Botanical Extracts Market Growth by Type, Application and Geography - Forecast and Analysis 2023-2027

Botanical Extracts Market Forecast 2023-2027

The botanical extracts market size is forecast to increase by USD 2.75 billion, at a CAGR of 8.78% between 2022 and 2027. Market expansion hinges on various factors; notably the escalating prevalence of chronic ailments, driving demand for alternative medicinal sources beyond conventional drugs. Additionally, heightened awareness regarding the advantages of natural cosmetics fosters market growth as consumers prioritize organic and sustainable options. Moreover, the surge in demand for clean-label products underscores a shift towards transparent and health-conscious consumer choices. These converging trends reflect evolving consumer preferences towards holistic health and wellness solutions, positioning the market for sustained growth in response to evolving health and beauty needs. Furthermore, the market forecasting report includes historic market data from 2017 to 2021.

What will be the Size of the Market During the Forecast Period?

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Market Segmentation

The market is flourishing with innovations like Fytosan by Synergy Flavors and novel extraction techniques. The growing interest in alternative medicine drives demand for dietary supplements targeting deficiency diseases such as anaemia, scurvy, and rickets. Despite challenges like supply chain disruptions and raw material prices, the market thrives, catering to rising demands for convenience food, functional food products, and immunity-boosting herbal dietary supplements. Further, the growth prospects for herbal products extend beyond traditional medicine to various applications in the food industry, particularly in convenience food products like ready meals and packaged snacks, where they contribute to blood sugar regulation and offer healthier alternatives.

Furthermore, the botanical extracts market report extensively covers market segmentation by application (F and B, nutraceuticals, and cosmetics), type (powder and liquid), and geography (North America, Europe, APAC, South America, and Middle East and Africa).

By Application

The market share growth by the F and B segment will be significant during the forecast period. Botanical extracts are used in the F and B industries to impart functional benefits to a wide variety of foods and beverages, including alcoholic and non-alcoholic beverages, dairy and meat products, baked goods, and confectionery. The high demand for fresh, minimally processed, clean, transparent, high-quality products has led F and B companies to use plant extracts as key ingredients in their products. These extracts are used for their health benefits such as anti-inflammatory, antioxidant, and antimicrobial properties.

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The F and B segment was valued at USD 1.95 billion in 2017. Botanical extracts have a variety of health benefits, including energizing, strengthening the immune system, improving skin health, and inducing relaxation. However, it is also used to improve the taste of beverages. Companies use plant extracts as natural sweeteners. Demand for natural, healthy and organic products is a key factor driving the market during the forecast period as consumers are aware of clean labels and natural products. 

By Region

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North America is estimated to contribute 35% to the growth of the market during the forecast period. Technavio’s analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period. The North American market has grown due to the increasing impact of urbanization and the increasing preference for natural products. Concerns about a healthy lifestyle, the established F and B industries in North America, and the presence of major domestic players in the market, such as BI Nutraceuticals, DowDuPont, International Flavors and Fragrance, Prinova Group, etc., are other drivers of this market. The United States, Canada, and Mexico are the largest contributors to the market.

Market Dynamics and Customer Landscape

The market is witnessing remarkable growth driven by novel extraction techniques like Fytosan. With consumers increasingly inclined towards alternative medicine and convenience food, demand for dietary supplements and functional food products is soaring. These extracts, rich in nutrients and antioxidants, offer solutions for deficiency diseases such as anaemia, scurvy, and rickets. However, supply chain disruptions and fluctuations in raw material prices pose challenges for manufacturers. Nevertheless, the market continues to expand, with cosmetic stores and food applications embracing immunity-boosting herbal dietary supplements and functional beverages for weight loss and blood sugar regulation. Our researchers analyzed the data with 2022 as the base year, along with the key drivers, trends, and challenges. A holistic analysis of drivers will help companies refine their marketing strategies to gain a competitive advantage.

Key Market Driver

The incidences of chronic diseases and increasing demand for non-traditional drug sources are notably driving market growth. The prevalence of chronic diseases such as cancer, cardiovascular disease (CVD), diabetes, and autoimmune diseases is increasing due to increased environmental pollution and sedentary lifestyles, leading to rising annual mortality rates. The increasing incidence of chronic diseases has increased the need for new treatments. The CDC estimated that about 1.5 million new cancer cases are diagnosed, and about 500,000 people die from the disease each year.

Furthermore, medicines from plant extracts are also called photo drugs. These products contain one or more herbal substances as active ingredients, as compared to synthetic drugs containing chemically active substances. They consist of abundant natural products that activate or modulate target systems in organisms. Therefore, the potential for chronic diseases will increase the demand for new treatments from non-chemical sources, contributing to the market growth during the forecast period.  

Significant Market Trends

The growing applications in the beverage industry are a key trend influencing market growth. The demand for plant extracts in the F and B industries is driven primarily by health and well-being awareness, a trend toward natural products, and recognition in developing countries of the benefits of plants as food ingredients. The global market for brewing enzymes is witnessing an increase in production capacity. The market for brewing enzymes in China and India is developing rapidly with a continuous increase in production capacity. The supply and consumption of brewing enzymes are expected to increase over the next decade.

Further, the growing demand for new beer flavors is also driving the use of plant extracts as functional beer additives. Botanical extracts are used in soft drinks of lavender and chamomile, rosehip, and lemon verbena,  known for their relaxing properties. This product contains L-Theanine, an amino acid that aids in relaxation, along with chamomile, passion flower, Rhodiola, and lemon balm. Botanical extracts are widely found in green tea and their derivatives. This is because green tea extract is a great source of antioxidants and other health benefits. It is expected to drive the global botanical extract market during the period. 

Major Market Challenge

The high price of products is challenging market growth. The botanical extract market is characterized by the presence of a significant number of players. Only big companies such as BASF, Kerry, and DowDuPont can afford to use technology and sophistication to maintain the highest quality. These large companies secure discoveries by supporting research and development efforts and patenting their products. This will increase the cost of plant extracts for the F and B industries, thereby increasing the price of the product. In regions with high disposable income, this will not have a significant impact on the market.

However, it impacts consumer behavior in developing countries where disposable income is low and cost-sensitive. As a result, consumers in developing regions often avoid using plant extracts. Instead, they use medium to low-quality products or substitute alternatives such as synthetic ingredients. Therefore, fluctuations in the prices of herbs and spices are likely to impede the growth of the focus market during the forecast period.

Market Customer Landscape

The report includes the adoption lifecycle of the market, covering from the innovator’s stage to the laggard’s stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their growth strategies.

 Market Customer Landscape

Who are the Market Players?

Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.

• Arjuna Natural Pvt Ltd: The company offers different health and nutrition products such as curcumin, fish oil, sesame seed extract, ashwagandha extract, Brahmi extract, and others. Along with this, it also offers natural food protection solutions.

The report also includes detailed analyses of the competitive landscape of the market and information about 16 market companies, including:

• All Season Herbs Pvt. Ltd.
• Bell Flavors and Fragrances GmbH
• BI Nutraceuticals
• Bio Botanica Inc.
• Botanical Extracts EPZ Ltd.
• Carrubba Inc.
• Dohler GmbH
• Grupo Natac S.L.U.
• Indesso
• International Flavors and Fragrances Inc.
• Jairamdass Khushiram
• Kalsec Inc.
• Kerry Group Plc
• MB Holding GmbH and Co. KG
• NEXIRA.

Qualitative and quantitative analysis of companies has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize companies as dominant, leading, strong, tentative, and weak.

Segment Overview

The market report forecasts market growth by revenue at global, regional & country levels and provides an analysis of the latest trends and growth opportunities from 2017 to 2027. 

• Application Outlook
  • F and B
  • Nutraceuticals
  • Cosmetics

• Type Outlook 
  • Powder
  • Liquid

• Region Outlook
  • North America
    • The U.S.
    • Canada
  • Europe
    • U.K.
    • Germany
    • France
    • Rest of Europe
  • APAC
    • China
    • India
  • South America
    • Chile
    • Brazil
    • Argentina
  • Middle East & Africa
    • Saudi Arabia
    • South Africa
    • Rest of the Middle East & Africa

Market Analyst Overview

The market is flourishing due to changing lifestyle trends and increasing demand for natural organic products in cosmetics and skincare, nutraceuticals industry, and food and beverages industry. With a focus on bioactive phytochemical concentration, consumers seek herbs & spices, fruits, and vegetables for their nutritional properties. Advanced extraction methods ensure the preservation of botanical ingredients such as aloe vera, ginseng roots, bitter orange, and turmeric, valued for their antiseptic and nutritional benefits. The cosmetics industry embraces botanical medicine in face creams and lotions, while the food and beverage sector utilizes botanical extracts for flavoring, found in sauces & dressings, tea leaves, and ready-to-drink (RTD) beverages. As e-commerce retail and online retail networks expand, access to organic and herbal health and beauty products becomes more accessible to working women seeking cosmetics and personal care products.

Additionally, the market sees significant integration into various sectors like bakery & confectionery, skincare products, and sports & energy beverages as consumers prioritize flavor, nutritional benefits, and functional properties. With a focus on dietary habits and health consciousness, demand for botanical extracts rich in vitamins, minerals, and protein & amino acids rises. Extraction processes ensure the preservation of nutrients in raw materials like flowers, fruits, and vegetables, catering to demand and supply in the food and other applications sector. As disposable incomes increase, consumers seek oral care products and skincare products containing botanical extracts, while the pharmaceutical industry explores their potential in packaged food products and processed food for their health-promoting qualities. In the realm of organized retail, brick & mortar stores offer a wide range of botanical extract-based products to meet the economic outlook of discerning consumers.

Market Scope
Report Coverage	Details
Page number	161
Base year	2022
Historic period	2017-2021
Forecast period	2023-2027
Growth momentum & CAGR	Accelerate at a CAGR of 8.78%
Market growth 2023-2027	USD 2.75 billion
Market structure	Fragmented
YoY growth 2022-2023(%)	7.87
Regional analysis	North America, Europe, APAC, South America, and Middle East and Africa
Performing market contribution	North America at 35%
Key countries	US, Canada, China, France, and Germany
Competitive landscape	Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks
Key companies profiled	All Season Herbs Pvt. Ltd., Arjuna Natural Pvt Ltd., Bell Flavors and Fragrances GmbH, BI Nutraceuticals, Bio Botanica Inc., Botanical Extracts EPZ Ltd., Carrubba Inc., Dohler GmbH, Grupo Natac S.L.U., Indesso, International Flavors and Fragrances Inc., Jairamdass Khushiram, Kalsec Inc., Kerry Group Plc, MB Holding GmbH and Co. KG, NEXIRA, Prinova Group LLC, Ransom Naturals Ltd., Synergy Flavors Inc., and Synthite Industries Ltd.
Market dynamics	Parent market analysis, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, Market condition analysis for the forecast period.
Customization purview	If our report has not included the data that you are looking for, you can reach out to our analysts and get segments customized.

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What are the Key Data Covered in this Market Research Report?

• CAGR of the market during the forecast period
• Detailed information on factors that will drive the market growth and forecasting of the market between 2023 and 2027
• Precise estimation of the market size and its contribution to the parent market
• Accurate predictions about upcoming market trends and analysis and changes in consumer behavior
• Growth of the market across Europe, North America, APAC, South America, and Middle East and Africa
• Thorough market growth analysis of the market’s competitive landscape and detailed information about companies
• Comprehensive market analysis and report on the factors that will challenge the market research and growth of market companies

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