Essential Oils Market

Market Overview:

The global essential oils market size reached US$ 12.2 Billion in 2023. Looking forward, IMARC Group expects the market to reach US$ 24.5 Billion by 2032, exhibiting a growth rate (CAGR) of 7.8% during 2024-2032. The escalating consumer awareness, widespread product utilization for therapeutic and medicinal usage, imposition of favorable regulatory support, rising product demand across various sectors, surge in e-commerce platforms, and continuous research and innovation in the extraction methods are some of the major factors propelling the market.

Essential oils refer to concentrated extracts that capture the natural essence of the plant. It includes lavender, peppermint, lemongrass, tea tree, rosemary, cedarwood, and eucalyptus oils. They are obtained through various processes, such as steam distillation and cold pressing. Essential oils are widely used in aromatherapy, massage therapy, flavoring food, enhancing beauty products, medicinal treatments, household cleaning products, pest control, skin care, air freshening, and treating minor health issues. They improve digestion, enhance sleep quality, strengthen the immune system, reduce anxiety and stress, uplift mood, and alleviate headaches.

The rising product demand across various sectors, such as cosmetics, food and beverages (F&B), pharmaceuticals, and cleaning agents, owing to their multifunctional properties, including flavor enhancement, fragrance, and therapeutic effects, is propelling the market growth. Additionally, the surge in e-commerce platforms, which allow consumers to explore and purchase a wide array of products, is positively influencing the market growth. Furthermore, continuous research and innovation in the extraction methods, coupled with the development of new blends and formulations, are acting as another growth-inducing factor. Apart from this, the increasing disposable income across the globe, which is enabling more individuals to invest in premium and wellness products, such as essential oils, is strengthening the market growth. Other factors, including the rising cultural shift towards holistic well-being, increasing demand for ethically sourced products, and aggressive marketing and promotional campaigns by manufacturers, are anticipated to drive the market growth.

Essential Oils Market Trends/Drivers:

The escalating consumer awareness

The growing consumer consciousness about the health benefits of natural and organic products is a primary driver in the essential oils market. This shift towards natural ingredients is due to a deeper understanding and demand for products that are perceived as pure, safe, and beneficial. Furthermore, consumers are becoming more informed, owing to the easy accessibility of information online, and are actively seeking alternatives to synthetic and chemical-laden products. Additionally, increasing educational campaigns by governmental bodies and private organizations to increase awareness about the benefits of natural substances like essential oils is contributing to the market growth. Moreover, the growing emphasis on transparency in ingredient sourcing and the traceability of natural products is further bolstering the market growth.

The rising product utilization for therapeutic and medicinal usage

Essential oils are extensively used in traditional medicine across various cultures, and their therapeutic properties are now being recognized and utilized in modern healthcare and wellness practices. They are being employed for a range of purposes, including pain management, stress reduction, and treating certain ailments, such as digestive disorders. Furthermore, the rise of aromatherapy, where essential oils are used to enhance physical and psychological well-being, is positively influencing the market growth. Additionally, medical practitioners and therapists are increasingly integrating essential oils into their practices, supported by a growing body of scientific research that validates their efficacy. In addition, the increasing focus on health and immunity is further bolstering the demand for essential oils in preventive and supportive care.

The imposition of favorable regulatory support

Favorable regulations and policies promoting natural and organic products have had a significant impact on the essential oils market. Government bodies and international organizations are increasingly recognizing the benefits of natural products and are formulating standards and guidelines that facilitate their production, certification, and marketing. Furthermore, these regulations often promote ethical sourcing, quality control, and transparent labeling, thereby building consumer trust and confidence. In addition to this, governments are providing incentives, funding, and support to farmers and manufacturers to encourage the production of natural ingredients, such as essential oils. This proactive regulatory environment not only ensures the safety and integrity of the products but also fosters innovation and growth within the industry. Moreover, this institutional support acts as a catalyst in the market, providing a structured and supportive framework that aligns with the global shift towards natural and sustainable living.

Essential Oils Industry Segmentation:

IMARC Group provides an analysis of the key trends in each segment of the global essential oils market report, along with forecasts at the global, regional and country levels from 2024-2032. Our report has categorized the market based on product, application, and sales channel.

Breakup by Product:

• Cedarwood Oil
• Eucalyptus Oil
• Lavender Oil
• Lemongrass Oil
• Rosemary Oil
• Tea Tree Oil
• Ylang Ylang Oil
• Others
   

Tea tree oil dominates the market

The report has provided a detailed breakup and analysis of the market based on product. This includes cedarwood oil, eucalyptus oil, lavender oil, lemongrass oil, rosemary oil, tea tree oil, ylang ylang oil, and others. According to the report, tea tree oil represented the largest segment.

Tea tree oil is dominating the market as it is commonly used in skincare products, hair care, household cleaning, and even as a natural antiseptic. Its wide-ranging applications across various industries contribute to its strong market position. Furthermore, it is well-regarded for its therapeutic properties, such as its antimicrobial and anti-inflammatory effects. It is often used in treating various skin conditions, including acne, and in promoting wound healing. In addition, the heightened awareness among consumers regarding the specific benefits of tea tree oil is acting as another growth-inducing factor. Apart from this, the shifting trend towards natural and organic products is facilitating the demand for tea tree oil as an organic alternative to many synthetic ingredients. Its purity and natural origin also resonate with the increasing preference for clean and green products.

Breakup by Application:

• Medical
  • Pharmaceutical
  • Nutraceuticals
• Food and Beverages
  • Bakery and Confectionery
  • Beverages
  • Meat, Poultry and Seafood
  • Others
• Spa and Relaxation
  • Aromatherapy
  • Personal Care
  • Cosmetics
  • Toiletries
  • Others
• Cleaning
  • Kitchen Cleaners
  • Floor Cleaners
  • Bathroom Cleaner
  • Others
• Others
   

Spa and relaxation hold the largest share in the market

A detailed breakup and analysis of the market based on the application has also been provided in the report. This includes medical (pharmaceutical and nutraceuticals), food and beverages (bakery and confectionery, beverages, meat, poultry and seafood, and others), spa and relaxation (aromatherapy, personal care, cosmetics, toiletries, and others), cleaning (kitchen cleaners, floor cleaners, bathroom cleaner, and others), and others. According to the report, spa and relaxation accounted for the largest market share.

Essential oils are widely used in spas owing to their calming and therapeutic effects. They help to promote relaxation, alleviate stress, and enhance overall well-being, thus aligning perfectly with the primary goals of spa therapies. Furthermore, they are also used in aromatherapy to affect mood and promote health. The sensory experience created by essential oils aids in offering unique and personalized relaxation. In addition, essential oils provide spas with the opportunity to offer customized treatments tailored to individual preferences and needs. Different oils can be blended to create specific effects, adding to the allure of personalized spa experiences. Apart from this, their inclusion enhances the perception of luxury and premium care in spa services. They add an exclusive touch to treatments, elevating the spa experience and attracting a discerning clientele.

Breakup by Sales Channel:

• Offline Stores
• Online Stores
   

Offline stores hold the largest share in the market

A detailed breakup and analysis of the market based on the sales channel has also been provided in the report. This includes offline stores and online stores. According to the report, offline stores accounted for the largest market share.

Offline stores are dominating the market as they provide sensory experience where customers can smell, touch, and experience the product first-hand. Furthermore, the presence of trained staff in offline stores that can provide personalized recommendations and guidance on the usage and benefits of different essential oils is supporting the market growth. This expert advice often plays a crucial role in the purchasing decision, especially for new or less-informed customers. In addition, offline stores offer the advantage of immediate purchase and possession, which can be appealing for those looking for immediate use or gifts. Moreover, the ability to purchase directly from reputable retailers or brand outlets can build confidence in the product's origin and quality.

Breakup by Region:

• North America
  • United States
  • Canada
• Asia-Pacific
  • China
  • Japan
  • India
  • South Korea
  • Australia
  • Indonesia
  • Others
• Europe
  • Germany
  • France
  • United Kingdom
  • Italy
  • Spain
  • Russia
  • Others
• Latin America
  • Brazil
  • Mexico
  • Others
• Middle East and Africa
   

Europe exhibits a clear dominance, accounting for the largest essential oils market share

The report has also provided a comprehensive analysis of all the major regional markets, which include North America (the United States and Canada); Asia Pacific (China, Japan, India, South Korea, Australia, Indonesia, and others); Europe (Germany, France, the United Kingdom, Italy, Spain, Russia, and others); Latin America (Brazil, Mexico, and others); and the Middle East and Africa. According to the report, Europe accounted for the largest market share.

Europe has a comprehensive regulatory environment that emphasizes quality, safety, and sustainability. These regulations foster trust and encourage the production and consumption of high-quality essential oils. Furthermore, many European countries have a rich tradition of herbal medicine and natural remedies which utilize essential oils. Additionally, the increasing consumer preference for natural, organic, and sustainable products is acting as another growth-inducing factor. Apart from this, Europe hosts some of the leading research institutions and companies focused on essential oils. This continuous innovation and scientific validation of the benefits of essential oils is further bolstering the market growth. Moreover, the presence of well-established distribution channels, both online and offline, which facilitate the accessibility of essential oils to a wide consumer base, is positively influencing the market growth.

Competitive Landscape:

Leading companies are investing in continuous research and innovation to develop new extraction methods, blends, and formulations, which aid in creating differentiated products that cater to specific consumer needs and preferences. Additionally, they are broadening product portfolios to include a diverse range of essential oils and related products to cater to various applications across industries, such as cosmetics, pharmaceuticals, food and beverages (F&B), and more. Apart from this, key players are forming partnerships and collaborations with other companies, research institutions, or industry experts to leverage complementary strengths and extend market presence. In addition, top companies are implementing sustainable sourcing, production, and packaging methods to align with the growing consumer demand for eco-friendly products. Besides this, they are entering new geographic markets or expanding within existing ones through strategic investments, acquisitions, or localized marketing efforts.

The report has provided a comprehensive analysis of the competitive landscape in the market. Detailed profiles of all major companies have also been provided. Some of the key players in the market include:

• Biolandes
• doTerra
• Essential Oils of New Zealand Ltd.
• Falcon Essential Oils
• Farotti S.R.L.
• FLAVEX Naturextrakte GmbH
• H. Reynaud & Fils
• India Essential Oils
• Moksha Lifestyle Products
• Rocky Mountain Oils LLC
• Sydney Essential Oil Co. (SEOC)
• The Lebermuth Company
• Ungerer Limited
• Young Living Essential Oils.

Recent Developments:

• In October 2020, doTerra launched essential oil products such as toothpaste, bath bars, diffusers, and hand wipes.
• In February 2020, Ungerer Limited was acquired by Givaudan to extend its capabilities in core flavors and fragrance activities.
• In May 2023, Young Living Essential Oils announced the release of two new products, namely, Season Essentials and Red Cedar Bliss Essential Oil.

Essential oils Market Report Scope:

Key Benefits for Stakeholders:

• IMARC’s report offers a comprehensive quantitative analysis of various market segments, historical and current market trends, market forecasts, and dynamics of the essential oils market from 2018-2032.
• The research study provides the latest information on the market drivers, challenges, and opportunities in the global essential oils market.
• The study maps the leading, as well as the fastest-growing, regional markets. It further enables stakeholders to identify the key country-level markets within each region.
• Porter's five forces analysis assist stakeholders in assessing the impact of new entrants, competitive rivalry, supplier power, buyer power, and the threat of substitution. It helps stakeholders to analyze the level of competition within the essential oils industry and its attractiveness.
• Competitive landscape allows stakeholders to understand their competitive environment and provides an insight into the current positions of key players in the market.