Argan Oil Market Size, Share & Trends Analysis Report By Type (Conventional, Organic), By Form (Absolute, Concentrate, Blend), By Application, By Distribution Channel, By Region, And Segment Forecasts, 2020 - 2027

Report Overview

The global argan oil market size was valued at USD 223.9 million in 2019 and is expected to expand at a revenue-based CAGR of 10.8% from 2020 to 2027. The growth can be attributed to increasing product demand from several end-use industries such as food, cosmetics, and medical. The growing popularity of the product along with favorable regulatory policies in countries like the U.K. and the U.S. are likely to play a key role in providing opportunities for new players entering the market.

Argan oil is extracted from the kernels of argan tree fruits, either manually or through a mechanical process. Earlier, oil was obtained from the kernels manually. However, the advancements in machines have helped save time and ensure high-quality production.

Argan oil has become one of the most preferred products, especially in the cosmetics and personal care industry. This is attributed to the advanced properties such as high levels of antioxidants, anti-inflammatory, and other noteworthy benefits for skincare and haircare. Men’s grooming products such as shower gels, hair and beard oils, skin creams, and waxes that are infused with argan and other essential oils have also witnessed a rise in consumption over the last few years.

Europe is one of the major consumers of argan oil in the world. The European market is dominated by product applications in the personal care and cosmetics industry. Cosmetic grade is mostly processed in Europe by the solvent extraction of kernels and is mainly used for the preparation of moisturizers, shampoos, and anti-wrinkle cosmetic products. In addition, Europe has been majorly involved in biopharmaceutical research in recent years. For instance, over the past decade, pharmaceutical companies in the region have successfully manufactured biobased medicines for several diseases such as cancer, high blood pressure, diabetes, and cardiovascular diseases. 

Argan Oil Market Trends

The argan oil as an active ingredient is used in personal care & cosmetic industry. The product is gaining popularity in several cosmetic formulations such as serums, lip balms, lip colors, face oils etc. owing to its anti-aging properties. Industry players such as L’Oréal, Lakmé, and Sephora have developed argan oil-based cosmetic product line. Growing preference towards natural and organic products is expected to drive the demand for argan oil in cosmetic products.

The market growth is anticipated to be driven by its increasing demand from food, cosmetics and medical industries. However, as the cultivation is limited to climatic conditions in Moroccan region, there has been a limited supply of the product however, demand is increasing at a significant pace. Growing popularity of argan oil and its benefits have fostered the research and development activities as well as given rise to several startups globally. Arganic Ltd., IZIL Beauty, KENZA International Beauty are among some of the startups involved in developing and distributing argan oil and argan oil-based products. These factors are expected to drive the argan oil market demand over the forecast period.

Organic products are absolutely free from any harmful chemicals. Rising consumer awareness regarding the various advantages associated with organic personal care products over their synthetic counterparts has resulted in an increased demand for the former over the last few years. Consumers are increasingly paying attention to their appearance, with particular importance given to youthful-looking and healthy skin. This trend is expected to boost the demand for organic personal care products and cosmetics, and in turn boost the argan oil market.

Argan oil production in Morocco was around 4,000 tons in 2015 and 4400 tons in 2017. The production increased in 2019 with a surge in the consumption of argan oil. Of the total production of argan oil, Morocco exported 60% of the product in 2015, while the export in 2017 and 2019 increased to 65% and 70%. The consumption is expected to increase immensely in the near future due to rise in exports. Morocco is expected to face difficulty to meet the growing demand due to limited number of argan trees in the country along with growing domestic product consumption. The aforementioned factors are anticipated to hamper the market growth in the near future. 

A significant number of product launches from the end-user side of the market i.e. personal care & cosmetics and food & beverage is driving the market towards product diversification and the expansion of argan oil application area. For instance, Tara Nature's Formula, Yumello, MISS JESSIE'S, LLC, and Inovia International among other market players launched various argan oil based personal care and food products in the past few years. Mergers and acquisition among personal care & cosmetic players is driving the market towards end-user consolidation. The acquisition of Quala’s Savital by Unilever in May, 2017 is one such example.

The production of argan oil not only helps decrease deforestation but also in maintaining greenery, as the argan kernels are picked up from the ground and not from the trees directly. Mounting demand for argan oil from food and medical industries is compelling the key producers in Morocco to boost their production levels.

Type Insights

The conventional type is harvested from the kernels of the argan tree and is rich in essential fatty acids and other important nutrients. Argan trees are slow-growing trees exclusively endemic to the barren lands of Morocco. Harvesting conventional is characterized by the use of irrigation water, synthetic fertilizers, and chemical pesticides in order to cultivate high-yielding varieties and obtain increased oil content. This type is significantly used for manufacturing personal care and cosmetics, pharmaceuticals, aromatherapy, food, and home cleaning products.

Organic is one of the purest forms of argan oil, which is used extensively as an ingredient for aromatherapy. Harvesting organic argan oil is characterized by the use of biobased fertilizers such as bone meal, green manure, and compost manure to increase crop yield. This type is sold as a luxury product and is gaining increasing interest among international cosmetics companies.

Form Insights

Argan oil absolute is a concentrated form, which is extracted from plant kernels through solvent extraction techniques. The production of this form involves pulverization of the kernels followed by their suspension in solvents, after which the solvents are vaporized to obtain the oil. Absolute form finds application in perfumery, aromatherapy, and cosmetic products.

The blended form includes a blend of argan oil with vegetables and essential oils. Typically, the blended form is used for purposes such as food recipes, cleaning, and home product formulations. Moroccan consumers are highly inclined toward using traditionally produced products. Increasing consumer demand for blends in topical applications coupled with rising consumption of argan oil blends in the cosmetics sector is projected to drive this segment growth over the forecast period.

Application Insights

Argan oil is gaining popularity in several medical applications owing to its anti-inflammatory, antioxidant, anti-proliferative, aphrodisiac, and analgesic properties. It is being used for treating infections such as chickenpox, skin-related conditions such as burns, eczema, and psoriasis, and diseases such as diabetes, epilepsy, osteoarthritis, and atherosclerosis. Due to its antibacterial property, the product is used for treating skin wounds, cuts, and abrasions at a faster rate.

Aromatherapy massage is known to have numerous benefits. It helps harmonize, balance, and relax the mind as well as the body. In addition, it enhances the immune system to assist various bodily functions and fight infections. Argan oil is also available in food and cosmetic grades for commercial usage. Food grade product is generally referred to as culinary oil and differs from cosmetic grade in terms of the production process. The production of culinary oil involves toasting the kernels to impart a nutty aroma and taste.

Distribution Channel Insights

On account of limited production and supply, the argan oil market value chain is characterized by the presence of a well-established distribution network to ensure uniform product availability across the globe. Business to Business (B2B) includes selling, distributing, and trading the product through the Internet, wholesalers, and value-added distributors. Argan oil producers extensively distribute their products across the globe through transport and logistics partners. 

Business to Consumers (B2C) refers to the process of selling products to the consumers or end-users through supermarkets, departmental stores, specialty stores, online stores, or door-to-door sales. The sales through supermarkets/hypermarkets are anticipated to witness significant growth in Europe, MEA, and North America. On the other hand, online sales of the product are expected to grow significantly in Asia Pacific and Central and South America, supported by a convenient purchasing experience for the customers.

Regional Insights

North America emerged as one of the significant consumers of argan oil owing to the increased consumption of biobased personal care, cosmetics, and aromatherapy products. The use of the product in aromatherapy healing improves the health of the body, mind, and spirit. Aromatherapy massage harmonizes body balance, decreases stress, and assists various body functions in fighting infections. Thus, aromatherapy products have become fashionable in North America and are widely available in specialist shops and online shopping centers.

The Middle East and Africa is the only region in the world, which is involved in commercial-scale production. Argan trees are mainly grown around the arid and semi-arid regions of Essaouira and Agadir in Morocco. Considering the benefits of argan oil, in recent years several NGOs and multinational cosmetics companies have come in to prevent deforestation and encourage the planting of argan trees in the region. For instance, L’Oréal along with BASF SE has set up a sourcing program to foster the supply chain.

The U.S. argan oil market is developing and gaining importance on account of the presence of high-performance ingredients such as vitamin E, omega 6, beta-amyrin, omega 3, triterpenoids, butyrospermol, lupeol, and tocopherols in argan oil. These ingredients help accelerate cell growth and strengthen anti-inflammatory & antiseptic features of the human body. In the U.S., favorable regulatory scenario along with technology innovation aiming for chemical and microbiology quality enhancement is expected to contribute to the overall market growth. 

Europe is one of the major consumers of argan oil in the world. According to the European Federation of Pharmaceutical Industries and Associations (EFPIA), pharmaceutical market in the European Union accounted over USD 200 million in 2018, positioning it as the second biggest pharmaceutical market in the world, with Germany, France, Italy, the UK, and Spain as the top 5 countries. 

Asia Pacific is emerging as a promising organic personal care & cosmetics products market across the world. China is the largest regional market followed by Japan and India. India is one of the most favored nations for producing low-cost medicines due to the presence of strong domestic companies such as Aurobindo Pharma, Sun Pharma, and Lupin. The development of new organic drugs related to cancer, cardiovascular health, hormone disorders, gastrointestinal disorders, anti-infective, anti-aging, and stress relief is expected to provide opportunities for argan oil manufacturers in the region.

Key Companies & Market Share Insights

The market is significantly fragmented as the number of players with business operations in Morocco is fairly high. There are many cooperatives in Morocco, wherein women are engaged in producing and transporting the product to refineries for further processing. Key manufacturers include OLVEA, ARGANisme, Zineglob, PURUS (Purus International), Malakbio, Argane Aouzac, Organica Group LTD, Arganfarm, Kamakhya Bottlers, Zidrop Argan Oil, and ARGANBULK.

Exporting the product to high-growth markets such as Europe and North America has resulted in a network of the manufacturer, trader, and distributor relationships. In order to combat the middlemen's prices, manufacturers have themselves adopted business operations of import and export. In order to maximize product sales and increase their penetration into the consumer market, a significant number of players are selling through their own online retail stores and have developed into specialty retailers.

Argan Oil Market Report Scope

Segments Covered in the Report

This report forecasts revenue and volume growth at global, regional, and country levels and provides an analysis on the latest industry trends in each of the sub-segments from 2016 to 2027. For the purpose of this report, Grand View Research has segmented the global argan oil market report on the basis of type, form, application, distribution channel, and region:

• Type Outlook (Volume, Tons; Revenue, USD Million, 2016 - 2027)

  • Conventional

  • Organic

• Form Outlook (Volume, Tons; Revenue, USD Million, 2016 - 2027)

  • Absolute

  • Blend

  • Concentrate

• Application Outlook (Volume, Tons; Revenue, USD Million, 2016 - 2027)

  • Personal Care & Cosmetics

  • Medical

  • Aromatherapy

  • Food

  • Cleaning and Home

  • Others

• Distribution Channel Outlook (Volume, Tons; Revenue, USD Million, 2016 - 2027)

  • B2B

  • B2C

    • Supermarket/Hypermarket

    • Specialty Retailer

    • Online Stores

    • Others

• Regional Outlook (Volume, Tons; Revenue, USD Million, 2016 - 2027)

  • North America

    • U.S

    • Canada

    • Mexico

  • Europe

    • Germany

    • U.K.

    • France

  • Asia Pacific

    • China

    • India

    • Japan

  • Central & South America

    • Brazil

  • Middle East & Africa

    • Morocco

    • GCC