Botanical Ingredients Market Size, Share & Trends Analysis Report By Form (Powder, Liquid), By Source (Spices, Flowers), By Application (Food & Beverage, Personal Care & Cosmetics), By Region, And Segment Forecasts, 2020 - 2028

Report Overview

The global botanical ingredients market size was valued at USD 144.38 billion in 2020 and is expected to grow at a compound annual growth rate (CAGR) of 6.9% from 2020 to 2028. The market is witnessing growth primarily due to the rising health-conscious consumer base coupled with clean label trends in the pharmaceutical, food, and beverage industries. Consumers are increasingly shifting to healthier alternatives while adopting preventive care as a necessary tool to help them lead a better lifestyle. Thus, botanical ingredients are being increasingly utilized in the manufacturing of food & beverages as they are a rich source of bioactive compounds and render a diverse range of biological effects.

The demand for botanical ingredients in the U.S. is highly influenced by the growing vegan population, rising focus on the use of natural & organic food ingredients, and the presence of key manufacturers with wide distribution networks. The increasing demand for sports nutrition in the country is expected to amplify the demand for dietary supplements, benefitting the market.

Clean labels cut through the clutter of too much data enabling customers to feel that they have more control over their well-being. The shifting trend toward clean label products is directly increasing the scope of botanical ingredients in the food, dietary supplements, and pharmaceutical industry.

The outbreak of COVID-19 severely disrupted the supply chain, retail distribution, and consumer behavior for numerous products and services globally. However, botanical ingredients witnessed a surge in demand during the pandemic owing to increased consumer preference for health & wellness products, which supports overall well-being.

In March 2020, considerable demand for traditional medicine was observed when a Traditional Chinese Medicine (TCM) hospital recommended using herbs to fight COVID-19. Various dietary supplement products associated with joint health, obesity, anxiety, and vascular system are formulated using botanical ingredients.

The growing preference for an active and healthy lifestyle coupled with increased awareness regarding improving immunity due to the COVID-19 is expected to further fuel the demand for herbal supplements, which, in turn, will boost the product demand during the forecast period.

Source Insights

The spices segment led the market in 2020 accounting for a 28.3% share of the global revenue. The segment is expected to witness substantial gain over the forecast period due to changing lifestyles demanding healthy food that is convenient along with a popular trend of experiencing novel foods. The flower source segment is projected to have the fastest CAGR during the forecast period.

This can be attributed to changing lifestyles and inclination towards leading a luxurious and healthy lifestyle, which has contributed to the growth of horticulture along with the botanical flower industry. Fresh flowers are not only used for the beautification of homes and offices but also in cosmetics, dry herbs, natural dyes, potpourri, and medicines.

The herbs segment is expected to witness a CAGR of 7.3% during the forecast period on account of their extensive utilization of traditional medicines. Herb-based medicinal products are gaining importance globally on account of their health benefits, such as improved metabolism &immune system, and stabilization of hormones. Numerous themes, such as Ayurveda, Yoga, Homoeopathy, and Siddha, are gaining importance, thus, boosting the growth of herbs-based botanical ingredients.

Form Insights

The powder segment accounted for the largest market share of 61.0%, in terms of revenue, in 2020. Botanical ingredients, extracted in the form of powder, are widely utilized to enhance the palatability of food and beverages as well as preservatives. Products, such as HUM Nutrition’s and ESI beauty collagen raw beauty powder, which include American ginseng, Eleuthera root powder, and ashwagandha root powder in the U.S. market are boosting the industry growth owing to their characteristics, such as consistency in texture and restoring skin cells.

The liquid form is more suitable for making Ready-to-Drink (RTD) beverages, cold beverages, and beverage mixes. The growing popularity of RTD beverages, owing to their ease of consumption, strong nutritional profile, and easy availability, is expected to drive the demand for liquid form in the market. The bulk packaging of liquid form causes inconvenience in handling and occupies more space. On the contrary, powder form offers high shelf life, high solubility, cost-effectiveness, and consistent nutrient concentration. This is expected to hamper the growth of the liquid segment in the coming years.

Application Insights

The food and beverage application segment dominated the market in 2020 with over 34% share of global revenue. Botanical ingredients are increasingly being incorporated into various food & beverage applications owing to their unique flavor and health benefits. Food manufacturers are increasingly fortifying their products with nutritive ingredients, such as vitamins, minerals, and prebiotics, to improve their nutritional value. This trend is likely to increase the penetration of botanical ingredients in the food segment.

Beverages accounted for a significant share in the application segment in 2020 owing change in lifestyle of consumers, which have propelled the demand for RTD beverages. In addition, increasing efforts by the manufacturer to develop RTD beverages with different flavors and fortified botanical ingredients are benefitting the segment growth. Botanical ingredients are widely utilized by cosmetics manufacturers for preparing natural skincare formulations due to their antifungal, antimicrobial, antioxidant, skin conditioning, oral care, and humectant properties. Furthermore, the growing demand for natural and clean label cosmetic products is expected to generate significant growth opportunities for market growth.

The use of botanical ingredients in pharmaceuticals is one of the upcoming trends in the current market scenario. Growing demand for plant-based medicines and rising awareness about the benefits of botanical ingredients are likely to be the major factors driving the market over the forecast period. The rising prevalence of chronic conditions, such as arthritis, diabetes, and cardiovascular diseases, and advantages of botanical drugs as compared to synthetic drugs, such as cost-effectiveness, are the factors driving the product demand in dietary supplements applications.

Regional Insights

North America dominated the market and accounted for more than 35% share of global revenue in 2020. The high prevalence of various lifestyle diseases in the U.S. and Mexico, due to the rising cases of obesity, is expected to support the growth of the regional market. The product demand in Europe is increasing owing to a rise in the number of diet consciousness consumers, growing disposable income, and an increasing middle-class population. Moreover, the bakery industry in Europe has been significantly contributing to the demand for botanical-based nutrients, such as dietary fibers, with the high popularity of natural and healthy bakery products containing dietary fibers.

Asia Pacific is expected to witness the fastest CAGR during the forecast years. Factors, such as the penetration of organized and e-commerce retail, are driving the consumption of convenience food products incorporated with botanical ingredients. The region is characterized by the presence of a large number of suppliers. For instance, India, China, and Sri Lanka are the leading tea producers in the world. Moreover, several other medicinal, as well as non-medicinal botanicals, such as amla, hibiscus flower, and ginger, are extensively cultivated in the region.

Key Companies & Market Share Insights

The global market is highly fragmented and competitive owing to the presence of prominent and well-established players. The companies have a strong network of distributors and partnerships with farmers to achieve higher efficiencies across the value chain. Key companies are continuously involved in M&A and partnership activities to gain a competitive advantage over others. The M&A activities have enabled the market players to expand their product portfolios and geographical presence. Some of the prominent players in the global botanical ingredients market include:

• Indesso

• Lipoid Kosmetic AG

• The Herbarie at Stoney Hill Farm, Inc.

• International Flavors& Fragrances, Inc.

• Bell Flavors& Fragrances

• Rutland Biodynamics Ltd.

• Prakruti Products Pvt. Ltd.

• AmbePhytoextractsPvt. Ltd.

• The Green Labs LLC

• Berje, Inc.

• Umalaxmi Organics Pvt. Ltd.

• DSM

Botanical Ingredients Market Report Scope

Segments Covered in the Report

This report forecasts revenue growth at the global, regional, and country levels and provides an analysis of the latest industry trends in each of the sub-segments from 2017 to 2028. For the purpose of this study, Grand View Research has segmented the global botanical ingredients market report on the basis of form, source, application, and region:

• Form Outlook (Volume, Kilo Tons; Revenue, USD Million, 2017 - 2028)

  • Powder

  • Liquid

• Source Outlook (Volume, Kilo Tons; Revenue, USD Million, 2017 - 2028)

  • Herbs

  • Leaves

  • Spices

  • Flowers

  • Others

• Application Outlook (Volume, Kilo Tons; Revenue, USD Million, 2017 - 2028)

  • Food & Beverages

    • Food

      • Bakery & Confectionery

      • Sauces & Dressings

      • Others

    • Beverages

      • Energy Drinks

      • Sports Drinks

      • Functional Juices

      • Others

  • Dietary Supplements

  • Personal Care & Cosmetics

  • Pharmaceuticals

  • Others

• Regional Outlook (Volume, Kilo Tons; Revenue, USD Million, 2017 - 2028)

  • North America

    • U.S.

    • Canada

    • Mexico

  • Europe

    • Germany

    • U.K.

    • France

    • Spain

  • Asia Pacific

    • China

    • India

    • Japan

    • Australia

  • Central & South America

    • Brazil

    • Argentina

  • Middle East & Africa

    • South Africa