The global essential oil market is expected to reach USD 13.94 billion by 2024, according to a new report by Grand View Research, Inc. Increasing awareness as well as willingness to buy organic and natural products is expected to force market participants to employ essential oils in the production process. The shift of focus from synthetic to natural products is likely to trigger market growth over the forecast period.
Increasing demand for flavors & fragrances from various applications including personal care, home care, food & beverages, aromatherapy, etc. has prompted the essential oils demand as these oils are used as key ingredients in fragrances and flavors. Numerous other advantageous product properties such as antiseptic, aphrodisiac, anti-inflammatory, antidepressant, antispasmodic, diuretic, and tonic are expected to boost essential oil demand in industrial, medicinal, and domestic applications.
The lower raw material conversion rate for essential oils production in addition to unique processes requiring massive capital investment is expected to pose challenges to market participants. Limited raw material availability as different crops are grown in the various countries only to obtain high-quality products is also anticipated to challenge the market growth.
Further key findings from the report suggest:
Global essential oil market demand was 178.8 kilo tons in 2015 and is expected to exceed 370 kilo tons by 2024, growing at a CAGR of 8.4% from 2016 to 2024
Orange oil emerged as the major product and accounted for 29.4% of total market volume in 2015. It is also expected to witness the highest growth rate over the forecast period. Increasing orange oil demand in food & beverages, personal care and cleaning agents is expected to foster the segment growth.
Food & beverages industry was the leading consumer of essential oil and accounted for 34.6% of total market volume in 2015. It is also expected to witness the highest growth of 9.0% over the forecast period.
Essential oils demand from spa & relaxation application is expected to grow at a CAGR of 8.7% from 2016 to 2024. Essential oils have a great soothing and calming effect on the nervous system and are also beneficial in blood circulation stimulation, which has triggered the essential oils demand from spa & relaxation application segment.
Europe was the leading regional market and accounted for 43.5% of global demand in 2015. High demand for food & beverages and natural personal care products has spurred the regional market growth in upcoming years.
Asia Pacific essential oil market is expected grow at an estimated CAGR of 9.0% from 2016 to 2024 to emerge as the fastest growing regional market. Increasing interest and awareness regarding essential oils and natural products are expected to foster the regional market.
Some leading companies operating in the global market include Biolandes, Sydney Essential Oils, HRF, The Lebermuth Company, Young Living Essential Oils, doTerra, Essential Oils of New Zealand, Sydella Laboratoire, Farotti Essenze, Moksha Lifestyle Products, West India Spices Inc., Falcon and Ungerer Limited.