Essential Oils Market Size, Share, Industry, Forecast and outlook (2024-2031)

Global "Essential Oils Market" is Segmented By Type (Orange oil, Lemon oil, Peppermint oil, Lime oil, Citronella oil, Corn mint oil, Others), By Source (Organic, Conventional), By Method of Extraction (Solvent Extraction, Carbon dioxide extraction, Distillation, Cold press extraction, Others), By Application (Food & Beverages, Aromatherapy, Personal Care & Cosmetics, Pharmaceuticals, Home Care, Others), and By Region (North America, Latin America, Europe, Asia Pacific, Middle East, and Africa) – Share, Size, Outlook, and Opportunity Analysis,  2024-2031

Essential Oils Market Overview

The Global Essential Oils Market is expected to reach at a high CAGR during the  forecast period (2024-2031). Essential oil is a liquid obtained by distilling the plant's stems, leaves, seeds, roots, or flowers.

Lavender, tea tree, orange, lemon, peppermint, corn mint, and other essential oils are commonly utilized. These oils have several beneficial properties, such as antibacterial, antiviral, antifungal, and antimicrobial. These oils bypass the digestive system, making them advantageous to people with difficulty digesting or assimilating food. Essential oils are also highly oxygenating, making them excellent for newborns who cannot swallow tablets or capsules. The demand for essential oils is growing from all major end-use industries, including food and beverage, personal care, cosmetics, and aromatherapy. Essential oils are expected to grow in adoption in pharmaceutical and medical applications due to various health benefits.

Essential Oils Market Summary

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Essential Oils Market Dynamics

Rising inclination towards aromatherapy is expected to drive the essential oils market

Essential oil therapy is also referred to as aromatherapy. Customers are increasingly looking towards product labelling and safety claims while making purchasing decisions of personal care products. Despite the availability of many similar products, high-quality products at competitive prices will delight customers and increase product loyalty. The hospitality and tourism industries' strong growth incentives have pushed the benefits of aromatherapy nearer to common consumers.

Moreover, the increased demand for aromatherapy could be attributed to several factors, the most important being the general rise in income in the past decade. As incomes have increased, the consumers’ tastes and preferences have also shifted towards more sophisticated products. Spa visits have been increasing each year, according to the International Spa Association (ISPA).

According to the 2019 US Spa Business Study, key performance measures in the spa industry have increased across the board. In 2018, the spa industry established new highs in total revenue, spa visits, spa locations, revenue per visit, and total employees. Spa revenues totaled USD 18.3 billion, up 4.7 percent from USD 17.5 billion last year. In 2018, spa visits increased by 1.6 percent to 190 million. The number of spa sites in the United States increased by 1.8 percent to 22,160 in 2018, up from 21,770 in 2017. The average revenue per visit increased by 3% to USD 96.50 in 2018. This trend, combined with a growth in the use of natural active ingredients in pharmaceutical and cosmetic formulations, has bolstered the market for essential oils.

However, the increasing prevalence of adulterated products is expected to hamper the market growth to a certain extent. Essential oils that have been altered are extremely dangerous. They may cause a variety of adverse effects as well as permanent organ damage. The prevalence of adulterated and synthetic products is, however, due to the high pricing of essential oils. A liter of pure rose essential oil costs over USD 78 thousand, whereas a lesser quality of the same quantity costs roughly $200–300. Adulteration reduces the cost of a product and makes it more accessible to the general public, resulting in the widespread use of synthetic/adulterated products.

Essential Oils Market Segmentation Analysis

Orange oil segment held the largest market revenue share in the year 2020

To boost sensory appeal and product value, the orange essential oil is rapidly being employed in major end-use industries such as cosmetics. This oil is shown to improve the elasticity, firmness, and tone of the skin. It has also been used to treat stretch marks, dermatitis, and acne. Young women prefer the oil since it improves the appearance of their skin, nails, and hair. The segment is predicted to grow due to the growing number of working women and their increasing disposable income.

In 2020, food and beverage became one of the most important application segments. The growing demand for natural, safe, and minimally processed food items around the world has widened the scope of essential oil usage in food and beverage applications. The antimicrobial qualities of these oils aid in the preservation of food and beverage products for longer periods of time, thus enabling food and beverage makers to improve product shelf life without compromising on quality.

Essential Oils Market Geographical Share

Europe is expected to dominate the global essential oils market in the year 2020

Carvone, carvacrol, cinnamaldehyde, and citral, p-cymene, have been recognized as legally registered flavorings in the European Union's developed market. In Europe, cosmetic manufacturers are strongly promoting the use of these types of oils in their compositions. The growing popularity of aromatherapy in Germany, France, and the United Kingdom is likely to boost sales of plant-based volatile oils. Bulgaria produces the most organic rose and lavender oil in the world. The U.S. is the world's largest consumer of lavender oil, but the main buyers of Bulgaria's exports are Germany, France and Austria, according to the Bulgarian National Association of Essential Oils, Perfumery and Cosmetics. In terms of market share, North America is expected to be the second-largest region. Because of rising disposable income, new product launches, and increased use of natural components in cosmetic products, demand for the product in the region is likely to develop rapidly in the next few years. During the projection period, regions such as South America and Asia-Pacific are expected to see considerable market expansion. Several causes, such as growing worries about aging, UV damage, and hair loss, are expected to stimulate expansion in these regions. Furthermore, consumers in these regions are willing to spend a significant amount of money on personal care and cosmetics, indicating that the industry will continue to rise steadily.

Essential Oils Market Companies and Competitive Landscape

Some of the key market players in the global essential oils market are Biolandes SAS, Givaudan International SA, International Flavours and Fragrances Inc. Symrise AG, Enio Bonchev Production Ltd., The Lebermuth Company, Inc., Essential Oils of New Zealand, Phoenix Aromas & Essential Oils LLC, Sydney Essential Oil Co. and Young Living Essential Oils

To target a wider customer base, enhance its existing offerings, and strengthen its market position, key players in the market are pursuing strategies such as collaborations and acquisitions, product innovations, and partnerships. dôTERRA, for instance, announced many new essential oil products and diffusers in October 2020, as well as three new wellness programs to assist consumers focus on their specific health goals. The new products were unveiled at Pursue 2020 in September. Givaudan purchased Myrissi in February 2021 (France). Givaudan's long-term Fragrance & Beauty strategy would be enabled by the acquisition of Myrissi; their experience in AI would assist Givaudan in proposing new organoleptic approaches to consumers. Firmenich completed the acquisition of Les Dérivés Résiniques et Terpéniques ("DRT") (France) in May 2020, making Firmenich a global leader in the development and supply of high-quality, renewable, and naturally sourced ingredients. Firmenich would benefit from this acquisition by becoming a major player in renewable ingredients for perfumery and other applications.

COVID-19 Impact on Essential Oils Market

Positive impact on the essential oils market

The COVID-19 pandemic has had a beneficial impact on the global market. Essential oils are said to improve health and immunity, and there has been a huge increase in demand for these. People should incorporate ethereal oil into their everyday lives, according to industry experts, to improve their immune systems and obtain a healthy and peaceful mind in the midst of the chaotic pandemic crisis. The pandemic has increased global awareness of the importance of improving one's immune system. Aside from healthy eating and regular exercise, a healthy and quiet mind, as well as aromatherapy, can help to boost immunity. This is in line with the growing popularity of holistic medicine and the use of organic foods. During this pandemic, demand for items like tea tree oil, peppermint oil, and eucalyptus oil, which have aromatherapy and antibacterial and antiviral properties, has surged. Product sales are increasing at well-known brands like doTERRA and Young Living Essential Oils. As a result, industry participants are concentrating on improving their production and supply strategies in order to meet the product's rapidly increasing demand and improve its marketing approach. They're even looking to digitalization for help in meeting customer demand.