Essential Oils Market - Global Industry Analysis, Size, Share, Growth, Trends, and Forecast 2031 - By Product, Technology, Grade, Application, End-user, Region: (North America, Europe, Asia Pacific, Latin America and Middle East and Africa)

The worldwide consumption of essential oils is on the rise, and the global market, valued at $21.53 billion in 2024, is forecasted to grow significantly, reaching $36.94 billion by 2031, with a CAGR of 8.00%. This growth is driven by several key factors, including the adoption of multi-level marketing strategies, the increasing demand from the pharmaceutical industry, intensive research and development, and support from independent organizations. However, the market also faces challenges such as high prices and consumer demand for natural and true-label products.

Factors Driving Essential Oils Market Growth

Multi-level Marketing to Benefit Key Manufacturers of Essential Oils

Many leading essential oil producers have embraced multi-level marketing techniques to reach more customers and expand their businesses. The growing awareness of the health benefits of essential oils has resulted in increased retail sales, particularly through convenience stores. In addition to traditional over-the-counter sales, key market players are offering products directly to customers through online retail channels such as e-commerce platforms. This has made it easier for customers to access products. Manufacturers have also enabled wholesalers to order products in bulk via their websites. This adoption of multi-level marketing strategies allows manufacturers to make their products available to customers more efficiently.

For instance, DoTerra recently achieved the 5 million global customer mark, owing to widespread awareness and easy access to its products.

Pharmaceutical Industry to Drive Substantial Demand for Essential Oils

Plant-based oils contain compounds called phenols, terpenes, and terpenoids, which are utilized for medical standards and health assistance. These compounds are essential ingredients in pharmaceutical agents and therapeutic drugs. The biological activities of these compounds are used to treat various diseases. Carvacrol compounds present in essential oils can lower cholesterol levels, improve gut symptoms, aid in weight loss, and are popular as pain-reducing agents with cancer-fighting properties.

Essential oils are widely used in capsules and tablets available from health food stores. Their functional properties make them vital ingredients in the pharma industry for producing capsules and tablets. For instance, Zane Hellas offers essential oils in the form of capsules that dissolve at the exact area of the body before dissolving, allowing for better absorption.

Intensive R&D to Provide Lucrative Growth Opportunities to Essential Oil Producers

Key players in the essential oils market are investing heavily in research and development. Manufacturers are working to improve the functionality of essential oils in various applications such as food, cosmetics, pharmaceuticals, and animal nutritional products. Many companies are focusing on introducing new essential oil blends to keep up with rising consumer preferences. This factor drives the sales of essential oils due to the various benefits provided, creating long-term opportunities for global manufacturers. In 2018, DoTerra International collaborated with the Research Institute for Fragrance Material to expand its essential oil offerings.

Independent Organizations Supporting Processing of Essential Oils

The global essential oils market is supported by various organizations promoting the use of organic and natural ingredients or products in day-to-day applications. These organic essential oils are certified with various standards to promote their trade globally. High-quality standards are marked by specific guidelines and regulations for the production, harvesting, and processing of herbs and aromatic crops by international organizations, including the European Union and the United Nations. Post-harvesting processing operations for herbs, spices, and essential oils are monitored by entities such as the Food and Agriculture Organization of the United Nations and The United Nations Industrial Development Organization. The support offered by these organizations creates various opportunities for key essential oil product manufacturers in the market.

Challenges in the Essential Oils Market

High Price of Essential Oils Can Hurt Market Expansion

The high price of essential oils can make it difficult for market players to manage their final product pricing and profit margins simultaneously. Fluctuating prices of essential oils can cause rapid changes in market growth. Due to the high pricing, consumers may turn to substitutes such as low-cost or synthetic oils, leading to fluctuating demand for essential oils.

Rising Demand for Natural & True-label Products

Growing consumer demand for natural products free from harmful chemicals increases the focus on the origin and cultivation methods of fruits used to extract oils. This concern is more significant in the case of fruits, as the peel, which is the primary source of oils, is exposed to pesticides or fertilizer sprays. The use of chemicals is not limited to on-farm cultivation; synthetic chemicals such as pesticides and fungicides are also sprayed on fruit shipments to extend shelf-life and prevent spoilage. This presents a significant disadvantage as many consumers prefer true-label products and are hesitant to use chemically-processed ingredients.

Key Market Players

• Young Living Essential Oils
• doTERRA
• Now Health Group, Inc.
• Givaudan SA
• Rocky Mountain Oils, LLC
• NHR Organic Oils
• Ultra International B.V.
• AOS Product Pvt. Ltd.
• Sensient Technologies Corporation
• BMV Fragrances Pvt Ltd
• International Flavors & Fragrances
• Lebermuth Inc.
• Ugerer and company
• Van Aroma
• Falcon Essential Oils
• Naturral & Essentials Oils Pvt Ltd
• Flavaroma
• Prinova Group LLC
• Sydney Essential Oil
• Kush Aroma Exports

Market Segmentation

Essential Oils Market by Type:

• Citrus
• Herbs & Spices
• Mints
• Flowers
• Nuts
• Others

Essential Oils Market by Nature:

• Organic Essential Oils
• Conventional Essential Oils

Essential Oils Market by End Use:

• Food & Beverage Industry
• Cosmetics & Personal Care
• Home Care & Toiletries
• Aromatherapy
• Animal Feed
• Foodservice Industry
• Retail/Households

Essential Oils Market by Distribution Channel:

• Business to Business
• Business to Consumer
• Hypermarkets/Supermarkets
• Specialty Stores
• Online Retail
• Other Retail Sectors

Essential Oils Market by Region:

• North America Essential Oils Market
• Latin America Essential Oils Market
• Europe Essential Oils Market
• South Asia Essential Oils Market
• East Asia Essential Oils Market
• Oceania Essential Oils Market
• Middle East & Africa Essential Oils Market

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