Essential Oils Market Share, Size, Trends, Industry Analysis Report, By Application (Medical, Food & Beverage, Spa & Relaxation, Fragrances, Cleaning & Home); By Sales Channel (Offline Stores, Online Platforms); By Product; By Region; Segment Forecast, 2021 - 2028

Report Summary

The global essential oils market was valued at USD 18.77 billion in the year 2020 and is expected to grow at a CAGR of 8.1% during the forecast period. Growing demand for the product from end-user industries such as food & beverages, aromatherapy, cosmetics, and personal care is expected to drive the market growth during the forecast period.

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The product has no significant side effects, unlike conventional drugs and medicines which are expected to increase its demand in healthcare. Health conditions such as bronchitis, cardiovascular problems, and Alzheimer’s can be treated using aromatherapy using essential oils.

Food preservation using essential oils is an organic alternative for synthetic preservatives further contributing to increasing demand in the food & beverages industry organics plants are used to produced essential oils and companies conducting global trade must follow strict regulations and standards.

Industry Dynamics

Growth Drivers
The market is expected to witness significant growth owing to the increasing demand for plant-based oils without animal-derived components and additional synthetic fragrances. Population across the globe is preferring organic products for their health benefits and this acts as a catalyst for the growth of the market.

Aromatherapy is now considered mainstream therapy with growing spa outlets in numerous locations and its benefit in psychological as well physiological health. Essential oils are used in aromatherapy for cosmetics and healing purpose and thus have huge growth opportunities.

Challenges
Essential oils have low yield as it is a concentrated compound. For the manufacturing of one pound of essential oil, it required 220 lbs. of the base flowers. This creates a limitation on the supply of essential oils and forms a barrier to industry growth.

Essential Oils Market Report Scope

The essential oils market is primarily segmented on the basis of product, application, sales channel, and region.

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Insight by Product

Orange oil contributed the highest share in terms of volume for the year 2020. End-user industries are using orange essential oil for refining product value by developing a sensory appeal. Orange essential oil helps in improving the quality of hairs, nails, and skin which created its high demand in young women for beauty-enhancing purposes.

Peppermint oil is known as multipurpose product as it can be used topically, internally, and aromatically. This oil has large demand in the pharmaceutical industry as it can be used in the treatment of muscle pain, sinus, cold, and headache. Global, as well as local demand for peppermint oil, is increasing owing to its use in cosmetics, aromatherapy, food, and flavoring.

Insight by Application

Based on the application the market for essential oil is bifurcated into cleaning and home, food & beverages, spa & relaxation, and medical. Spa and relaxation contributed the largest share in the revenue generation by application segment in the year 2020 accounted for a busy lifestyle among the youth population has formed a need for stress-relieving therapies.

Food & beverages occupied the second-largest share in the year 2020 and are expected to show substantial growth for the forecast period as essential oils consist of antibacterial properties which are helpful in the preservation of several food products and beverages.

Insight by Sales Channel

The global market for essential oils was dominated by direct sales channels in the year 2020 owing to increasing demand in retail sales as consumers are educated about the health benefits of consuming essential oils and preferring a nutritional alternative to the traditional oil.

Companies operating in these oils market are focusing on direct-to-consumer strategy by launching their websites to assist online consumer reach along with their retail sales. These new and improved approaches are expected to drive market growth through direct sales channels over the coming years.

Geographic Overview

Europe had the largest market share in the market in the year 2020 attributing to the presence of several players in the region along with the easy availability of feedstock. The industrial growth in the region is safeguarded with the presence of the European Federation of Essential Oils owing to potential growth opportunities over the forecast period.

Asia Pacific demand is expected to gain market growth over the forecast period with the large consumer base and opportunities in untouched market. Several market players are expected to enter the region with new and improve strategies to gain profitability.

Competitive Insight

Key players in the essential oils market includes Biolandes SAS, Sydney Essential Oil Co. (SEOC), India Essential Oils, DoTerra, Essential Oils of New Zealand, Young Living Essential Oils, Flavex Naturextrakte GmbH, West India Spices Inc., Ungerer Limited, H. Reynaud & Fils (HRF), Farotti S. R. L., Rocky Mountain Essential Oils, Falcon,The Lebermuth Company, Moksha Lifestyle Products. The market is highly competitive and expected to create profit rivalry with integration of raw material outsourcing providers in the essential oil industry.