A COMPETITIVE SURVEY OF FLAVOR AND FRAGRANCE MARKETS

This study analyzes the U.S. market for flavor and fragrance materials. The purpose of the report is to quantify supply, demand, and trade conditions existing in the market; analyze trends influencing the market; and describe the competitive structure of the domestic flavor and fragrance industry.

The time series used in this report for historical data is from 1996 to 2002. Supply, demand, and trade conditions are forecasted through 2006. All flavor and fragrance materials are measured in millions of pounds and millions of dollars. All gross domestic product figures, end-use industry shipments, and income figures are rounded to billions of dollars. Population figures are rounded to millions.

Data was gathered from a variety of sources. General economic data was gathered from the U.S. Department of Commerce Survey of Current Business and Statistical Abstract of the United States, as well as other U.S. government and Federal Reserve documents. Information on shipments and consumption was gathered from the U.S. Census of Manufactures, the U.S. International Trade Commission' s Industry and Trade Summary Flavor and Fragrance Materials, and the U.S. Department of Agriculture' s Agricultural Statistics and Foreign Agricultural Circulars. Other government sources referred to include the Annual Survey of Manufacturers. Import and export data was obtained from the National Trade Databank and the U.S. Department of Agriculture' s FATUS and Foreign Agricultural Circulars. Supplemental sources included numerous industry and trade publications such as Beverage World, Chemical Marketing Reporter, Chemical Week, Food Engineering, Food Product Design, Perfumer and Flavorist, HAPPI, and Food Processing.

Whenever available, actual data was used. Aggregates were computed and statistical discrepancies reconciled. Preliminary forecasts were based on trend analysis of supply, demand, and trade variables, and their relationship to exogenous variables such as gross domestic product, disposable personal income, and population growth. These figures were adjusted for anticipated future changes. As a final check, independent estimates of a common variable were made and then reconciled to eliminate inconsistencies.

In the statistical tables included in this report, columns may not add exactly to their totals due to independent rounding. It should also be noted that growth rates may have been calculated using unrounded numbers.