Essential oils are the volatile aromatic oils plant extracts, originating from flowers, seeds, stem, bark, leaves, and roots. These oils as they represent the flavor and aroma of the plant from which they are extracted. Essential oils are also known as ethereal oils, volatile oils or aetherolea, and are extracted through several processes such as distillation. These oils are used as aromatic and flavoring agents, as they contain several organic compounds such as terpenes, phenols, alcohols, aldehydes, ketones, lactones, coumarins, esters, and ethers. Therapeutic properties of essential oils depend upon the plant it is extracted from. For instance, citronella oil has antidepressant, antispasmodic, antiseptic, antibacterial, and anti-inflammatory properties, whereas lemon oil has antiviral, disinfectant, bactericidal, hemostatic, astringent, febrifuge, and antiseptic properties. Owing to such therapeutic and aromatic properties, the demand for essential oils is increasing. Increasing demand for natural products, in turn, is increasing the demand for essential oils in the food and beverages, cosmetics, personal care, and healthcare industries. Growing popularity of aromatherapy as well as increasing consumer awareness regarding the benefits of essential oils and related herbal products are major factors driving growth of the market for essential oils. However, low availability of raw materials is the major factor restraining growth of the essential oil market.
Essential Oil Market Taxonomy
On the basis of extraction technique, the global essential oil market is segmented into:
- Solvent Extraction
- Expressed Oils
- Carbon Dioxide Extraction
On the basis of product type, the global essential oil market is segmented into:
- Tea tree
- Corn Mint
- Clover Leaf
On the basis of application, the global essential oil market is segmented into:
- Food & Beverages
- Cosmetics and Personal Care
- Home Care
Among extraction techniques, distillation segment is the dominant technique, as it is the most inexpensive and easy method. Among application, aromatherapy is the largest segment, as it has potent antidepressant and soothing properties. Growing prevalence of depression due to hectic and stressful lifestyle and work environments, coupled with growing urbanization, is in turn, is increasing demand for aromatherapy. Thus increasing growth of the essential oil market.
The market in Asia Pacific is projected to witness significant growth, owing to increasing demand for natural oil-based products and growing disposable income among the populace. The growing in the food and beverages, and healthcare industries in China and India, as well as increasing inclination towards aromatherapy are fueling growth of the essential oil market in the region. According to India Brand Equity Foundation (IBEF)—trust established by the Department of Commerce, Ministry of Commerce and Industry—the fast moving consumer goods (FMCG) sector in India is expected to reach US$ 103.7 billion by 2020. FMCG sector in India consists of 19% food and beverages, 31% healthcare, and 50% household and personal care products. These sectors are major consumers of essential oils. Thus, the demand for essential oil is expected to increase in India, in turn, propelling growth of the essential oil market in Asia Pacific.
Europe holds a dominant position in the essential oil market, owing to increasing demand for natural beauty products and cosmetics, medicines, and nutraceuticals in the region.
Key Players in the Global Essential Oil market
Key players in the essential oil market are adopting inorganic approaches to retain their foothold in the global market. Some key players operating in the essential oil market are Biolandes, doTERRA International, Essential Oils of New Zealand, Farotti SRL, H.Reynaude & Fils, Moksha Lifestyle Products, Sydney Essential Oils Rocky Mountain Oils LLC, Co. Pty Ltd, The Lebermuth Company, West India Species, Inc., and Young Living Essential Oils.
Global Essential Oil Market Key Developments:
- On 9th November 2017, Lebermuth, Inc., a major player in the essential oil market in the U.S. stated that the price for Geranium Egyptian Oil (Pelargonium graveolens, CAS 8000-45-2) rose in September 2017 but later observed a fall in price by a few dollars per kg due to low demand. This fluctuating price of essential oil is expected to affect the company’s annual sales.
- On 23rd September 2019, doTERRA, a major player in the essential oils market announced about expanding its presence in Bogota, Colombia. This will include the company’s new corporate office which will be inaugurated in October 2019. This expansion is initiated so as to expand its product portfolio in the South American region.
- On 5th August 2019, doTERRA, a major player in the essential oils market announced its expansion in the Philippines. This expansion is expected to increase awareness about essential oils in the Asian market. The inauguration of this corporate office is to be held at the end of 2019.