The global essential oils market size is estimated to be valued at USD 8.8 billion in 2022 and is projected to reach USD 15.3 billion by 2027, recording a CAGR of 11.8% in terms of value.
The market is growing due to its wide application and increased awareness among consumers globally. Essential oils are being used in new domains as they have various health benefits and less known side effects. The North American region dominates the global essential market, owing to the growing trends of having a healthy lifestyle and consumers being more aware of the ingredients being used in their products. Furthermore, growing applications of essential oils have increased the R&D and new product innovations which are expected to drive the global market in the forecasted period.
Opportunities: Developing countries are expected to experience an increase in demand for essential oils over the coming years
Consumer preference for essential oils is rapidly increasing, and marketing campaigns are planned around highlighting their use and claimed health benefits. Developing countries such as China and India are expected to experience an increase in demand for essential oils over the coming years. The growing demand is also driven by population growth, leading to higher production of food & beverage, and cosmetics. The demand for essential oils is expected to grow at a moderate rate in economically backward countries and at an exponential rate in new & emerging markets of Asia Pacific countries. High demand, along with the low cost of extraction, is a major factor that would aid suppliers.
Challenges: Synthetic and substandard products available in the market act as substitutes to natural plant extracts and pose a challenge for the essential oil manufacturers
Synthetic substitutes for essential oils are easily available and are used in most synthetic cosmetics as cheaper substitutes. Several synthetic drugs are available in the market, which majorly includes antibiotics and anti-inflammatory drugs. Hence, several synthetic and substandard products available in the market act as substitutes to natural plant extracts and pose a challenge for the essential oil manufacturers. Moreover, in most of the cases it is highly difficult to recognize the synthetic additives and thus, implying the significance of proper labelling. FDA has established labelling requirements for fragrance in cosmetics and aromatherapy. FDA requires the list of ingredients under the Fair Packaging and Labeling Act (FPLA). This law is not allowed to be used to force a company to tell “trade secrets.” Fragrance and flavor formulas are complex mixtures of many different naturals and synthetic chemical ingredients, and they are the kinds of cosmetic components that are most likely to be “trade secrets.”
Information required for cosmetic essential oils or essential oil products includes the declaration of ingredients and caution statements. The FDA provides a Cosmetic Labeling Guide with full regulations for cosmetic labels and a very useful compliance guide for labeling over the counter (OTC) drugs. Such transparency is expected to mitigate the challenge of adulteration and promote the growth of the essential oils market.
key players in this market include Cargill, Incorporated (US), DSM (Netherlands), Givaudan (Switzerland), International Flavors & Fragrances Inc. (US), Sensient Technologies Corporation (US), Symrise (Germany), Robertet SA (France), MANE (France), doTERRA (US), NOW Foods (US), Lebermuth, Inc. (US), BIOLANDES (France), Norex Flavours Private Limited (India) and India Essential Oils (India).
