The global essential oils market demand was 226.9 kilotons in 2018. It is projected to expand at a CAGR of 8.6% from 2019 to 2025. Robust growth of end-use industries such as food & beverage, personal care & cosmetics, and aromatherapy has translated into an upswing in the demand for the product.
Several overall health benefits offered by these oils are anticipated to fuel their demand in pharmaceutical and medical applications. Unlike most of the conventional medicines and drugs, they have no major side effects. Growing inclination of consumers towards natural and organic products is also leading to increased usage of essential oils in cosmetics and food and beverages.
Rising awareness regarding health benefits of naturally sourced oils along with increasing number of people showing inclination towards aromatherapy is estimated to provide an upthrust to the market. Aromatherapy is gaining prominence, especially among urban population, due to changing lifestyles and rising media influence.
Increasing R&D activities, along with innovation in extraction techniques, are expected to bolster the growth of the market in emerging economies. High industrialization and urbanization rates in India, China Mexico, and Brazil have influenced end-use industries in the region, which in turn has led to greater demand for aromatics and flavors. Rising consumer disposable income and awareness regarding health benefits associated with essential oils is likely to work in favor of the market.
Orange oil was the most significant and fastest growing product segment, with a demand of 52.1 kilotons in 2018. Major end-use industries, such as cosmetics, are increasingly utilizing orange essential oils to improve product value and sensory appeal. This oil is believed to firm up the skin, promote elasticity, and tone up the skin as well as treat acne, dermatitis, and stretch marks. They also contribute in improving quality of hair, nails, and skin, boosting their appeal among women and female teenage consumers. Widening base of working women population and rising disposable income are poised to supplement the growth of the segment during the forecast period.
The demand for lavender oil is also projected to witness significant rise over the coming years owing to rising interest among the populace of developing countries in products of natural origin. Surging solvent demand in developed countries and an extensive range of end uses of the plant are also anticipated to spur the growth of the segment.
Shifting preference of consumers in developed countries towards natural products manufactured through environmentally sustainable processes is stirring up the demand for lavender oil. In addition, rising consumption of premium products and upgraded standard of living of consumers, especially in developing countries, are creating ample growth opportunities for lavender oil manufacturers.
In 2018, spa & relaxation emerged as the largest application segment in terms of revenue for cedarwood essential oil. Cedarwood essential oil is of four types, namely Himalayan cedarwood (cedrus deodora), Atlas cedarwood (cedrus atlantica), Texas cedarwood (juniperus mexicana), and Virginian cedarwood (juniperus virginia). Most commonly used types are Himalayan and Atlas cedarwood oils. The personal care industry widely utilizes these oils for formulating hair care and skin care products.
Increasing awareness regarding essential oils among public has resulted in emergence and acceptance of a wide range of retail channels such as accessory shops, home centers, convenience stores, and discount stores. Furthermore, most of the importers and wholesalers have launched websites for online sales, in addition to existing over-the-counter sales. Distribution channels for selling essential oils are likely to become complex as some sellers focus purely on online sales to increase their geographic reach.
The sales of essential oils through retail outlets (over-the-counter sales) are likely to register upswing over the forecast period. However, prominence of internet-based online sales is poised to increase over the coming years. This is slated to potentially replace traditional modes of sales to emerge as the leading channel in upcoming years.
The food & beverage application segment accounted for the leading revenue share in 2018. Essential oils are composed of naturally produced volatile compound mixtures with varying chemical properties. They primarily impart smell and taste to food and also induce therapeutic benefits into the food. They are preferred in the food industry mainly because of the biological activity and for the properties catered by them such as antioxidant, antifungal, and notably antibacterial.
Spa & relaxation emerged as the second largest application segment in terms of value in the global essential oils market in 2018. It is estimated to exhibit the fastest CAGR during the forecast period. Changing lifestyles of consumers are expected to contribute to the growth of the segment. Busy and hectic lifestyles are creating significant requirements for stress relieving therapies, which are fueling the demand for aromatherapy.
Essential oils are used in several personal care products, including cosmetics, toiletries, and fragrances. Further, these oils are also used for cleaning teeth, gums, and mouth, and in soaps, shampoos, and baby products. General hygiene is another major application of essential oils. Rising awareness regarding using natural and organic products is boosting the growth of the overall market. Essential oils are also widely used in perfumes, body sprays, and air fresheners.
Asia Pacific accounted for over 10.0% in terms of value in 2018. It is projected to witness the highest CAGR during the forecast period. The growth in this region can be primarily attributed to presence of huge population along with various untapped markets, which are anticipated to attract attention of key players to expand and establish their operational and distribution facilities in this region.
The economic growth of developing countries such as China and India is leading to a rise in urban class population, thereby bolstering the sales of essential oils in these countries. Increasing demand for essential oils from the flavors & fragrance industry is estimated to boost market growth over the forecast period.
Presence of organizations such as the European Federation of Essential Oils (EFEO) has propelled the growth of the market in Europe. EFEO was formed to promote and safeguard interests of stakeholders across the market value chain. The organization is also involved in discussions with EU Commission and EU Parliament to introduce or amend legislation about these oils. Such trends are benefitting market growth in the region.
Easy feedstock availability and presence of various industry players are the major factors supporting the growth of the market in Europe. Early developed economies along with higher standard of living are contributing to the development of key end-use industries.
The market is highly fragmented with a significant number of industry participants such as Young Living Essential Oils, doTerra, and Biolandess SAS. Higher integration of key market players for raw material sourcing and distribution is expected to augment market competition. Colossal price competitiveness and technological advancements are some of the important factors influencing product demand.
High entry barriers, owing to advancements in technology and cost of capital, are likely to maintain low competition among industry participants. The market is also characterized by balanced production capacities and different market size, which is poised to lower internal and higher profit margin rivalry among existing players.
Prominent players involved in the expansion and development of the market include DoTerra; Young Living Essential Oils; Essential Oils of New Zealand; The Lebermuth Company; NOW Foods; India Essential Oils; Flavex Naturextrakte GmbH; Ungerer and Company, Inc.; and West India Spices Inc.
Base Year for Estimation
Actual Estimates/Historical Data
2014 - 2017
2019 - 2025
Volume in Tons, Revenue in USD Thousands & CAGR from 2019 to 2025
North America, Europe, Asia Pacific, Middle East & Africa, Central America and South America,
U.S., Mexico, Canada, Germany, U.K., France, China, India, Japan, Taiwan, South Korea, Singapore, Australia
Revenue forecast, company share, competitive landscape, growth factors, and trends
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This report forecasts revenue and volume growth at the global, regional, and country levels and provides an analysis on the latest industry trends in each of the sub-segments from 2014 to 2025. For the purpose of this study, Grand View Research has segmented the global essential oils market report on the basis of product, application, sales channel, and region:
Product Outlook (Volume, Tons; Revenue, USD Thousands, 2014 - 2025)
Application Outlook (Volume, Tons; Revenue, USD Thousands, 2014 - 2025)
Food & Beverages
Meat, Poultry & Seafood
Snacks & Nutritional Bars
Spa & Relaxation
Makeup and color cosmetics
Cleaning & Home
Sales Channel Outlook (Volume, Tons; Revenue, USD Thousands, 2014 - 2025)
Regional Outlook (Volume, Tons; Revenue, USD Thousands, 2014 - 2025)
Middle East & Africa
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