The essential oils market is expected to grow from US$ 13,687 million in 2022 to US$ 23,962 million by 2030; it is expected to record a CAGR of 7.2% from 2022 to 2030
Market Insights and Analyst View:
Essential oils are aromatic compounds that are derived from plants. The aromatic compound in essential oils gives them their unique scent & flavor. Steam distillation and mechanical processes such as cold pressing are used to extract essential oils. Lemon, lavender, rosemary, and tea tree are some of the most widely utilized essential oils for various end-use industries such as food & beverages, aromatherapy, personal care, cosmetics, animal feed, etc. the rising demand for natural flavors and extracts due to clean label trend is driving the demand for essential oils and further boost the essential oils market share in the forecast period.
Growth Drivers and Challenges:
Essential oils have antioxidant, antimicrobial, and anti-infective properties. Thus, they treat several health conditions, including stress, sleep disorders, immunity disorders, and depression. Therefore, due to the rising awareness about the benefits of essential oils, the essential oils market has grown significantly after the pandemic.
There has been an increase in adoption of natural and organic products across the globe, both in food and beverage products and personal care products. One of the major forces impacting the essential oils market has been the shift from synthetically derived products to natural products, which has caused manufacturers to focus on natural products. Essential oils are expected to be in high demand due to their health benefits in pharmaceuticals and medical applications in the forecast period. Moreover, essential oils can also be used in the production of household cleaning products and the supply of fresh air. Such activities have the potential to enhance the market. Aromatherapy was previously considered a supplementary therapy, but now, it is recognized as a mainstream therapy. Essential oils have calming effects, antidepressants, and anti-stress effects; thus, they are highly preferred in aromatherapy. These factors are anticipated to drive the essential oils market growth in the region.
Increasing adoption of organic ingredients in various food & cosmetic products boosts the demand for essential oil as consumers become more aware of the adverse effects of chemical and synthetic ingredients used in product formulation. For instance, as more customers are experiencing hair loss issues, they have started using organic oils, namely Viva Naturals, Mama Earth oil, and others that provide a variety of nutrients to the hair that helps in hair growth. Thus, a rising preference for organic oils is expected to boost the global essential oils market growth.
However, there is a demand and supply gap as manufacturers cannot meet the ever-increasing demand due to raw material shortages and price fluctuation. Also, the requirement of proper storage conditions and the instances of allergic reactions and irritation among consumers can hamper the essential oils market growth in the forecast period.
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Essential Oils Market: Strategic Insights
Market Size Value in US$ 13,687 million in 2022 Market Size Value by US$ 23,962 million by 2030 Growth rate CAGR of 7.2% from 2022 to 2030 Forecast Period 2022-2030 Base Year 2022
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Essential Oils Market: Strategic Insights
| Market Size Value in | US$ 13,687 million in 2022 |
| Market Size Value by | US$ 23,962 million by 2030 |
| Growth rate | CAGR of 7.2% from 2022 to 2030 |
| Forecast Period | 2022-2030 |
| Base Year | 2022 |
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Report Segmentation and Scope:
The "Global Essential Oils Market" is segmented based on type, category, application, and geography. On the basis of type, the essential oils market is segmented into lemon, tea tree, lavender, rosemary, eucalyptus, and others. Based on category, the market is bifurcated into organic and conventional. In terms of application, the market is classified into food & beverages, cosmetics & personal care, aromatherapy, household cleaning products, and others. The essential oils market based on geography is segmented into North America (US, Canada, and Mexico), Europe (Germany, France, Italy, UK, Russia, and Rest of Europe), Asia Pacific (Australia, China, Japan, India, South Korea, and Rest of Asia Pacific), Middle East & Africa (South Africa, Saudi Arabia, UAE, and Rest of Middle East & Africa), and South & Central America (Brazil, Argentina, and Rest of South & Central America)
- Sample PDF showcases the content structure and the nature of the information with qualitative and quantitative analysis.
Segmental Analysis:
The essential oils market is segmented based on type into lemon, tea tree, lavender, rosemary, eucalyptus, and others. The lemon segment holds a significant market share and is projected to register a significant CAGR in the essential oils market during the forecast period. Lemon oil is extracted from the peel of fresh lemons via steam extraction or, less often, through a cold-pressed process. It consists of the concentration of vitamin C and citric acid. Due to the therapeutic efficacy of lemon oil, the cosmetics and personal care industry uses lemon oil as the key active component of novel anti-aging and regenerative skincare products. This oil has high biological potential due to its natural origin and non-toxicity. It has antibacterial, antifungal, antiviral, anticancer, antioxidant, and immunomodulatory properties.
Moreover, lemon oil can improve mood, reduce stress, improve sleep, boost self-confidence, and improve physical and cognitive performance, as it is considered an adaptogen. Candles infused with citrus oils, including lemon oil, are used in aromatherapy to provide a calming and relaxing effect. People feel positive about their bodies when they smell the citrus scent. According to new research conducted by UK-based Sussex Computer-Human Interaction (SCHI) Lab, people felt lighter when they smelled the fragrance of fresh lemons. The scent of lemon induces self-love and positive body image. These factors are expected to provide lucrative opportunities to lemon oil manufacturers in the coming years and are also anticipated to drive the essential oils market growth.
- Sample PDF showcases the content structure and the nature of the information with qualitative and quantitative analysis.
Regional Analysis:
Based on geography, the essential oils market is divided into five key regions: North America, Europe, Asia Pacific, South & Central America, and Middle East & Africa. The essential oils market in North America is significantly growing with the thriving personal care & cosmetic industry. Further, there is a growing trend of using natural, vegan, and organic cosmetic products amongst consumers in the region due to a growing preference for chemical-free products, which tends to increase the sales of natural and organic essential oils. Moreover, consumers in the region are ready to pay extra for products that claim clean labels and are natural. Also, the growing food & beverage industry with rising consumption of products with natural ingredients is expected to drive the essential oils market growth in North America.
Moreover, in Europe, the presence of government organizations such as the European Federation of Essential Oils (EFEO) has been involved in the market growth. EFEO was formed to promote and safeguard the interests of stakeholders in the market value chain. This government organization is in discussions with the European Commission and the European Union (EU) Parliament to introduce legislation concerning essential oils. Such trends and supporting government policies have benefitted the market growth in the region. Furthermore, the presence of various industry players and easy feedstock availability are the major factors behind the dominating market share of Europe in the essential oil market.
Industry Developments and Future Opportunities:
Various initiatives taken by key players operating in the essential oils market are listed below:
- In October 2022, doTERRA – a US-based essential oil company, announced the launch of new sustainably sourced and natural essential oils. These newly launched essential oils include eucalyptus essential oil and guaiac wood essential oil.
- In April 2022, Phoenix Flavors and Fragrances, a leading compounder and developer of high-performance fragrances and flavors, announced the acquisition of Innovative Fragrances Inc. (IFI), an Atlanta-based developer and compounder of fragrance compounds that serve a diverse set of end markets, including candle, personal care, home fragrance, and other air fresheners. This acquisition of IFI aligns with the vision to create a market-leading developer of high-performance flavors and fragrances, supported by a strong team of regulatory experts and perfumers to meet customer-specific requirements and needs.
- In October 2020, the doTERRA launched various essential oil products and diffusers, including three new wellness programs designed in order to help people focus on their health.
COVID-19 Impact:
The COVID-19 pandemic affected almost all industries in various countries. Lockdowns, business closures, and travel restrictions in North America, Europe, Asia Pacific (APAC), South & Central America (SAM), and the Middle East & Africa (MEA) hampered the growth of several industries, including the food & beverage, household cleaning products, aromatherapy, personal care and cosmetic industries. The shutdown of production units negatively impacted the global supply chains, delivery schedules, manufacturing activities, and essential and nonessential product sales. Various companies witnessed delays in product deliveries and a slump in sales of their products in 2020.
Moreover, bans imposed by governments of various European countries, Asia Pacific, and North America on international travel compelled companies to temporarily discontinue their partnership and collaboration plans. All these factors impede various industries in 2020 and early 2021, thereby hampering the growth of essential oils market growth. However, by the end of 2021, many countries were fully vaccinated, and governments announced relaxations in certain regulations, including lockdowns and travel bans. The relaxation of trade restrictions aided in import and export operations, positively impacting the essential oils market growth.
Competitive Landscape and Key Companies:
A few of the prominent players operating in the global essential oils market include Givaudan, Sensient Technologies Corporation, Symrise, International Flavors and Fragrances Inc, Firmenich SA, MANE, DSM, Elixarome Limited, BORDAS S.A, De Monchy Aromatics among others. These market players are adopting strategic development initiatives to expand, further driving the essential oils market growth.
Report Coverage
Revenue forecast, Company Analysis, Industry landscape, Growth factors, and Trends
Segment Covered
Type, Category, Application, and Geography
Regional Scope
North America, Europe, Asia Pacific, Middle East & Africa, South & Central America
Country Scope
This text is related
to country scope.
The List of Companies
1. Cargill, Incorporated
2. dôTERRA International LLC
3. E.I. du Pont de Nemours and Company
4. Firmenich SA
5. Givaudan SA
6. International Flavors and Fragrances Inc.
7. Koninklijke DSM N.V.
8. Mane SA
9. Sensient Technologies Corporation
10. Symrise
The Insight Partners performs research in 4 major stages: Data Collection & Secondary Research, Primary Research, Data Analysis and Data Triangulation & Final Review.
- Data Collection and Secondary Research:
As a market research and consulting firm operating from a decade, we have published many reports and advised several clients across the globe. First step for any study will start with an assessment of currently available data and insights from existing reports. Further, historical and current market information is collected from Investor Presentations, Annual Reports, SEC Filings, etc., and other information related to company’s performance and market positioning are gathered from Paid Databases (Factiva, Hoovers, and Reuters) and various other publications available in public domain.
Several associations trade associates, technical forums, institutes, societies and organizations are accessed to gain technical as well as market related insights through their publications such as research papers, blogs and press releases related to the studies are referred to get cues about the market. Further, white papers, journals, magazines, and other news articles published in the last 3 years are scrutinized and analyzed to understand the current market trends.
- Primary Research:
The primarily interview analysis comprise of data obtained from industry participants interview and answers to survey questions gathered by in-house primary team.
For primary research, interviews are conducted with industry experts/CEOs/Marketing Managers/Sales Managers/VPs/Subject Matter Experts from both demand and supply side to get a 360-degree view of the market. The primary team conducts several interviews based on the complexity of the markets to understand the various market trends and dynamics which makes research more credible and precise.
A typical research interview fulfils the following functions:
- Provides first-hand information on the market size, market trends, growth trends, competitive landscape, and outlook
- Validates and strengthens in-house secondary research findings
- Develops the analysis team’s expertise and market understanding
Primary research involves email interactions and telephone interviews for each market, category, segment, and sub-segment across geographies. The participants who typically take part in such a process include, but are not limited to:
- Industry participants: VPs, business development managers, market intelligence managers and national sales managers
- Outside experts: Valuation experts, research analysts and key opinion leaders specializing in the electronics and semiconductor industry.
Below is the breakup of our primary respondents by company, designation, and region:
Once we receive the confirmation from primary research sources or primary respondents, we finalize the base year market estimation and forecast the data as per the macroeconomic and microeconomic factors assessed during data collection.
- Data Analysis:
Once data is validated through both secondary as well as primary respondents, we finalize the market estimations by hypothesis formulation and factor analysis at regional and country level.
- 3.1 Macro-Economic Factor Analysis:
We analyse macroeconomic indicators such the gross domestic product (GDP), increase in the demand for goods and services across industries, technological advancement, regional economic growth, governmental policies, the influence of COVID-19, PEST analysis, and other aspects. This analysis aids in setting benchmarks for various nations/regions and approximating market splits. Additionally, the general trend of the aforementioned components aid in determining the market's development possibilities.
- 3.2 Country Level Data:
Various factors that are especially aligned to the country are taken into account to determine the market size for a certain area and country, including the presence of vendors, such as headquarters and offices, the country's GDP, demand patterns, and industry growth. To comprehend the market dynamics for the nation, a number of growth variables, inhibitors, application areas, and current market trends are researched. The aforementioned elements aid in determining the country's overall market's growth potential.
- 3.3 Company Profile:
The “Table of Contents” is formulated by listing and analyzing more than 25 - 30 companies operating in the market ecosystem across geographies. However, we profile only 10 companies as a standard practice in our syndicate reports. These 10 companies comprise leading, emerging, and regional players. Nonetheless, our analysis is not restricted to the 10 listed companies, we also analyze other companies present in the market to develop a holistic view and understand the prevailing trends. The “Company Profiles” section in the report covers key facts, business description, products & services, financial information, SWOT analysis, and key developments. The financial information presented is extracted from the annual reports and official documents of the publicly listed companies. Upon collecting the information for the sections of respective companies, we verify them via various primary sources and then compile the data in respective company profiles. The company level information helps us in deriving the base number as well as in forecasting the market size.
- 3.4 Developing Base Number:
Aggregation of sales statistics (2020-2022) and macro-economic factor, and other secondary and primary research insights are utilized to arrive at base number and related market shares for 2022. The data gaps are identified in this step and relevant market data is analyzed, collected from paid primary interviews or databases. On finalizing the base year market size, forecasts are developed on the basis of macro-economic, industry and market growth factors and company level analysis.
- Data Triangulation and Final Review:
The market findings and base year market size calculations are validated from supply as well as demand side. Demand side validations are based on macro-economic factor analysis and benchmarks for respective regions and countries. In case of supply side validations, revenues of major companies are estimated (in case not available) based on industry benchmark, approximate number of employees, product portfolio, and primary interviews revenues are gathered. Further revenue from target product/service segment is assessed to avoid overshooting of market statistics. In case of heavy deviations between supply and demand side values, all thes steps are repeated to achieve synchronization.
We follow an iterative model, wherein we share our research findings with Subject Matter Experts (SME’s) and Key Opinion Leaders (KOLs) until consensus view of the market is not formulated – this model negates any drastic deviation in the opinions of experts. Only validated and universally acceptable research findings are quoted in our reports.
We have important check points that we use to validate our research findings – which we call – data triangulation, where we validate the information, we generate from secondary sources with primary interviews and then we re-validate with our internal data bases and Subject matter experts. This comprehensive model enables us to deliver high quality, reliable data in shortest possible time.
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