In 2023, the global essential oil market was valued at USD 11.41 billion and is projected to expand at a compound annual growth rate (CAGR) of 10.55%. The market is expected to reach USD 12.47 billion in 2024 and USD 27.82 billion by 2032.
Essential oils, also known as aetheroleum oils, are non-water-soluble liquids derived from plants, containing volatile aromatic compounds. The growth of the market is driven by the increasing trend of green consumerism and a growing preference for natural alternatives in food preservation and sensory applications. Composed of complex and volatile compounds, essential oils are recognized for their effectiveness against infections, inflammation, fungi, and viruses, without the significant side effects typically associated with prescription medications.
As a result, essential oils are being increasingly used as alternatives to chemicals, pharmaceuticals, and drugs due to their health benefits and lower risk of adverse reactions. Their aromatic properties are also widely employed in conventional medicines and pharmaceuticals to neutralize unpleasant odors in certain substances.
These factors are expected to fuel the market's growth, as outlined in the report "Essential Oils Market, 2024-2032" by Fortune Business Insights™.
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List of Key Players Present in the Report:
- Biolandes SAS (France)
- Givaudan International SA (Switzerland)
- International Flavours and Fragrances Inc. (U.S.)
- Symrise AG (Germany)
- Enio Bonchev Production Ltd. (Bulgaria)
- The Lebermuth Company, Inc. (U.S.)
- Essential Oils of New Zealand (New Zealand)
- Phoenix Aromas & Essential Oils LLC (U.S.)
- Sydney Essential Oil Co. (Australia)
- Young Living Essential Oils (U.S.)
Segmentaton:
Citrus Segment Leads the Market Driven by Growing Consumer Preference
The essential oils market is divided into various types, including eucalyptus, rosemary, citrus, lavender, tea tree, peppermint, and others. Among these, the citrus segment holds the largest market share, thanks to its exceptional functional properties, wide availability, and appealing organoleptic qualities. The strong demand for citrus essential oils further reinforces its dominant position in the market.
Food & Beverage Segment to Drive Market Growth
The market is also categorized by application into spa & relaxation, food & beverages, personal care & cosmetics, pharmaceuticals & medicinal formulations, and others. The food & beverage segment is expected to lead market growth during the forecast period, driven by the increasing use of essential oils to enhance sensory characteristics, extend shelf life, and improve storage stability in food products.
Direct Distribution Channel Gains Popularity with Growing Awareness
The market is segmented by distribution channel into direct distribution, MLM (multi-level marketing) distribution, and retail distribution. The direct distribution channel currently holds the largest market share, fueled by consumers’ growing interest in experiencing essential oil fragrances firsthand. This trend is expected to drive further growth in this segment.
Report Coverage
The report offers:
- Insights into major growth drivers, restraints, opportunities, and potential challenges for the market.
- In-depth regional development analysis.
- A list of major industry players and their strategies.
- Information on the latest industry developments, including product launches, partnerships, mergers, and acquisitions.
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Drivers & Restraints
Growing Demand for Natural Ingredients to Boost Market Growth
Plant-based volatile oils play a crucial role in natural food preservation, particularly as concerns over synthetic food additives and their potential long-term health risks continue to grow. Essential oils have demonstrated effective antibacterial properties across a variety of food products, including milk, fish, meat, dairy products, and cooked rice.
These oils are highly concentrated; for instance, approximately 250 pounds of lavender flowers are needed to produce just one pound of lavender oil. The combination of increasing demand and limited supply is expected to drive up prices, potentially restricting their accessibility across various application sectors, particularly in developing economies.
Regional Insights
Europe to Dominate the Market Due to the Popularity of Plant-based Volatile Oils
In 2022, Europe is projected to hold the largest share of the essential oils market, driven by the growing adoption of essential oils in cosmetic formulations. The increasing popularity of aromatherapy in countries like the U.K., Germany, and France is also expected to significantly contribute to market growth.
North America is expected to secure the second-largest market share, with a substantial increase in demand for essential oils anticipated during the forecast period.
Competitive Landscape
Industry Associations a Key Focus for Leading Companies
The global essential oils market is highly fragmented due to the significant presence of local and private-label brands in various regions. Major companies, including International Flavors and Fragrances Inc., Givaudan International SA, and Symrise AG, are actively pursuing mergers and acquisitions to strengthen their market positions and expand their influence within the industry.
