U.S. Essential Oil Market Size, Share & Trends Analysis Report By Product (Eucalyptus, Lemon), By Application (Flavors, Fragrances), And Segment Forecasts, 2016 - 2024

Report Overview

The U.S. essential oil market size was valued at USD 3.4 billion in 2015 and is projected to expand at a CAGR of 9.0% over the forecast period. Over 200 types of essential oils are consumed globally, where the U.S. market plays a crucial role in the overall demand. Specific flavors and fragrances of these oils added to any product including food, therapies, and drinks are expected to drive the market.                             

Expansion of food and beverage industries and increasing consumer disposable income are some of the factors anticipated to contribute to the rising demand for flavors and fragrances produced using essential oils. These fragrances offer stimulation in massages, aromatherapy, and other relaxation techniques. 

Added health benefits of essential oils are expected to trigger their demand in pharmaceutical and medical applications. These oils do not exhibit any major known side effects, unlike other conventional medicines and drugs, thereby boosting the market growth. Major end-use industries such as cosmetics and personal care are increasingly utilizing essential oils to improve the sensory appeal, add fragrance to products, and increase the product value.

Rising demand for bio-based personal care products and aromatic cleaning agents is projected to stimulate the demand for personal care and home care products. Strong demand for organic processed foods and beverages is expected to contribute to the global industry growth. Increased use of flavors and fragrances in emerging countries is expected to drive the U.S. essential oil market owing to the expansion of end-use industries.

Key companies have established supply partnerships to reduce overall production costs. Local manufacturers focus on providing upgraded varieties of essential oils at affordable prices, but the limited availability of raw materials is likely to pose a significant challenge to these manufacturers. Most of the exotic essential oils are produced from rare crops and plants, which are either difficult to harvest or are very rare in nature. Restrictions on harvesting and cultivation of such trees and plants will probably add to the raw material scarcity.

Product Insights

Lemon oil holds a significant market share and its popularity has increased owing to its quick stain removal action and disinfectant and antibacterial properties. It is used in various applications such as personal care products, cleaning and laundry products, and many dietary supplements.

Eucalyptus oil is rapidly gaining popularity. Rising demand for natural substitutes over conventional medications to treat colds, sinus congestions, body pain, and fever is fostering the market growth. However, other products such as orange, asafetida, jasmine, rose, cardamom, chamomile, grapefruit, lime, and mustard are anticipated to account for over 70% of the essential oil demand in the U.S.

Application Insights

The flavors segment held the largest market share on account of growing demand for essential oils in exotic dishes and local cuisine as flavoring and coloring agents. Essential oils such as thyme, lemongrass, and rosemary provide great nutritive value to foods and improve the overall appeal of products with few drops, leading to a high value with less investment.

The fragrances segment is projected to generate the highest product demand during the forecast period. Increased use of essential oils in perfumeries and growing popularity of exotic fragrance in food and beverages have led to the growth of the application segment.

Rising application in personal care and oral care products to freshen odorous breath is also likely to foster market growth. The product has a refreshing fragrance, thereby promoting its application in perfumes and cosmetics. These factors are likely to boost the market growth over the forecast period.

Essential oils will observe high demand from the aromatherapy application segment owing to their rising popularity in aromatherapy, massages, stimulation, and relaxation techniques to heal skin, promote digestion, tone muscles, enhance circulation, and dispel viral disease.

Regional Insights

The U.S. essential oil market is driven by high consumer disposable income and expansion of the food and beverage, personal care, and home care industries. These factors are likely to contribute to the increased demand for flavors and fragrances that are produced using essential oils. Furthermore, concentration of cosmetic industries in the country and growing popularity of aromatherapy are expected to boost market growth. Absence of import duty rates and relaxed import rules and regulations are the major factors promoting the product demand in the U.S.

The U.S. is the largest importer as well as exporter of essential oils. It mainly exports to Canada, Japan, United Kingdom, Germany, and some other Asian countries. However, it imports majority of its requirements from France and India. It is also the largest importer of citronella oil, followed by other European countries such as France, United Kingdom, Germany, and Netherlands. Citronella oil is used as a natural bug repellent and a pesticide. It can also be used in medications. The country fulfills its demand for frankincense oil and sandalwood by importing them from Somalia, India, and other Central African countries.

Key Companies & Market Share Insights

Key players include Biolandes SAS, doTerra International, Young Living Essential Oils, Ungerer Limited, Aura Cacia, and The Nature’s Bounty Co. These companies supply their products to end-use industries such as medical, food and beverage, cleaning agents, household products, and spa and relaxation.

The U.S. essential oil market is characterized by a large number of market participants, along with the major players having high integration throughout the value chain. The companies have unified their operations to provide raw materials as well as manufacture the final product, thus cutting down the procurement and operational costs of raw material.  

U.S. Essential Oil Market Report Scope