Essential Oils Market Size, Share & Trends Analysis Report By Product (Orange, Cornmint, Eucalyptus), By Application (Medical, Food & Beverages, Spa & Relaxation), By Sales Channel, By Region, And Segment Forecasts, 2023 - 2030

Report Overview

The global essential oils market size was valued at USD 21.79 billion in 2022 and is anticipated to expand at a compound annual growth rate (CAGR) of 7.9% from 2023 to 2030. This is attributable to the increasing demand from major end-use industries such as food & beverage, personal care & cosmetics, and aromatherapy. Essential oils contain complex, volatile chemical compounds, which are known for their antifungal, antibacterial, anti-inflammatory, and antiviral properties. Unlike most conventional medicines and drugs, these oils have no significant side effects. Such factors are projected to be the major driving factor for market growth. Conventional medicines and drugs have pleasant-smelling aroma compounds to create appealing products, mainly for chemicals that emit odors. Essential oils are also steadily replacing most chemicals, drugs, and medicines owing to associated health benefits and decreased risk of side effects.

The rising demand for convenience and ready-to-eat meals, health and wellness foods, and technological advancements are expected to boost food flavors market growth. Rapid industrialization and increasing consumer disposable incomes in emerging economies such as China and India are also projected to foster the global food flavors market over the forecast period.

Essential oils such as rose, sandalwood, Melissa, and German chamomile, which are widely utilized in aromatherapy applications, are expensive owing to the difficult extraction process involved. The high price of critical essential oils used in aromatherapy is an important factor behind the slow growth of the aromatherapy industry in developing countries such as India, Malaysia, etc., compared to developed countries such as the U.K., France, and the U.S. However, growth in GDP and various untapped market opportunities in the Asia Pacific are the major factors attracting aromatherapy industry players to establish and expand their businesses in emerging economies such as India, China, and Indonesia.

Numerous forests have been chopped down to derive minimal amounts of oil. Several arable lands have also been converted into monoculture farming lands to cultivate a single plant or crop to derive a particular oil. Production of these crops and plants is undertaken by large multinational firms that disregard the environment and endanger numerous ecosystems. It is thus becoming increasingly difficult to cultivate enough plants to produce one pound of oil.

Product Insights

The orange segment dominated with the highest revenue share of 23% in 2022. Its high share is attributable to its ability to enhance the quality of skin, nails, and hair, thus boosting its popularity among young women. Major end-use industries progressively use orange essential oil to develop sensory appeal and improve product value. It is believed to promote elasticity and firmness and tone up the skin. It is also known to treat stretch marks, dermatitis, and acne. Moreover, the growing working women population and rising disposable income are expected to be the major drivers for this industry.

Peppermint oil is also considered one of the most versatile essential oils, as it can be used internally, topically, and aromatically. The significant ingredients present in this oil are menthone and menthol. Healthcare applications of peppermint oil include the treatment of cold, headaches, cold, muscle pain, and sinus.

Davana oil is extensively utilized for producing natural perfumes and flavoring agents. The antiviral, stimulant, nervine, and antiseptic properties of the oil make it suitable for use in various medical applications. Davanone, a sesquiterpene ketone, is the primary molecule responsible for insect deterrent and aromatic benefits of the essential oil. India is the leading producer and exporter of davana essential oil globally, while Germany, France, Australia, Singapore, and the U.S. are the major importers.

Sales Channel Insights

Direct selling accounted for over 40% of total sales in 2022. However, other sales channels, on account of increasing awareness of essential oil among people, have given rise to more retail sales, primarily through convenience stores. However, key players have adopted multi-level marketing strategies to expand their business and increase sales.

Most importers and wholesalers have launched websites for online sales and existing over-the-counter sales. The distribution channels for selling the products will likely become complex as some sellers focus purely on online sales to improve their geographic presence worldwide.

Companies offer compensation plans and attractive discounts to their distributors to improve their sales. For instance, doTerra has achieved 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.

Application Insights

Spa & relaxation dominated the global market with the highest revenue share of 40.17% in 2022. Its high share is attributable to the changing lifestyle of consumers worldwide. The antimicrobial properties of these oils are used to preserve food & beverage products for a longer duration. The growing focus of food & beverage manufacturers on increasing product shelf life without compromising quality emerged as another major driving factor for the growth of this application segment. Increasing demand for natural, safe, and minimally processed food products across the globe emerged as the major factor driving the application scope of essential oil in food & beverage applications.

The pleasant aroma of essential oils makes them ideal for use in personal care products such as cosmetics, toiletries, and fragrances, including perfumes, body sprays, and air fresheners. For perfume applications, essential oils are categorized as base notes, middle notes, and top notes according to their volatility. Moreover, the increasing consumer disposable incomes and growing awareness regarding the need to maintain a healthy lifestyle are expected to contribute to the demand for fragrances produced using essential oils.

These fragrances provide stimulation in aromatherapy and other relaxation techniques. Essential oils such as chamomile, cedarwood, peppermint, rose, eucalyptus, sandalwood, tea tree, lavender, jasmine, rosemary, and lemon are claimed to reduce stress and stimulate the mind. Moreover, lavender oil helps cure migraine problems, while rosemary oil helps increase concentration levels.

Personal care emerged as an important segment within spa & relaxation in the global essential oil market as they are used in stress relieving therapies. They beautify hair and skin, makeup, and color cosmetics. Further, these oils are used for cleaning the teeth, gums, and mouth and in soaps, shampoos, and baby products.

Rising awareness about using natural and organic products is boosting the natural ingredient segment among personal care products, positively impacting the essential oil industry. They are also widely used in perfumes, body sprays, and air fresheners.

Regional Insights

Europe dominated the global market with the highest revenue share of 43.3% in 2022. This is attributed to the vast population along with various untapped markets, which are likely to attract key players’ attention to expand and establish their operation and distribution facility in this region. In Europe, the presence of organizations such as the European Federation of Essential Oils (EFEO) has benefitted the industry growth. EFEO was formed to promote and safeguard stakeholders' interests across the market value chain. The organization is in discussions with the European Commission and 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 dominating market share of Europe in this market. The early developed economy, along with the higher standard of living, are several factors contributing to the development of key end-user industries.

Asia Pacific countries such as India, China, and Indonesia are pioneers in the industry and have emerged as the largest exporters of some of the most precious oils and extracts in the world, such as champaca extract, jasmine extract, davana oil, frankincense oil, sandalwood oil, spice oils, etc. The suitable weather conditions for agriculture, low-cost labor, and ample availability of raw materials are some of the factors acting as the driving forces for the growth of production in this region.

Rising awareness regarding the importance of a healthy lifestyle and increasing acceptance of natural products are projected to boost market growth in North America over the coming years. Factors such as high per capita income, tax benefits, and government subsidies attract global companies to start and expand their operation in this region. The region's growing inclination toward preventive healthcare is a major contributing factor to this scenario.

Key Companies & Market Share Insights

The essential oils industry is highly fragmented, with many industry participants such as Symrise and MANE. Higher integration of key market players for raw material sourcing and distribution is expected to increase market competition. Companies such as India Essential Oils, Young Living Essential Oils, and Biolandes have integrated their operations to provide raw materials and manufacture the final product to cut down on raw materials procurement and operation costs. This also helps companies to cater to the other industries served by the raw materials such as perfumes & deodorants, and food & beverages.

Colossal price competitiveness and technological advancement are some of the critical factors affecting product demand. The market is also characterized by balanced production capacities and different market sizes, which is projected to lower internal and higher profit margins rivalry among existing players. Some prominent players in the global essential oils market include:

• Takasago International Corporation

• Symrise

• MANE

• Flavex Naturextrakte GmbH

• Firmenich SA

• Synthite Industries Ltd.

• ROBERTET GROUP

• International Flavors & Fragrances Inc.

• Givaudan

• Falcon

• Norex Flavours Private Limited

• BMV Fragrances Pvt. Ltd.

• VedaOils

• MOKSHA LIFESTYLE PRODUCTS

• Ultra International

• VidyaHerbs

Essential Oils Market Report Scope

Global Essential Oils Market Segmentation

This report forecasts revenue growth at global, regional, and country levels and provides an analysis on the latest industry trends in each of the sub-segments from 2018 to 2030. For this study, Grand View Research has segmented the global Essential Oils market report based on product, application, sales channel, and region:

• Product Outlook (Volume, Tons; Revenue, USD Thousands, 2018 - 2030)

  • 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

  • Tangerine

  • Tea Tree

  • Turmeric

  • Vetiver

  • Ylang Ylang

  • Others

• Application Outlook (Volume, Tons; Revenue, USD Thousands, 2018 - 2030)

  • 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

        • Men's Grooming

        • Oral Care

        • Baby Care

      • Fragrances

        • Perfumes

        • Body Sprays

        • Air Fresheners

    • Cleaning & Home

      • Kitchen Cleaners

      • Floor Cleaners

      • Bathroom Cleaners

      • Fabric Care

• Sales Channel Outlook (Volume, Tons; Revenue, USD Thousands, 2018 - 2030)

  • Direct Selling

  • Others

• Regional Outlook (Volume, Tons; Revenue, USD Thousands, 2018 - 2030)

  • North America

    • U.S.

    • Canada

    • Mexico

  • Europe

    • Germany

    • France

    • U.K.

  • Asia Pacific

    • China

    • India

    • Japan

    • Taiwan

    • South Korea

    • Singapore

    • Australia

  • Middle East & Africa

  • Central America

  • South America