Essential Oils Market Size & Forecast

The Essential Oils Market is expected to reach $24.80 billion by 2031, at a CAGR of 8.8% from 2024 to 2031. The growth of this market can be attributed to several factors, including the increasing consumer preference for natural and organic products, the growing demand for essential oils from the aromatherapy industry, the rising awareness about the health benefits of essential oils, and the increasing concerns regarding the use of synthetic ingredients. However, the limited availability of raw materials and potential side effects or allergic reactions associated with certain essential oils may restrain market growth.

Moreover, the increasing demand for essential oils in the personal care and cosmetics industry and emerging countries are expected to create market growth opportunities. However, the proliferation of counterfeit products poses a significant challenge to the market’s growth.

Additionally, the adoption of sustainable production practices is a prominent trend in the essential oils market.

Essential Oils Market Growth Drivers

Increasing Consumer Demand for Natural and Organic Products Boosts the Demand for Essential Oils

In recent years, the rising health concerns regarding artificial ingredients have contributed to a surge in demand for natural and organic products, thereby bolstering the growth of the essential oils market. As consumers become more health-conscious and aware of the potential risks associated with synthetic chemicals and processed ingredients, they are increasingly seeking out healthier alternatives. Essential oils offer a plant-based, environmentally friendly option for use in personal care, household products, and food, aligning with consumer preferences for natural products. According to Tate & Lyle Proprietary Research, over 84% of consumers across 14 countries reported reading ingredient labels and opting for beverages without artificial ingredients in 2020. According to the FiBL, organic food sales reached USD 142.3 billion (EUR 135 billion) in 2022. Consequently, various sectors, such as personal care & cosmetics, and household products, are witnessing increased demand for natural and organic alternatives, emphasizing the importance of essential oils globally.

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Rising Demand from Aromatherapy Industry Drives Market Growth

Aromatherapy, a holistic practice involving the use of essential oils for therapeutic purposes, has gained significant momentum worldwide. As an alternative medicinal therapy, it aids in the recovery from various ailments, including cardiovascular disorders, pain, skin problems, respiratory ailments, cold and cough, digestion issues, immune system dysfunction, insomnia, anxiety, and wounds. With consumers increasingly seeking alternatives to conventional medical treatments, aromatherapy is becoming a popular choice for relaxation, stress relief, and promoting overall well-being. Essential oils such as lavender, peppermint, eucalyptus, jasmine, ylang-ylang, tea tree, and chamomile are commonly used in aromatherapy due to their distinct therapeutic properties. For instance, lavender oil is renowned for its calming and balancing effects, often used to alleviate stress, tension, headaches, insomnia, asthma, bruises, burns, colic, and flu. Peppermint, with its refreshing and invigorating scent, can help boost energy levels, clear nasal passages, stimulate circulation, relieve tension and anxiety, and enhance memory and alertness. As consumers continue to seek natural alternatives for relaxation, stress relief, and overall well-being, the demand for essential oils in aromatherapy is expected to grow, further propelling the essential oils market.

Essential Oils Market Growth Trend

Sustainable Production

In recent years, sustainable production has gained significant importance in the essential oils market due to growing concerns among consumers and industry stakeholders about the environmental impact of conventional practices. As a result, many essential oil manufacturers have adopted eco-friendly and ethical practices to minimize their environmental footprint and promote responsible sourcing. Sustainable production strategies include waste reduction techniques such as recycling and energy-efficient extraction methods. Biodiversity conservation has also become a focus, with businesses collaborating with local communities and organizations to preserve habitats and promote ethical harvesting practices. In response to consumer demand for greater transparency and traceability in the supply chain, companies are leveraging technologies to ensure the authenticity of sustainable claims. These eco-conscious practices are essential for essential oil producers to meet consumer expectations, maintain a competitive edge, and contribute to a greener future. In 2023, dōTERRA International, LLC (U.S.) received a SEAL award for Birch essential oil sourcing and production. This marks the second time the company has been acknowledged for its sustainability efforts by SEAL Awards (Sustainability, Environmental Achievement, and Leadership). Ultimately, the rising consumer interest in natural and organic products presents significant growth opportunities for key players in the essential oils market as they embrace sustainable production methods.

Essential Oils Market Growth Opportunities

Growing Demand for Essential Oils in the Personal Care & Cosmetics Industry

The personal care & cosmetics industry has witnessed a surge in demand for essential oils due to their numerous functional benefits and rising consumer preferences for natural and organic products. Essential oils are derived from various plants and herbs and are perceived as safe and natural alternatives to synthetic compounds, making them a popular choice among health-conscious consumers. In addition to their natural appeal, essential oils offer multiple functional benefits in personal care products. They possess antimicrobial, anti-inflammatory, and antioxidant properties that help improve skin and hair health. For instance, tea tree oil can combat acne-causing bacteria, while lavender oil soothes and calms irritated skin.

Furthermore, the application of essential oils in aromatherapy has gained significant momentum due to their therapeutic properties. The personal care industry has capitalized on this trend by incorporating essential oils into various products. Essential oils like rosemary, peppermint, and eucalyptus are often used in shower gels, shampoos, and body lotions to promote relaxation, stress relief, and mood enhancement. Moreover, the rising demand for personalized products, fueled by increasing consumer interest in unique offerings, higher disposable incomes, and a growing preference for high-quality cosmetics, has also contributed to the growing popularity of essential oils. As consumers seek more tailored solutions, essential oils, such as ylang-ylang, patchouli, frankincense, and others, gain traction in the market. Further, many luxury and niche fragrance brands are utilizing essential oils as key ingredients in their formulations. These specialized oils cater to individual preferences and needs and further drive growth and innovation in the essential oils sector.

Rising Demand from Emerging Countries

As developing countries continue to experience economic growth, the essential oils market is expected to witness a significant increase. This growth is driven by factors such as rising disposable incomes, rapid urbanization, changing consumer preferences, and growing demand from industries such as food & beverage and personal care & cosmetics. Developing countries in regions like Asia-Pacific, Latin America, and the Middle East & Africa are expected to experience a surge in demand for essential oils in the coming years. Countries like China and India, with their large and growing populations, contribute to the increased demand for essential oils across various industries, such as food & beverage, cosmetics, and pharmaceuticals.

Furthermore, advancements in infrastructure and the expansion of distribution channels in these regions are making it easier to access and distribute essential oils products. This ease of access has prompted many essential oil companies to invest in these emerging markets by establishing production facilities and distribution networks to meet the growing demand for essential oils. The trend of essential oils companies capitalizing on the opportunities presented by developing countries is expected to continue in the coming years. As a result, the rising demand from these emerging nations is anticipated to offer significant opportunities for the growth of the global essential oils market.

Essential Oils Market Analysis: Key Findings

By Source: In 2024, the Citrus Oil Segment to Dominate the Essential Oils Market

Based on source, the essential oils market is segmented into citrus, lavender, tea tree, cornmint, eucalyptus, geranium, clove, citronella, spearmint, lemongrass, peppermint, rosemary, cedarwood, and other sources. In 2024, the citrus segment is expected to account for the largest share of 43.2% of the essential oils market. The large market share of this segment can be attributed to the rising demand for citrus essential oil in the food & beverage industry for diverse applications, including flavoring and preservation, as well as its growing popularity in aromatherapy and personal care applications.

However, the spearmint segment is projected to witness the highest growth rate of 12.7% during the forecast period of 2024–2031. This growth is driven by the increasing demand for spearmint essential oil and its gaining popularity in aromatherapy and personal care products due to its refreshing scent and potential health benefits and increasing use in the food & beverage industry as a flavoring agent in various products, such as chewing gum, candies, and beverages.

By Type: the Organic Essential Oils Segment is Projected to Register a Higher CAGR during the Forecast Period

Based on type, the essential oils market is segmented into non-organic essential oils and organic essential oils. The organic essential oils segment is projected to register a higher CAGR during the forecast period of 2024–2031. The growth of this segment is mainly attributed to the growing number of health-conscious consumers, rising disposable incomes, rising interest in organic products and sustainability, and growing consumer demand for clean-label beauty products.

By Extraction Method: in 2024, the Distillation Segment to Dominate the Essential Oils Market

Based on the extraction method, the essential oils market is segmented into distillation, cold press extraction, carbon dioxide extraction, and other extraction methods. In 2024, the distillation segment is expected to account for the largest share of the essential oils market. The large market share of this segment is mainly attributed to its efficiency, versatility, scalability, and ability to produce high-quality essential oils. Further, steam distillation is the most popular, economical, and highly efficient in extracting essential oils from various plant materials, such as flowers, leaves, and spices.

By Application: in 2024, the Food & Beverage Segment to Dominate the Essential Oils Market

Based on application, the essential oils market is segmented into food & beverage, personal care & cosmetics, aromatherapy, pharmaceuticals, home care, and other applications. In 2024, the food & beverage segment is expected to account for the largest share of the essential oils market. The large market share of this segment can be attributed to several factors: the increasing consumer preference for natural ingredients, the rising popularity of plant-based and clean-label products, and the wide range of applications for essential oils. Moreover, essential oils are valued for their potential health benefits due to their antimicrobial, antioxidant, and anti-inflammatory properties.

However, the personal care & cosmetics segment market is expected to witness rapid growth during the forecast period. The growth of this segment can be attributed to the increasing consumer awareness about the importance of maintaining a healthy lifestyle, the rising demand for perfumery, and the growing popularity of clean-label beauty products. Furthermore, essential oils are renowned for their natural healing properties and therapeutic effects on various skin concerns, leading to a surge in demand for these oils in skincare products.

By Distribution Channel: in 2024, the Direct Selling Segment to Dominate the Essential Oils Market

Based on distribution channel, the essential oils market is segmented into direct selling and other distribution channels. In 2024, the direct selling segment is expected to account for the largest share of the essential oils market. The large market share can be attributed to the benefits provided by direct selling, including personalized customer experiences and the capability to offer tailored product recommendations.

Geographical Analysis

Asia-Pacific: Fastest-growing Regional Market

Based on geography, the essential oils market is divided into five major regions: North America, Europe, Asia-Pacific, Latin America, and the Middle East & Africa. In 2024, Europe is expected to account for the largest share of 41.7% of the essential oils market, followed by North America, Asia-Pacific, Latin America, and the Middle East & Africa. Europe’s major market share is mainly attributed to the high disposable incomes, high consumer awareness about the benefits of essential oils, increasing demand for natural and organic products, growing product innovations, and rising demand for personal care and cosmetic products in France and Germany.

However, the market in Asia-Pacific is projected to register the highest CAGR of 9.5% during the forecast period. The growth of this regional market can be attributed to several factors: the growing population, increasing disposable incomes, rapid urbanization, and rising awareness of the benefits of essential oils in aromatherapy and personal care. Additionally, changing consumer preferences, rising demand from China and India, and the rapid growth of the aromatherapy and wellness industry contribute significantly to this growth.

Essential Oils Market: Key Companies

The report offers a competitive analysis based on an extensive assessment of the leading players’ product portfolios, geographic presence, and key growth strategies adopted in the last 3–4 years. Some of the key players operating in the essential oils market are dōTERRA International, LLC (U.S.), ROBERTET SA (France), The Lebermuth Company, Inc. (U.S.), Young Living Essential Oils LC. (U.S.), Biolandes SAS (France), Phoenix Aromas & Essential Oils, LLC (U.S.), Sensient Technologies Corporation (U.S.), Givaudan SA (Switzerland), International Flavors & Fragrances Inc. (U.S.), Essential Oils of New Zealand Ltd (New Zealand), Sydney Essential Oil Co. (Australia), DSM-Firmenich AG (Switzerland), Farotti S. R. L. (Italy), Symrise AG (Germany), Down Under Enterprises Pty. Ltd. (Australia), and Aromaaz International Private Limited (India).

Essential Oils Industry Overview: Latest Developments from Key Industry Players

• In September 2023, dōTERRA International, LLC (U.S.) launched several new essential oils and essential oil blends at the dōTERRA global convention.

• In June 2023, Turpaz Industries Ltd. (Israel) acquired Food Base Kft. (Hungary), a company engaged in the production, development, and sale of flavors, herb extracts, and essential oils for the food & beverage industry. Through this acquisition, Turpaz aims to develop its business in Hungary by utilizing the development, production, and sales capabilities of Food Base.

• In September 2022, ROBERTET SA (France) launched an online sales platform, e-Robertet, for natural raw materials. This platform offers a wide range of essential oils, vegetal oils, and floral waters with absolute CO2 extracts.
• In February 2022, Down Under Enterprises Pty. Ltd. (Australia) launched its ORGANIC Lemon Myrtle Oil, certified to Organic NOP (USDA) and BioCE standards. The lemon myrtle oil’s antimicrobial efficacy allows for its potential use as a formulation preservative and an antimicrobial active in personal care.

Essential Oils Market Research Summary

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