As per the analysis report conducted by GMI Research, the essential oils market is estimated over USD 7400 million in 2019 and is anticipated to grow at a compound annual growth rate (CAGR) of 8.80% over the forecast period (2020-2027).

Essential oils are extracted from the different parts of plants such as seeds, roots, flowers, stems, leaves, fruits and other parts of the plant. It is obtained from various herbs such as lemon, corn mint, peppermint, orange, eucalyptus, among others. Essential oils are extensively used in a wide range of applications including food & beverage, home care, health care and others. The essential oil is extracted from various methods such as distillation, extraction with solvents and other extraction. In addition, the distillation is a procedure to separate liquid mixtures by means of boiling and condensation.

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The factors driving the global essential oils market include increasing disposable income among consumers, improved standard of living in developing economies and growing usage of essential oils in various applications especially food and beverages as well as cosmetic applications. The inclination of consumers towards natural and organic products will increase the demand for essential oils in the market. Furthermore, increasing the working women population due to the growing awareness regarding women health and hygiene will boost the global essential oils market. Increasing demand for the added flavors and fragrances and high adoption of natural products over chemical-based products by the consumers will further propel the global essential oils market. In addition, rising demand for aromatic personal care products will further enhance the growth of the global essential oils market in upcoming years. However, the high price of the essential oils, less availability of raw material and side effects related to certain essential oils are the certain factors that may hinder the global essential oils market.

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Based on the product type, orange oil type captured a significant market share in the global essential oils market in 2018 as it offers multiple health benefits such as firmness, scars, skin elasticity and other benefits to the skin. Moreover, orange oil helps to improve the quality of hair, skin and nails among consumers. Lavender oil is also growing during the forecast period owing to the growing demand in the food industry for flavoring tea, dairy products and other food products. Growing penetration of these oils in the development of cosmetic and personal care products will further drive the global essential oils market.

Based on the application, food & beverage predicted the highest market share in the global essential oils market in 2018 as essential oils are widely used in the food & beverage industry to maintain the flavor and freshness of the final product. In addition, increasing consumer awareness regarding health benefits will increase the usage of essential oils as an additive in food & beverage products. Essential oils are used in cosmetics, toiletries and other personal care products due to the growing health and hygiene among consumers will further enhance the market growth in upcoming years.

Based on the method of extraction, distillation method of extraction is widely used by the manufacturers in the global essential oils market. There are different types of distillation methods such as steam distillation, water distillation and water & steam distillation for the extraction of essential oils. In addition, wider application usage and quality control are the advantages of the distillation method in the global essential oils market. The solvent extraction comprises separation of the immiscible liquids like water and organic solvent.

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Based on the geography, Europe region dominated the market for the global essential oils in 2018 due to the presence of various industry players and the inclination of consumers towards natural ingredients-based products than synthetic based products. Asia-Pacific region is predicted to grow at the highest CAGR during the forecast period due to the increase in the availability of essential oils in this region. Factors such as rising disposable income, growing awareness regarding the functionalities and health benefits of essential oils will boost the essential oils market in this region.

Various notable players operating in the market, include Cargill, E. I. Du Pont De Nemours and Company, Koninklijke DSM N.V., Dōterra International LLC, Givaudan SA, Firmenich SA, Young Living Essential Oils, Sensient Technologies Corporation, The Lebermuth Company, Inc., International Flavors & Fragrances Inc., Symrise AG, among others. Prominent players are adopting various strategies such as expansion, collaborations, partnerships, product launches and acquisitions to enhance their existing product portfolio and strengthen their position in the global market.

Key Developments:

• In 2019, International Flavors & Fragrances Inc. collaborated with Neptune Wellness Solutions Inc. to co-develop hemp-derived cannabinoids products for the health & wellness market.
• In 2019, Cargill planned to invest approximately USD 225 million on refined oils facility in Sidney, Ohio and to carter the growing demand for refined and protein oils.

The global essential oils market has been segmented on the basis of product type, application, method of extraction and key geographies. Based on product type, the market is segmented into lemon oil, orange oil, lime oil, corn mint oil, peppermint oil,  citronella oil, spearmint oil, geranium oil, clove leaf oil, lavender oil and others. Based on application, the market is segmented into food & beverage, cosmetics & toiletries, aromatherapy, home care, health care and others. Based on method of extraction, the market is segmented into distillation, carbon dioxide extraction, cold press extraction, solvent extraction and others.

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