025 input costs showed.
Growth is fastest in emerging regions, with Givaudan's South Asia, Middle East and Africa taste sales up 7.8% in 2025 against 2.4% overall.
Synthetic menthol is cheaper to make, so it limits how far natural mint prices can rise after weather shocks such as Uttar Pradesh's 2022 heat waves.

What to track

Flavour houses' like-for-like sales and pricing: Demand from packaged food and ability to pass on costs (Half-yearly · Givaudan, IFF, Symrise, dsm-firmenich results)
Mentha oil spot price: Natural flavour input costs and pressure to switch to synthetic (Daily · MCX)
Spice oil and oleoresin export volumes: Strength of India's upstream extraction business (Monthly · Spices Board)

For policymakers

Key learnings

India produces 80 to 85% of the world's mint oil, a farm-based export that depends on summer weather and seed varieties from CSIR-CIMAP.
Synthetic menthol's cost advantage threatens mint farm incomes, so lowering farm costs through crop research and better varieties matters for keeping natural mint competitive.
FSSAI flavour rules shape both domestic food safety and the market for natural, extracted flavours.

What to track

Mint area and oil output in Uttar Pradesh: Supply resilience and farm income (Yearly · state horticulture department, CSIR-CIMAP)
Exports of mint products and spice extracts: India's share in global flavour inputs (Yearly · Spices Board)

India

India is the main source of natural mint, with 80 to 85% of world mint oil output, and exported about $418 million of mint products and $536 million of spice oils and oleoresins in 2024-25.

Sources

Food and beverage processing: materials and inputs, Material Insights (2026)
Givaudan Taste and Wellbeing shows resilience in 2025 amid macro pressures, Food Ingredients First (2026)
Major item-wise export of spices from India, 2024-25, Spices Board India (2025)
From importing menthol mint to becoming the leading exporter, CSIR
Menthol exports: is India's dominance under threat?, India Business and Trade
What are flavouring agents? What do FSSAI regulations say, Food Safety Helpline (2015)