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The essential oil market size is projected to increase by USD 10.30 billion at a CAGR of 11.43% between 2023 and 2028
Europe is witnessing heightened demand for essential oils, propelled by their various health benefits and versatile applications across industries such as pharmaceuticals, cosmetics, and food and beverages. Germany, the UK, France, and Spain stand out as prominent markets for essential oils. Leading food and beverage as well as cosmetics producers are incorporating essential oils into new products, reflecting the growing market. Additionally, the popularity of aromatherapy, notably in countries like France, Germany, the UK, Austria, and Switzerland, further fuels the demand. With local production unable to meet the rising requirements, Europe imports essential oils from APAC, primarily for flavor and fragrance production, adhering to stringent regulatory standards and quality checks. Avi Naturals contributes to this market with offerings such as Ambrette essential oil, Amyris essential oil, Anethi essential oil, Basil essential oil, and Bay rum essential oil. This trend is expected to continue, fostering the growth of the essential oils market in Europe during the forecast period.
The market shows an accelerated CAGR during the forecast period.
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Expanding applications of essential oil across various industries is an emerging trend shaping the market growth. Applications of essential oils are increasing in aromatherapy as well as health care and food and beverages industries, which, in turn, is driving the growth of the market. Essential oils have found widescale application as key ingredients in the preparation of different foods and beverages. In addition, vitamin C, present in basil essential oil, boosts skin metabolism and helps maintain skin collagen, which is responsible for the dermis layer and its elasticity. Essential oils are increasingly being used in the creation of specialized blends and formulations for spices and seasonings, offering unique aromatic profiles and enhancing the overall sensory experience in various applications. Therefore, basil essential oil is used in skin creams. It is also used in the production of dental creams and mouthwashes.
Also, essential oils are used in perfumes and insect repellants because of their antimicrobial and insecticidal properties. Various essential oils such as hinoki essential oil, geranium essential oil, coriander essential oil, and lavender essential oil are used in massage therapies. Essential oils are also extensively used in the preparation of perfumes and various scented beauty products. The wide-scale application of essential oils across various industries will drive the growth of the market during the forecast period.
Clean labeling of essential oils is an emerging trend shaping market growth. The demand for clean labeled products is increasing among consumers, which is compelling vendors to ensure that the products include only those ingredients that consumers recognize as natural and wholesome. Clean-labeled essential oils are gaining high popularity. To increase the sales of essential oils, vendors are ensuring that their products comply with clean labeling. In addition to providing information about the composition and quality of the essential oils, clean labeling also emphasizes sustainable and ethical sourcing practices.
However, this includes ensuring that the production of essential oils does not harm the environment, respects labor rights, and maintains the biodiversity of the area where the plants are grown. As awareness around health, wellness, and environmental impact grows, the demand for clearly labeled, high-quality essential oils is likely to continue to rise. Therefore, these factors will positively impact the growth of the market during the forecast period.
The increasing availability of counterfeit products of essential oil is a significant challenge hindering market growth. The easy availability of counterfeit products challenges market growth. Essential oils are extracted from plants through the distillation process and exhibit the characteristic fragrances and properties of the plants they are extracted from. However, counterfeit products contain cheap seed oils and do not have any properties of essential oils. Some counterfeit products are mixed with synthetics to make them resemble the scent of the plant. One of the most common adulterated essential oils is lavender essential oil.
Moreover, lavandin oil is sold as lavender oil. Lavandin oil is chemically different from lavender oil and is commonly used in perfumery. Such counterfeit products will damage the brand image of leading essential oil brands. Thus, the increasing prevalence of counterfeit products will hamper the growth of the market during the forecast period.
Online retailing offers tremendous opportunities to vendors operating in the market. Unlike traditional retail stores, such as supermarkets, hypermarkets, and discount stores, online essential oils retailers offer additional discounts and easy delivery options. Online distribution channels offer benefits such as convenient payment methods. Consumers shopping at online retail stores need not stand in billing lines, unlike traditional stores. Also, online distribution channels help vendors avoid huge investment costs in physical stores. The benefits offered by online stores may encourage more vendors to offer their products through online distribution channels, which, in turn, will drive the growth of the online segment in the market during the forecast period.
The market share growth by the food and beverages segment will be significant during the forecast period. Food and beverages segment is experiencing an increasing application of essential oils as consumers are becoming more health-conscious and demanding natural ingredients in food and beverages. Essential oils are used to add flavor and therapeutic benefits to food and beverages.
The food and beverages segment was the largest and was valued at USD 3.29 million in 2018
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Further, companies are coming up with food and beverage products containing essential oils. Essential oils such as garlic, thyme, rosemary, oregano, and basil are also effective in controlling bacterial growth in food products. Similarly, lavender essential oil and lime essential oil are known to control fungal infections in food. Hence, the quality of lipid-containing foods can be extended and preserved through storage and cooking by adding these essential oils that have strong antioxidant properties. However, the changing taste preferences of consumers can negatively influence the growth of the market during the forecast period. For instance, consumers, especially Millennials, prefer ethnic and spicy flavors. In line with this, the number of new product launches claiming spicy flavors is also increasing. These factors will positively impact the growth of the market in the food and beverages segment during the forecast period.
Europe is estimated to contribute 37% to the growth of the global market during the forecast period
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Technavio's analysts have provided extensive insight into the market forecasting, detailing the regional market trends and analysis, and drivers influencing the market's trajectory throughout the forecast period. Owing to the growing consumer awareness about natural home remedies, Europe is rapidly emerging as a key market for aromatherapy products. The rising inclination for aromatherapy and a healthier lifestyle among consumers may increase the demand for essential oils among cosmetics manufacturers and healthcare facilities in the region, which, in turn, will drive the growth of the regional market during the forecast period. Germany, the Netherlands, the UK, France, Spain, and Ireland are some of the leading importers of essential oils in the region. Overall, the market in Europe is expected to witness growth during the forecast period.
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 forecasting growth and analysis.
The market growth and forecasting report also includes detailed analyses of the competitive landscape of the market and information about 20 market companies, including Aliver Beauty, Avi Naturals, Biolandes SAS, BMV Fragrances Pvt. Ltd., doTERRA International LLC, Eden Botanicals, Elysce, Essential Oils Co, Falcon, Natural Sourcing LLC, NHR Organic Oils, Norex Flavours Pvt. Ltd., Organic Infusions, Phoenix Aromas and Essential Oils LLC, Plant Therapy Inc., Sydney Essential Oil Co. Pty Ltd., Takasago International Corp., The Lebermuth Co. Inc., Ultra International Ltd., VedaOils, Vidya Herbs Pvt. Ltd., Young Living Essential Oils LC, Enio Bonchev Production Ltd., and Essential Oils of New Zealand Ltd.
The market analysis and report of 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.
The market research and growth report forecasts market growth by revenue at global, regional & country levels and provides an analysis of the latest trends and growth opportunities from 2018 to 2028.
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Essential Oil Market Scope |
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Report Coverage |
Details |
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Page number |
164 |
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Base year |
2023 |
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Historic period |
2018-2022 |
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Forecast period |
2024-2028 |
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Growth momentum & CAGR |
Accelerate at a CAGR of 11.43% |
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Market Growth 2024-2028 |
USD 10.30 billion |
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Market structure |
Fragmented |
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YoY growth 2023-2024(%) |
10.16 |
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Regional analysis |
Europe, North America, APAC, South America, and Middle East and Africa |
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Performing market contribution |
Europe at 37% |
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Key countries |
US, Canada, Japan, Germany, and The Netherlands |
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Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
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Key companies profiled |
Aliver Beauty, Avi Naturals, Biolandes SAS, BMV Fragrances Pvt. Ltd., doTERRA International LLC, Eden Botanicals, Elysce, Essential Oils Co, Falcon, Natural Sourcing LLC, NHR Organic Oils, Norex Flavours Pvt. Ltd., Organic Infusions, Phoenix Aromas and Essential Oils LLC, Plant Therapy Inc., Sydney Essential Oil Co. Pty Ltd., Takasago International Corp., The Lebermuth Co. Inc., Ultra International Ltd., VedaOils, Vidya Herbs Pvt. Ltd., Young Living Essential Oils LC, Enio Bonchev Production Ltd., and Essential Oils of New Zealand Ltd. |
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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. |
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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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1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by Application
7 Market Segmentation by Distribution Channel
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Trends
11 Vendor Landscape
12 Vendor Analysis
13 Appendix
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