Essential Oils Market Will Hit Big Revenues In Near Future
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.
Essential oil demand experiences a major upturn due to demand from new applications, especially as a non-pharmaceutical alternative to traditional sleeping aids. Clinical trials have established the role of essential oils in relieving stress and alleviating anxiety.
The market is growing due to its wide application and increased awareness among consumers globally. Essential oils are being used in new domains as they have various health benefits and less known side effects. The North American region dominates the global essential market, owing to the growing trends of having a healthy lifestyle and consumers being more aware of the ingredients being used in their products. Furthermore, growing applications of essential oils have increased the R&D and new product innovations which are expected to drive the global market in the forecasted period.
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 mostly for their color, flavor, and fragrance in the end products; commonly used essential oils used by food and beverage manufacturers include orange oil, lemon oil, cardamom essential oil, peppermint oil, and lime oil. Lemon’s essential oil is widely used in the food and beverage industry as a flavoring agent, such as in 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 are promoting 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.
Most consumers in developed countries have been looking for food products, without any inclusion of artificial additives, due to the associated long-term adverse health effects. Manufacturers are inclined toward the usage of natural flavoring agents, preservatives, and sweeteners as they are the key ingredients used to make the food tasty and to extend the shelf-life of the product. The European demand for essential oils is strong. Increasing competition for these natural ingredients from emerging markets and pressure on raw material production spur European importers to search for new sources. With the growing awareness of health products, consumers are increasingly looking for less processed and more natural foods & beverages. This is being reflected in the clean label movement spreading across the packaged food industry across the globe.
key players in this market include 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).
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