Industry: Food and Beverages
Published Date: September-2024
Format: PPT*, PDF, EXCEL
Delivery Timelines: Contact Sales
Number of Pages: 166
Report ID: PMRREP32447
The essential oils market is estimated to increase from US$20.6 Bn in 2024 to US$39.1 Bn by 2031. The market is projected to record a CAGR of 7.7% during the forecast period from 2024 to 2031.
Key Highlights of the Market
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Market Attributes |
Key Insights |
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Essential Oils Market Size (2024E) |
US$20.6 Bn |
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Projected Market Value (2031F) |
US$39.1 Bn |
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Global Market Growth Rate (CAGR 2024 to 2031) |
7.7% |
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Historical Market Growth Rate (CAGR 2019 to 2023) |
7.3% |
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Region |
Market Share in 2024 |
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Europe |
49% |
Europe to hold the largest market share of the market owing to the large population and numerous undiscovered markets in this region. These undiscovered markets are expected to attract the attention of leading players encouraging them to develop and build their operations and distribution facilities.
The European Federation of Essential Oils (EFEO) has contributed to the Europe market growth. The purpose of EFEO is to advocate for and protect stakeholders' interests throughout the whole market value chain. The group is engaging in discussions with the European Commission and the EU Parliament to propose modifications or new legislation pertaining to essential oils. These developments have positively impacted the market's growth in the region.
The dominant market position of Europe in the market can be attributed to the easy availability of feedstock and the presence of numerous industry participants. The expansion of important end user sectors is being driven by reasons such as an advanced and prosperous economy as well as a great standard of living.
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Category |
Market Share in 2024 |
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Product - Orange |
26% |
Based on product, the essential oils market is segmented into orange, turmeric, and nutmeg. Among these, the orange segment dominates the market. The main reason for its significant market share is its capacity to improve the condition of skin, nails, and hair hence increasing its appeal to young women.
Various sectors are increasingly utilizing orange essential oil to enhance sensory appeal and their products' value. It is thought to enhance the skin's suppleness, firmness, and tonicity. It has been recognized for its efficacy in addressing stretch marks, dermatitis, and acne.
The increasing number of women in the workforce coupled with their expanding discretionary money is anticipated to be the primary catalyst for the market growth.
“High Price of Essential Oils Can Hurt Market Expansion”
The high price of essential oils can make it difficult for market players to manage their final product pricing and profit margins at the same time. Fluctuating prices of essential oils can cause a rapid rise or fall in market growth in a short period of time.
Due to the high pricing of essential oils, consumers are trying substitutes such as low-cost oils or synthetic oils, which leads to fluctuation in the demand for essential oils.
“Rising Demand for Natural & True-label Products”
Growing consumer demand for natural products that are free from harmful chemicals is increasing the focus on the origin of fruits and the cultivation method used. This concern is even stronger in the case of fruits, as the peel of the fruit, which is the major source of oils, is exposed to pesticides or fertilizer sprays.
Use of chemicals is not limited to on-farm cultivation; synthetic chemicals such as pesticides and fungicides are also sprayed on fruit shipments to extend shelf-life and prevent spoilage. This is a significant disadvantage as many consumers prefer true-label products and are hesitant to use any chemically-processed ingredients.
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Category |
Market Share in 2024 |
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Method of Extraction - Distillation |
33% |
Based on method of extraction, the market is classified into distillation, cold press extraction and carbon dioxide extraction. Among these, the distillation segment dominates the market.
The increase is ascribed to the growing use of distilled essential oils in aromatic compounds. Distillation is the most cost-effective and affordable extraction process for producing essential oils, making it the favoured choice. Steam distillation is favoured for its minimal capital requirements, as it may be conveniently conducted near the manufacturing facility.
Essential oils consist of intricate, volatile chemical molecules with antifungal, antibacterial, anti-inflammatory, and antiviral effects. With their minimal negative effects compared to conventional medicines, essential oils are poised to be a significant catalyst for market expansion.
Conventional medications and treatments incorporate fragrant aroma molecules to develop attractive goods, particularly for substances that produce unpleasant scents. Essential oils are gradually replacing many chemicals, medications, and medicines, primarily due to their health advantages and reduced risk of negative effects.
The food tastes market is anticipated to experience expansion due to increasing demand for convenient and ready-to-eat meals, health and wellness foods, and technological advancements. Rapid industrialization and rising consumer disposable incomes in emerging markets like China and India are expected to drive the market.
The essential oils market experienced steady growth pre-2023 driven by rising consumer demand for natural and organic products in personal care, aromatherapy, and food & beverages. Key factors fueled the market growth include increased awareness of the therapeutic benefits of essential oils, their expanded use in cosmetics, and the growing popularity of alternative medicine.
Post-2024, the market is expected to accelerate fueled by the continued global shift toward natural ingredients and wellness products. Emerging applications in pharmaceuticals, coupled with technological advancements in extraction methods will likely to drive innovation and expansion.
Market growth will also be influenced by the increasing trend of sustainability, with companies focusing on eco-friendly sourcing and production processes. The rise of e-commerce platforms and expanding consumer access in developing regions are anticipated to contribute significantly to market expansion.
Rising Consumer Awareness and Preference for Natural Products
The global shift toward health-consciousness and environmental sustainability has increased demand for natural and organic products including essential oils. Consumers increasingly seek alternatives to synthetic ingredients in personal care, household products, and medical treatments.
Essential oils, known for their therapeutic properties, have become popular in aromatherapy, skincare, and wellness routines. Concerns over chemical exposure drive the preference for natural products, the environmental impact of synthetic products, and a broad societal trend toward holistic well-being.
The ongoing shift toward natural solutions is projected to further fuel the growth of the essential oils market as many consumers incorporate these products into their daily lives.
Expansion in the Aromatherapy and Wellness Industries
Aromatherapy, once a niche segment has gained mainstream acceptance as a complementary therapy in stress management, pain relief, and mental health. The wellness industry, which includes spas, yoga centres, and holistic health practices has integrated essential oils into various treatments and products, significantly boosting their demand.
Consuming essential oils for aromatherapy, massage, and meditation is expected to grow as wellness becomes a lifestyle choice rather than a luxury. The trend is supported by increasing scientific validation of the benefits of essential oils further encouraging their use in both professional and home settings. Integrating essential oils into wellness practices will likely to be a significant driver for market growth in the coming years.
Growing Applications in Food & Beverages and Pharmaceuticals
Essential oils are increasingly used as natural flavouring agents and preservatives in the food and beverage industry, responding to consumer demand for clean-label and chemical-free products. Certain essential oils' antimicrobial and antioxidant properties make them valuable in extending shelf life and enhancing the safety of food products.
The pharmaceutical industry has begun exploring essential oils for their potential in alternative medicine and therapeutic formulations, particularly in areas like pain management and respiratory conditions.
The expansion into diverse applications broadens the market reach of essential oils and reinforces their importance in industries focused on health and wellness. As research continues to uncover new uses for essential oils, their market potential is expected to expand significantly.
High Production Costs and Price Volatility
The production of essential oils is highly resource-intensive, requiring large quantities of raw materials for small yields of oil. For instance, it can take several pounds of plant material to produce just one ounce of essential oil. This high input requirement drives up production costs, making essential oils more expensive than synthetic alternatives.
The price of essential oils is subject to volatility due to factors like crop yield variability, climate change, and geopolitical issues in key producing regions. These fluctuations can create challenges for manufacturers and end consumers potentially limiting the market growth especially in price-sensitive regions or segments.
Regulatory Challenges and Quality Control Issues
The essential oils market faces significant regulatory hurdles, particularly concerning labeling, purity standards, and therapeutic claims. The lack of standardized regulations across different countries creates inconsistency in product quality and poses a risk to consumer safety.
The presence of adulterated or low-quality oils in the market undermines consumer trust and can lead to health risks, further complicating the industry's growth. Companies must navigate a complex regulatory landscape while ensuring product authenticity and safety, which can be both time-consuming and costly. These challenges may slow market expansion, particularly in regions with stringent regulatory environments.
Integration of Essential Oils into the Pharmaceutical and Healthcare Sectors
The growing interest in natural and alternative medicine presents a significant opportunity for the essential oils market particularly within the pharmaceutical and healthcare sectors. As consumers increasingly seek out natural remedies and holistic approaches to health, essential oils are gaining recognition for their potential therapeutic benefits.
Essential oils like eucalyptus, lavender, and tea tree are being studied for their antimicrobial, anti-inflammatory, and analgesic properties. These properties could make them valuable components in over-the-counter (OTC) medications, topical treatments, and even prescription formulations.
The pharmaceutical industry is exploring the use of essential oils in various therapeutic areas, including pain management, respiratory health, and mental wellness. For instance, peppermint oil is being utilized in products targeting digestive health, while lavender oil is popular in products aimed at reducing anxiety and improving sleep quality.
As scientific research continues to validate the efficacy of essential oils, there is a growing potential for these natural compounds to be integrated into mainstream medical treatments. This integration could drive demand significantly as consumers and healthcare providers look for effective, natural alternatives to synthetic drugs.
The use of essential oils in preventive healthcare offers another avenue for growth. With an increasing emphasis on wellness and disease prevention, essential oils could be incorporated into daily health regimens, similar to vitamins and dietary supplements.
The expanding application of essential oils in pharmaceuticals and healthcare represents a substantial opportunity for market growth. As these sectors continue to embrace natural solutions, essential oils could become a key component in the future of healthcare, driving both innovation and market expansion.
The essential oils market is highly competitive and characterized by both global and regional players. Key market participants include Young Living, doTERRA, Givaudan, Symrise, and Firmenich, who dominate through strong brand recognition, extensive distribution networks, and diverse product portfolios.
Several small and niche players focus on organic and sustainably sourced essential oils to differentiate themselves in the market. The competitive landscape is also shaped by innovation in product formulations and delivery methods with companies increasingly investing in research and development to discover new applications for essential oils.
Recent Industry Developments in the Essential Oils Market
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Attributes |
Details |
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Forecast Period |
2024 to 2031 |
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Historical Data Available for |
2019 to 2023 |
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Market Analysis |
US$ Billion for Value |
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Key Regions Covered |
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Key Market Segments Covered |
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Key Companies Profiled in the Report |
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Report Coverage |
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Customization & Pricing |
Available upon request |
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The market is estimated to be valued at US$20.6 billion in 2024
The market is projected to exhibit a CAGR of 7.7% over the forecast period.
A few of the top players of the market include Young Living Essential Oils, doTERRA, and Now Health Group, Inc.
A key opportunity lies in the integration of essential oils into the pharmaceutical and healthcare sectors.
Europe region dominates the market for essential oils.
