Perfume is an organic compound that can feel the fragrance by smell or taste, also known as perfume raw material. It is mainly used to prepare essence for flavoring products, or directly used as food additives. Essence is a mixture of spices and corresponding excipients with specific aroma or fragrance, which is generally used for flavoring products and then consumed. According to the data, the output of essence and fragrances in China was 1850 tons in 2019.

1、 Development dilemma of essence industry

1. vulnerable to fluctuations in raw material prices

The raw materials for spice production mainly come from spice plants or basic chemical products. Spice plants are easily affected by natural climate, and their annual output is uneven, resulting in unstable supply and price of raw materials. The price of raw materials from basic chemical products is directly affected by the fluctuation of international oil prices. In recent years, the oil price fluctuates frequently, which has caused great difficulties for flavor manufacturers.

2. bottleneck in product innovation

At present, there is still a certain gap between China's edible flavor essence industry and the international advanced level in the field of technology research and development and product innovation. Only a few domestic enterprises have strong overall quality and have reached the international level in technology R & D and innovation. Most enterprises still have great room for progress in technology innovation, product refinement and functional development ability and level.

2、 Development prospect of essence industry

1. strong support from national industrial policies

The flavor and essence industry is an important raw material supporting industry in the food, daily chemical, tobacco, medicine, feed and other industries in the national economy. It is closely related to the improvement of residents' living standards, the development of the food and beverage industry, and the promotion of domestic demand and consumption. The administrative measures for the identification of high-tech enterprises (gkfw [2016] No. 32) listed the "separation and extraction technology of effective components of natural products" in the high-tech field supported by the state, providing policy support for the fine processing of natural flavors. At the same time, the Guiding Catalogue for industrial structure adjustment (2019 version) issued by the national development and Reform Commission lists "artificial cultivation and development of understory resources such as spices and wild flowers" and "development and production of natural food additives and new technologies of natural spices" as the product catalogue encouraged by the state.

2. the sustainable development of national economy drives the development of downstream industries

In the past decade, China has become one of the economies and has maintained a high growth rate for a long time. With the growth of China's economy and the increase of national income, the ability of urban and rural residents to pay has also been continuously improved. The rapid development of national economy and the rapid growth of residents' income have driven the sustained growth of consumption. With the continuous growth of national income, the consumption capacity of residents will be further improved, providing a good opportunity for the development of the downstream food and beverage, daily chemical and other industries of flavor essence, while the rapid development of the downstream industry has brought growing market space to China's flavor essence industry.

3. industry rules are gradually standardized

The relevant regulations and industry standards issued by the state provide a solid backing for the healthy development of the industry. The measures for the administration of food production licensing issued by the State Administration of market supervision in January 2020 has repeatedly put forward more detailed and strict requirements for the production and supervision of the industry. Since the end of 2013, the national health and Family Planning Commission has also successively updated the industrial standards such as the standard for the use of food additives, essence for food, general rules for food flavors, general rules for the identification of food additives, and further refined and standardized the quality requirements of the industry. The gradual tightening of industrial supervision and the updating and refinement of industrial standards have promoted the structural upgrading and quality improvement of the edible flavor essence industry, eliminated a number of substandard small and medium-sized enterprises, avoided vicious competition in the middle and low-end market, and promoted the industry to move towards a more self-discipline and healthy track.

4. the consumption concept continues to change, and the market demand is updated

With the improvement of the quality of life, people's consumption concept of food has changed. Food is no longer just a food and clothing consumer goods to eliminate hunger and provide nutrition necessary for survival. The pursuit of food safety and health, as well as the growing demand for food "color, aroma and taste", people are willing to pay a higher cost to obtain certain spiritual enjoyment from food.

5. stricter environmental protection policies

In recent years, the environmental protection policy has become stricter. As a sub industry of chemical raw materials and chemical products manufacturing, the essence industry is facing challenges. Small enterprises with lax environmental governance bear the brunt, providing good development opportunities for enterprises with a certain scale and standardized environmental governance.