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 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 widely used in cosmetics, perfumery, food and beverages, cleaning products, and home fragrances for their relaxing, stimulating, antiseptic, bactericidal, decongestant, soothing, antispasmodic, and anti-inflammatory properties. Besides being used for fragrances, essential oils like lemon and orange possess antiseptic properties, garnering attention as promising cosmetic-active ingredients. Essential oils are also used in skin care with anti-acne, anti-aging, skin lightening, and sun protection characteristics. Essential oils are also used in soaps, color cosmetics, and deodorants.
Companies within the ecosystem are focusing on further expanding the market for essential oils within cosmetics. Primavera Life, a producer of natural cosmetics and essential oils, uses a wide range of essential oils in its products, including lemongrass from Bhutan and Nepal, cajeput from Cambodia, and lemon verbena and myrtle from Peru. Higher-priced essential oils are usually used in the perfumery and personal care sector. According to the European Federation of Essential Oils (EFEO), fragrances, cosmetics, and aromatherapy generate about one-third of the demand for essential oils. There is an expected increase in demand from the cosmetics sector because many natural and conventional cosmetics companies use essential oils as fragrances. Some highly valued essential oils used as fragrances include eucalyptus, citrus, floral oils, tea tree, and lavender. Geraniol, citral, linalool, limonene, and citronellol are other notable fragrances popular among the masses.
Essential oils are highly versatile as a natural fragrance source in cosmetics and cosmeceuticals. The continued surge witnessed by the category is attributed to the fact that it has a wide range of natural unique, and pleasant fragrances, along with being a bioactive ingredient. Essential oils and botanicals have developed a heightened portfolio over the years, primarily because of the enormous demand for natural ingredients. Essential oils demand is still under scrutiny for constituting allergens and chronic toxicity risks for consumers, necessitating the monitoring of dosage and application. The International Fragrance Association (IFRA) offers guidelines on the safe use of essential oils in cosmetic products. The concentration of essential oils consumed can also enable safe usage. The important role of essential oils in the current development of the cosmetics industry toward greener and eco-sustainable products and the constant research over mitigating the allergen and safety issues associated with essential oils improve its business expansion. For example, in France, L’Oréal has a local partnership with SICA Bio-plantes, a group of farmers, for sustainable and responsible sourcing of some of the essential oils; for example, lavender essential oil or lemon winter savory.
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).
