According to MarketsandMarkets, the global essential oils market size is estimated to be valued at USD 8.8 billion in 2022 and is projected to reach USD 15.3 billion by 2027, recording a CAGR of 11.8% in terms of value.
The food and beverages industry continues to incorporate essential oils into multiple products, in line with the upward trend of “clean label.”
Essential oils are identified for their health benefits, as they are natural ingredients that impart the essence of the source they have been derived from. The largest market segment for essential oils is food and beverage, as consumers are becoming increasingly aware of the health benefits of essential oils. The food and beverage industries use essential oils primarily for their color, flavor, and fragrance in the end products.
Food and beverage manufacturers' most common essential oils include orange oil, lemon oil, cardamom essential oil, peppermint oil, and lime oil. Lemon essential oil is widely used in the food and beverage industry as a flavoring agent, such as fruit juices, jams, and bakery products. With citrus essential oils labeled as safe for consumption by regulatory authorities, the food and beverages industry continues to incorporate these essential oils into multiple products, in line with the upward trend of “clean label.” Clean labels and positive nutrition are gaining traction among consumers, especially the Millennials and Gen Z. Stringent food standards and consumer awareness regarding the health issues associated with artificial food additives promote the consumption of natural ingredients such as essential oils. Food and beverage brands are incorporating the clean label trend in new product developments, and therefore the trend is strongly driven by supply-side initiatives.
Essential oils represent a significant upstream business opportunity for the floriculture market
Floriculture has been associated with the cultivation of exotic and aromatic flowers yielding aromatic essential oils, including rose, jasmine, lavender, and tuberose. Flowers have been known for a long time to be a source of sweet fragrance and provide one of the most important essential oils indispensable in perfumery production. Hence essential oils represent a significant upstream business opportunity for the floriculture market. The rising hospitality sector is another prominent avenue for the flower-sourced essential oils business.
Essential oils from flowers, when incorporated into finished products, impart various benefits such as pleasant aroma in perfumery, shine or conditioning effects in hair care products, and improved skin elasticity. Raw material procurement is a crucial step. For optimal essential oil production, it is necessary to identify the perfect location for cultivating flowering crops based on suitable climatic and soil conditions with minimal use of pesticides and fertilizers to obtain a good yield. It is also essential to carefully monitor the transit of raw materials from field to factory to preserve the freshness and potency of active ingredients. Therefore, traceability and transparency in the supply chain are gaining significance. Besides, manufacturers seek a sustainable approach, and hence, increased emphasis is given to procurement.
The European essential oil market growth is attributed to the consumer demand for aromatherapy cosmetics
The European demand for essential oils is because of the rising aromatherapy sector. European buyers prefer value-added food products, and manufacturers prefer to use essential oils in this domain due to their wide range of applications. The consumers’ growing demand for high-quality, environmentally friendly products is expected to drive the European market. Apart from this, the region is one of the major importers of essential oil due to the increased consumer demand for aromatherapy products by developing “aromatherapy cosmetics.” The European cosmetics and personal care market is one of the largest in the world and presents an attractive opportunity for suppliers and producers of essential oils from developing countries. The consumer demand for cosmetics products that do not contain chemicals is expected to fuel market growth. Due to its regulatory environment, Europe remains an important market for companies that produce essential oils. Major companies of Europe leading in this market are Symrise (Germany), ROBERTET SA (France), MANE (France), and NHR Organic Oils (UK).
This report includes a study on the marketing and development strategies, along with the product portfolios of leading companies. It consists of profiles of leading companies, such as Cargill, Incorporated (US), DSM (Netherlands), Givaudan (Switzerland), International Flavors & Fragrances Inc. (US), Sensient Technologies Corporation (US), Symrise (Germany), Robertet SA (France), MANE (France), doTERRA (US), NOW Foods (US), Lebermuth, Inc. (US), BIOLANDES (France), Norex Flavours Private Limited (India) and India Essential Oils (India).