Essential Oils Market 2020 and Forecast 2021-2027

                                          
Report Overview: Essential Oils Market


The global essential oils market demand was estimated at 136.97 kilotons in 2020 and looks set to grow at a compound annual growth rate (CAGR) of 6.4% from 2021 to 2027. The market is expected to be driven by increasing demand from major end-use industries, such as food and beverage, personal care and cosmetics, and aromatherapy. Several health benefits related to essential oils are projected to drive their demand in pharmaceutical and medical applications. Unlike most of the conventional medicines and drugs, essential oils have no major side effects. Such traits of essential oils are projected to be the major factor for market growth. In addition, rising prevalence of health problems, such as cardiovascular problems, Alzheimer’s, and bronchitis, is creating more demand for beneficial essential oils in aromatherapy applications.

Rising demand for organic products is another factor influencing consumer trends. Further implementation of regulations favoring the use of environmentally friendly ingredients in cosmetics and the food and beverage industry has awakened peoples interest to seek products made from natural ingredients. The industry has witnessed a sharp increase in demand for 100% plant-based oils that are devoid of synthetic fragrances and animal-derived components. As a result, the majority of population is turning to organic products to gain health benefits.

A majority of consumers demand essential oils for various purposes such as for enhancing air freshness at home by adding drops of essential oils in aroma pots or aroma diffusers, which diffuse oil in the form of atomized particles, and in aroma bath by adding oils to the water, etc. Young women use essential oils for making homemade cosmetics owing to their natural content and medicinal benefits.

Essential oils are produced from organic plant matter and they must conform to various regulations and standards for companies to conduct trade globally. Most companies producing essential oils are multinational corporations that initiate various Corporate Social Responsibility (CSR) activities in order to remain beneficial and withhold high reputation among their stakeholders. These large organizations often neglect the actual detrimental effects of their operations on the environment.
International organizations such as the United Nations (UN) and the European Union (EU) have laid down specific regulations and guidelines for the production, harvesting, and processing of flowers and aromatic crops. The United Nations Industrial Development Organization (UNIDO) and the Food and Agriculture Organization of the United Nations are entities assigned to regulate and control the overall post-harvest processing operations in developing nations, mainly for herbs, spices, and essential oils. The European Federation of Essential Oils (EFEO) has also been initiated by the EU to represent, protect, and promote the interests of trade and production of essential oils as well as related products across Europe.

Product Insights: Essential Oils Market

The orange oil emerged as the prominent product segment in 2019 with a volume share of approximately 23.0%. Major end-use industries such as cosmetics are progressively using orange essential oil for developing sensory appeal and improving the product value. This oil is believed to promote elasticity and firm and tone up the skin. It is also known to treat stretch marks, dermatitis, and acne. The oil also helps in enhancing the quality of skin, nails, and hair, thus boosting their popularity among young women. Growing working women population, along with their increase in disposable income, is expected to increase the segment growth.

Peppermint oil is also considered one of the most versatile essential oils as it can be used internally, topically, and aromatically. The major ingredients present in this oil are menthone and menthol. Healthcare applications of peppermint oil include the treatment of headaches, cold, sinus, and muscle pain. Companies in the peppermint oil market can be divided into international and local buyers. Local/domestic buyers include small-scale pharmaceutical, chemical, flavoring, and food companies. International buyers can be categorized into personal healthcare, cosmetics, flavor and fragrance, and aromatherapy industries with a global presence, thus triggering the demand for these oils.

Application Insights: Essential Oils Market

Spa and relaxation held the largest volume share of more than 39.0% in 2019 and is projected to witness significant growth over the forecast period 2021-2027. The growth of this segment has been primarily attributed to the changing lifestyle of consumers around the world. Busy and hectic lifestyle has created a significant requirement for stress-relieving therapies, which is driving the demand for aromatherapy.

Food and beverage emerged as one of the major application segments in 2019 with a volume share of 38.6% and is expected to expand at the fastest CAGR from 2020 to 2027. Ascending demand for natural, safe, and minimally processed food products across the globe emerged as the major factor expanding the application scope of essential oils in food and beverage applications. Antimicrobial properties of these oils help preserve food and beverage products for a longer duration. Growing focus of food and beverage manufacturers on increasing product shelf life without compromising quality is another major factor boosting the growth of this application segment.

Personal care emerged as another important segment within spa and relaxation in the global market. Essential oils are majorly used in cosmetics, toiletries, and fragrances. In personal care, they are used in various applications, including beautifying the hair and skin, makeup, and color cosmetics.

Furthermore, these oils are used for cleaning the teeth, gums, and mouth, and in soaps, shampoos, and baby products. General hygiene is another major application of essential oil in the personal care segment. Rising awareness about using natural and organic products is boosting the growth of the natural ingredient segment among personal care products, which is positively impacting the essential oil industry growth. They are also widely used in perfumes, body sprays, and air fresheners.

Sales Channel Insights: Essential Oils Market

Direct selling emerged as the key sales channel in 2019 with a volume share of over 70.0%. Increasing awareness among people regarding essential oil has given rise to more retail sales, especially through convenience stores. However, top players such as doTerra and Young Living Essential Oils have adopted multi-level marketing strategies to expand their business and improve their sales. Furthermore, most of the importers and wholesalers have launched websites for online sales, along with their existing over-the-counter sales. Distribution channels for selling the products are likely to become complex as some sellers focus purely on online sales to increase their geographic reach.

In line with this, they attract and recruit several consumers as independent distributors by offering compensation plans and providing attractive discounts as well as gifts.  In recent years, doTerra alone has managed to achieve 5 million global customers of which 70% are wholesale customers. These platforms help increase the reach of their products, spread awareness and eventually boost sales.

Regional Insights: Essential Oils Market

Europe lead the market with a share of 43.65% in 2019 in terms of volume. Presence of organizations such as the European Federation of Essential Oils (EFEO) has benefitted the industry growth in Europe. EFEO was formed to promote and safeguard the interests of stakeholders across the market value chain. The organization is in discussions with the European Commission, along with the EU Parliament, to amend or introduce legislation concerning essential oils. Such trends have benefitted the market growth in the region. Easy feedstock availability and the presence of various industry players are the major factors behind the robust market growth in Europe. Early developed economy, along with a higher standard of living, is contributing to the growth of key end-use industries. DOMINATING

Asia Pacific is projected to witness the fastest growth over the forecast period. The growth in this region is primarily attributed to the presence of a large population, along with various untapped markets, which are likely to attract key players’ attention to expand and establish their operation and distribution facilities in this region.

The outbreak of coronavirus in China in December 2019 and further spread to Italy have led to a lockdown in the country to prevent the spread of contagion. Due to the increasing number of patients and rising death count in the country, the Government has taken some preventive measures such a shutting down of industrial and commercial firms, such as manufacturing units, plants, shops, and factories, thus hampering production as well as import-export. These factors are estimated to result in huge economic losses in the region, which is further estimated to hamper the market growth in the short term.

Key Companies & Market Share Insights: Essential Oils Market

The market is highly fragmented due to the presence of a significant number of industry participants. Higher integration of key market players for raw material sourcing and distribution is expected to increase market competition. Colossal price competitiveness and technological advancement are some of the important factors affecting the demand for essential oils. The market is also characterized by balanced production capacities and different market size, which is projected to lower internal and higher profit margins rivalry among existing players. Some of the prominent players in the essential oils market include:

Key companies Profiled: Essential Oils Market Report

 	
Sydney Essential Oil Co. (SEOC)
 	
Biolandess SAS
 	
Young Living Essential Oils
 	
DoTerra
 	
Essential Oils of New Zealand
 	
Flavex Naturextrakte GmbH
 	
India Essential Oils
 	
H. Reynaud & Fils (HRF)
 	
West India Spices Inc.
 	
Farotti S. R. L.
 	
Falcon
 	
Ungerer and Company, Inc.
 	
The Lebermuth Company
 	
Rocky Mountain Essential Oils
 	
Moksha Lifestyle Products

This report forecasts revenue and volume growth at the global, regional, and country levels and provides an analysis of the latest industry trends and opportunities in each of the sub-segments from 2016 to 2027. For the purpose of this study, Trusted Business Insights 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, 2016 - 2027)

 	
Acorus Calamus
 	
Ajowan
 	
Basil
 	
Black pepper
 	
Cardamom
 	
Carrot Seed
 	
Cassia
 	
Cedarwood
 	
Celery
 	
Cinnamon
 	
Citronella
 	
Ciz-3 Hexanol
 	
Clove
 	
Cornmint
 	
Cumin Seed
 	
Curry Leaf
 	
Cypress
 	
Cypriol
 	
Davana
 	
Dill Seed
 	
De-Mentholised Peppermint
 	
Eucalyptus
 	
Fennel
 	
Frankincense
 	
Garlic
 	
Ginger
 	
Holy Basil
 	
Juniper Berry
 	
Lavender
 	
Lemon
 	
Lemongrass
 	
Lime
 	
Mace
 	
Mustard
 	
Neem
 	
Nutmeg
 	
Orange
 	
Palmarosa
 	
Patchouli
 	
Pepper Mint
 	
Rosemary
 	
Spearmint
 	
Tea Tree
 	
Turmeric
 	
Vetiver
 	
Others

Application Outlook (Volume, Tons; Revenue, USD Thousands, 2016 - 2027)

 	
Medical
 	
Pharmaceutical
 	
Nutraceuticals
 	
Food & Beverages
 	
Bakery
 	
Confectionery
 	
Dairy
 	
RTE meals
 	
Beverages
 	
Meat, Poultry & Seafood
 	
Snacks & Nutritional Bars
 	
Spa & Relaxation
 	
Aromatherapy
 	
Massage Oil
 	
Personal Care
 	
Cosmetics
 	
Hair Care
 	
Skin Care
 	
Sun Care
 	
Makeup and color cosmetics
 	
Toiletries
 	
Soaps
 	
Shampoos
 	
Mens Grooming
 	
Oral Care
 	
Baby Care
 	
Fragrances
 	
Perfumes
 	
Body Sprays
 	
Air fresheners
 	
Cleaning & Home
 	
Kitchen Cleaners
 	
Floor Cleaners
 	
Bathroom Cleaner
 	
Fabric Care

Sales Channel Outlook (Volume, Tons; Revenue, USD Thousands, 2016 - 2027)

 	
Direct Selling
 	
Others