San Francisco, 12 March 2024: The Report Essential Oils Market Size, Share & Trends Analysis Report By Product (Orange, Cornmint, Eucalyptus), By Application (Medical, Food & Beverages, Spa & Relaxation), By Sales Channel, By Region, And Segment Forecasts, 2023 - 2030

The global essential oils market is expected to reach USD 40.12 billion by 2030, and expanding at a CAGR of 7.9% from 2023 to 2030, as per the new report by Grand View Research, Inc., Key factor contributing to the demand for essential oil is that aromatherapy is rapidly gaining momentum as a convenient method of healing lifestyle diseases. The sales volume of essential oils is rising on the account of the rising consumer awareness related to the wide utilization of the product across various applications.

They are primarily made of terpenes and their oxygenated derivatives which usually include monoterpenes, sesquiterpenes, etc. They are present in specialized cells/glands in various plants and the position of these glands varies depending on the morphology, and physiology of the plant. During the manufacturing process, these glands are ruptured by pressing or by application of heat, which emanates aroma.

The product is widely used for enhancement of air freshness at home with the help of aroma diffusers and addition of essential oils in aroma pots. It is added to the water or baths in order to relax muscles and improve the aroma of place. Young women use these products for making homemade cosmetics due to their natural content and medicinal benefits.

Increasing demand for organic products is influencing consumer trends across the globe. Further implementation of regulations favoring the use of environmentally friendly ingredients in cosmetics, and food & beverage industry. The increased the consumer’s interest for products produced from natural ingredients. A majority of the global population are shifting their preference to organic products which in turn is increasing the demand for plant based products, leading to a significant drop in the demand for synthetic fragrances.

Owing to the outbreak of coronavirus around the world, many countries experienced lockdown situations. This had led to major raw material shortages, disruption in the supply chain, and increased prices for highly demanded products for two to three quarters in 2020. Moreover, the restrictions on imports & exports of goods by any means from most of the South East Asian countries further worsened the situation. However, the temporary closure or slowing down of manufacturing plants of synthetic flavors & fragrances in China led to a rise in opportunity for essential oil distillers, as the manufacturers turned to smaller vendors to fulfill their raw material requirements.

This is attributable to the increasing demand from major end-use industries such as food & beverage, personal care & cosmetics, and aromatherapy. Essential oils contain complex, volatile chemical compounds, which are known for their antifungal, antibacterial, anti-inflammatory, and antiviral properties. Unlike most conventional medicines and drugs, these oils have no significant side effects. Such factors are projected to be the major driving factor for market growth. Conventional medicines and drugs have pleasant-smelling aroma compounds to create appealing products, mainly for chemicals that emit odors. Essential oils are also steadily replacing most chemicals, drugs, and medicines owing to associated health benefits and decreased risk of side effects.

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The rising demand for convenience and ready-to-eat meals, health and wellness foods, and technological advancements are expected to boost food flavors market growth. Rapid industrialization and increasing consumer disposable incomes in emerging economies such as China and India are also projected to foster the global food flavors market over the forecast period.

Essential Oils Market Report Highlights

• Cleaning & home witnessed the fastest growth rate of 7.7%, due to the presence of antifungal and antibacterial properties of essential oils
• Black pepper witnessed one of the fastest growth rate of 8% on the account of its wide use in food & beverage, spa & relaxation, and medical sectors
• Direct selling channel witnessed the fastest growth rate of 8.4%, as consumers have the need to smell and feel the oils in person
• Europe witnessed the fastest growth rate of 8% as compared to other regions, due to strong presence of food & beverage industry in the region, coupled with high disposable income and high standards of living
• The global product market is highly competitive on the account of the presence of multiple manufacturing companies operating in the market

Essential oils such as rose, sandalwood, Melissa, and German chamomile, which are widely utilized in aromatherapy applications, are expensive owing to the difficult extraction process involved. The high price of critical essential oils used in aromatherapy is an important factor behind the slow growth of the aromatherapy industry in developing countries such as India, Malaysia, etc., compared to developed countries such as the U.K., France, and the U.S. However, growth in GDP and various untapped market opportunities in the Asia Pacific are the major factors attracting aromatherapy industry players to establish and expand their businesses in emerging economies such as India, China, and Indonesia.

Numerous forests have been chopped down to derive minimal amounts of oil. Several arable lands have also been converted into monoculture farming lands to cultivate a single plant or crop to derive a particular oil. Production of these crops and plants is undertaken by large multinational firms that disregard the environment and endanger numerous ecosystems. It is thus becoming increasingly difficult to cultivate enough plants to produce one pound of oil.

The orange segment dominated with the highest revenue share of 23% in 2022. Its high share is attributable to its ability to enhance the quality of skin, nails, and hair, thus boosting its popularity among young women. Major end-use industries progressively use orange essential oil to develop sensory appeal and improve product value. It is believed to promote elasticity and firmness and tone up the skin. It is also known to treat stretch marks, dermatitis, and acne. Moreover, the growing working women population and rising disposable income are expected to be the major drivers for this industry.

Essential Oils Market Report Scope

Peppermint oil is also considered one of the most versatile essential oils, as it can be used internally, topically, and aromatically. The significant ingredients present in this oil are menthone and menthol. Healthcare applications of peppermint oil include the treatment of cold, headaches, cold, muscle pain, and sinus.

Davana oil is extensively utilized for producing natural perfumes and flavoring agents. The antiviral, stimulant, nervine, and antiseptic properties of the oil make it suitable for use in various medical applications. Davanone, a sesquiterpene ketone, is the primary molecule responsible for insect deterrent and aromatic benefits of the essential oil. India is the leading producer and exporter of davana essential oil globally, while Germany, France, Australia, Singapore, and the U.S. are the major importers.

The essential oils industry is highly fragmented, with many industry participants such as Symrise and MANE. Higher integration of key market players for raw material sourcing and distribution is expected to increase market competition. Companies such as India Essential Oils, Young Living Essential Oils, and Biolandes have integrated their operations to provide raw materials and manufacture the final product to cut down on raw materials procurement and operation costs. This also helps companies to cater to the other industries served by the raw materials such as perfumes & deodorants, and food & beverages.

Colossal price competitiveness and technological advancement are some of the critical factors affecting product demand. The market is also characterized by balanced production capacities and different market sizes, which is projected to lower internal and higher profit margins rivalry among existing players.

List of Key Players in the Essential Oils Market

• Sydney Essential Oil Co. (SEOC)
• Biolandes SAS
• India Essential Oils
• H. Reynaud & Fils (HRF)
• Young Living Essential Oils
• DoTerra
• Essential Oils of New Zealand
• Farotti S. R. L.
• Flavex Naturextrakte GmbH
• Falcon
• Ungerer Limited