Essential Oils Market expected to grow at a CAGR of 8.7% to reach US$ 15,618.8 million in 2026
According to a recent report by Research and Markets, the Essential Oils Market size was valued at US$ 8,008.6 million in 2018 and is expected to grow at a CAGR of 8.7% to reach US$ 15,618.8 million in 2026. The orange segment was the highest contributor, with US$ 3,058.7 million in 2018, and is estimated to reach US$ 6,217.5 million by 2026, at a CAGR of 9.3% during the forecast period.
Essential oils, also known as volatile oils or ethereal oils, are derived from leaves, stems, flowers, bark, roots, or other parts of a plant. They are obtained from various herbs and plants, such as orange, eucalyptus, cornmint, peppermint, citronella, lemon, lime, clove, and spearmint, using distillation methods such as steam and water distillation. These oils contain volatile aroma compounds and real essence of the plant from which it is derived. Essential oils are primarily used in cosmetics & toiletries, food items and beverages.
The major factor that boosts the market growth is the increase in consumer preference for natural and organic products be it cosmetics, food, or similar other product categories. This in turn, has led the manufacturers operating in such industries to develop products that contain natural additives. Thus, the rise in usage of essential oils among various end-user industries, coupled with factors such as rapid industrialisation, increase in disposable income, and improved standards of living in emerging economies, supplement the market growth. The factors that restrict the market growth are high price of essential oils, availability of synthetic substitutes, and limited availability of raw materials.
Government support and favourable regulations are expected to offer lucrative opportunities for market growth. Moreover, steady rise in demand for natural aromatic fragrances and flavours in spa and relaxation applications along with cosmetics and perfumes is anticipated to promote the demand for essential oils during the forecast period.
The essential oils market is segmented on the basis of product type, application, and region. The product type segment is further classified into orange, eucalyptus, cornmint, peppermint, citronella, lime, lemon, clove, spearmint, and others. By application, the essential oils market is classified into food & beverages, medical, cleaning & home, spa & relaxation, and others. The other applications include usage of essential oil in paints, textile industries, tobacco, paper manufacturing and agrochemicals. By region, the market is categorised into North America, Europe, Asia-Pacific and LAMEA.
Essential oils are generally extracted by distillation process, often by using steam. Other processes used in the production of essential oils are expression, solvent extraction, absolute oil extraction, cold pressing, and resin tapping. Essential oils find usage in perfumes, cosmetics, soaps, and various other products, for flavouring food & drink, and for adding scents to incense and household cleaning products. Essential oils are distinguished from the fatty vegetable oils, such as canola and sunflower, by the fact that they evaporate or volatise in contact with the air and usually possess a strong aroma. These products are complex mixtures of organic chemicals, the nature and relative proportions of which are determined by the genetics of the plant species, environmental factors (e.g. climate), agricultural factors (e.g. soil conditions, nutrition, time and conditions of harvesting and methods of post-harvest handling), and manner of extraction.
The chemicals present in essential oils may be classified as follows:
- Hydrocarbons of the general formula (C5H6)n-terpenes
- Oxygenated derivatives of these hydrocarbons
- Aromatic compounds having a benzenoid structure
- Compounds containing sulfur or nitrogen
The Essential Oils Market is driven by the impending requirement of introducing natural elements to treat diseases and for high nutrition diets, mandated by the FDA. Moreover, the market growth is largely influenced by the advent of novel usage of this oil in various applications such as flavour & fragrance, aromatherapies, and others. Furthermore, healing benefits are expected to be instrumental in governing peak sales and market penetration of market-approved essential oils.
However, high prices may act as the major restraint for the market. On the contrary, increasing demand for essential oil for the purpose of extending shelf life of food stuff is expected to provide opportunities for the Essential Oils Market growth.
The essential oils market is segmented on the basis of product type, application, and region. The product type segment is further classified into orange, eucalyptus, cornmint, peppermint, citronella, lime, lemon, clove, spearmint, and others. By application, the essential oils market is classified into food & beverages, medical, cleaning & home, spa & relaxation, and others. The others applications include usage of essential oil in paints, textile industries, tobacco, paper manufacturing and agrochemicals. By region, the market is categorized into North America, Europe, Asia-Pacific, and LAMEA.
According to the Essential Oils Market analysis by product, the orange segment was the most prominent category in 2018 and is expected to remain dominant during the forecast period. The spearmint segment is expected to grow at a modest CAGR of 7.8% throughout the forecast period.
According to the Essential Oils Market forecast, the food and beverages segment was the highest contributor to the market in 2018 and is expected to remain dominant through 2019-2026. However, the cleaning and home segment is expected to witness the fastest growth through the forecast period.
By region, North America was the most prominent market in 2018 and is expected to dominate the Essential Oils Market through 2019-2026. The key players in the industry have adopted a number of strategies such as product launch, expansion, and acquisition as their go-to strategies to stay competitive in the market.
Key findings of the study
- The Essential Oils Market was valued at $8,008.6 million in 2018 and is estimated to reach $15,618.8 million by 2026, growing at a CAGR of 8.7% through the forecast period.
- Based on product, the orange segment would witness the fastest growth, registering a CAGR of 9.3% during the forecast period.
- In 2018, based on application, the food and beverages segment held the highest share, accounting for nearly four-fifth of the global market share.
- In 2018, cleaning and home segment was the most prominent market and is expected to grow at a significant CAGR throughout the forecast period.
- US was the dominant country in 2018, accounting for a considerable share in the global Essential Oils Market share.
The key players in the Essential Oils Industry profiled in the report includes doTERRA International, Biolandes, Sydney Essential Oils Co. Pty Ltd., Young Living Essential Oils, Farotti SRL, The Lebermuth Company, Essential Oils of New Zealand, H.Reynaude & Fils, Moksha Lifestyle Products, and West India Species, Inc.
