Global Essential Oils Market Outlook Anticipated to Generate a Revenue of $20,497.61 Million, Growing at a CAGR of 9.20% from 2021 to 2028Download Sample Reports Overview
The global essential oils market size is estimated to be valued at $20,497.61 million by 2028, surging from $10,349.81 million in 2020, at a noteworthy CAGR of 9.20 %.
Covid-19 Impact on Essential Oils Market
The global market for essential oils is estimated to experience higher rise amid the COVID-19 pandemic. This growth is the result of increased consumer interest towards their mental health by using aromatherapy, to fight against the pandemic situations. Therefore, demand for essential oils is also consequently projected to witness a rise.
Furthermore, according to a research article that was published in U.S News, they deliver current local and national news, in March 2021, in Children's Hospital Colorado and Seattle Children's Hospital, doctors are using essential oils such as lavender, peppermint, orange, and eucalyptus oils for treating children who lost their sense of smell because of COVID-19. Therefore, Covid-19 impact on essential oils market has been positive amid the pandemic.
Global Essential Oils Market Forecast Analysis
The enormous growth of the global essential oils market is mainly attributed to increasing public interest towards the aromatherapy. In aromatherapy, essential oils are mostly used as they are made of highly concentrated aromatic compounds that are extracted from stems, bark, roots, and other plant extracts; some of the examples of essential oils are tea tree oil, peppermint oil, lavender oil, clove oil, and other oil sponsored by doTerra, essential oil company. Also, according to National Association for Holistic Aromatherapy (NAHA), leading professional and education-based aromatherapy organization, aromatherapy is the best therapeutic application that uses essential oils for entire healing. Furthermore, according to the study by US Spa Industry, in 2019, the spa industry is witnessing higher growth. Such type of factors will drive the market for essential oil in the coming years and thus fuel the market growth.
The cost of essential oils is very high due to which not many people can afford personalized nutrition. Furthermore, best essential oils are highly concentrated compounds and therefore they have very low yield. For instance, for producing 1 pound of lavender oil, more than 220 lbs of lavender flowers are needed. Such key issues may create a negative impact on the market during the forecast period.
However, the increasing demand for natural ingredients may create huge opportunities for the market in the future. Moreover, demand for essential oils is increasing at an alarming rate, because now-a-days people are spending more on natural products, creating huge opportunities for essential oils market.
Furthermore, companies involved in the global essential oils are following effective strategies and launch of innovative products to grow in the market. For instance, Young Living Essential oils, the world's leading provider of essential oils, announced in April 2020, that they are going to launch new products in three different areas such as self-care, family, and home. Some of the self-care products are new essential oils blends, beautiful diffusers, and various Savvy Minerals makeup line. Such type of product innovations may further lead to lucrative market opportunities in the market in the upcoming years.
Global Essential Oils Market, Segmentation
The global essential oils market forecast is segmented based on type, application, and region.
The type segment is further classified into citrus, tea tree, eucalyptus, citronella, clove, lavender, and others sub-segments. Among these, the citrus type sub-segment is anticipated to have the fastest as well as dominant growth and surpass $4,907.12 million by 2028, with an increase from $2,219.59 million in 2020.
The market growth can be attributed to growing demand for citrus essential oil in various industries and its associated benefits. For example, diffusing essential oils in the room will freshen the environment, uplift the mood, reduce anxiety, and eliminate the airborne infections, leading to increase the usage of citrus essential oils and create a positive impact on the sub-segment throughout the forecast period.
The application segment is further divided into food & beverages, fragrances, cosmetics, & aromatherapy, household, and pharmaceuticals. The food & beverages sub-segment is expected to have a dominating share in the global market and register a revenue of $7,460.75 million during the analysis timeframe.
This growth is the result of rising preferences and awareness about the overall health of individuals, which have led to an increase in the number of people opting for healthy and natural products. Moreover, essential oils are used in flavoring of food and beverages, giving them great aroma in very less quantity. Thus, use of essential oils in food and beverages might boost the demand for essential oils.
The essential oils market insights for the Europe region is projected to witness largest share. This market generated a revenue of $4,419.37 million in 2020 and is further projected to reach up to $8,854.97 million by 2028.
The demand for essential oils is streaming in the European region especially because of the presence of organizations such as European Federation of Essential oils (EFEO), it promotes the production and sells of essential oils in different countries. Moreover, adoption of natural products is also one of the factors that might encourage people for opting essential oils in any form. Furthermore, increasing living standards of people along with rising incomes are some of the aspects that will increase the adoption of essential oils. All such factors are anticipated to boost the market in the European region.
Top 10 Major Key Players in the Global Essential Oils Market are -
- Cargill, Inc.
- Koninklijke DSM N.V.
- dôTERRA International LLC
- Givaudan SA
- Young Living Essential Oils
- The Lebermuth Company, Inc.
- Sensient Technologies Corporation
- Essential oils of New Zealand
Along with the company profiles of the key players in the market, the report includes the Porter’s five forces model that gives deep insights into the competitive environment of the market.
Porter’s Five Forces Analysis for the Global Essential Oils Market
- Bargaining Power of Suppliers: The suppliers involved in the market are extensive in number and are globalized. Moreover, unpredictable demands in supplier pricing may impact company profitability.
Thus, the bargaining power of the suppliers is low.
- Bargaining Power of Buyers: Buyers have high bargaining power, primarily because of the huge number of essential oils that are offered at low prices. The buyers can hence choose the essential oils that best fits their preferences.
Hence, the bargaining power of buyers is high.
- Threat of New Entrants: Startups entering this market are providing different essential oils to the customers. However, companies that are in the essential oils are much more globalized.
Thus, the threat of the new entrants is moderate.
- Threat of Substitutes: There are different types of essential oils available for treating various conditions, so there is no demand for substitutes.
Therefore, the threat of substitutes is low.
- Competitive Rivalry in the Market: The ventures operating in the global essential oils are opting for various businesses deployment strategies to hold their position in the market. Several companies are launching their value-added services in the international market and strengthening the footprint worldwide.
Therefore, competitive rivalry in the market is high.