Taking Your First Steps Into The Essential Oils Market

The essential oils market had a global market size of over $6 billion in 2016. The essential oil production is estimated to grow at 9%. The main driving factors of the market will be some vital essential oils such as clove oil, orange oil, mint oil, and patchouli oil.

These oils have a high demand due to which the growth of the essential oil industry will increase further. A CAGR of 9% is expected for the global edible oil market according to the procurement intelligence experts Beroe. By 2022, the edible essential oil target market is expected to surpass $11.5 billion.

Orange essential oil is one of the best essential oils on the market in the segment as it has about 29% market share.

The orange essential oil production depends on the US because raw materials are sourced mainly from the US. Hence, the production cost of the orange essential oil depends on the supply.

Beroe’s intelligence report shows that there are three key producing countries; India, Indonesia, and Brazil. India is a producer of 80% of mint oil, Indonesia is a producer or 76%, and Brazil is a key producer of 58% of orange oil. These countries export to other countries too.

The report states that 40% of the market share is of the Asia Pacific and Europe. While there are many trends in the essential oils market, some of them include steam distillation and supercritical CO2 extraction.

The food and beverage application segment of the essential oil industry has generated the most revenue in the past. This is because of the therapeutic properties, biological activities, and other properties of essential oils.

Beroe’s analysis has pointed to a CAGR of 7% in the future while the demand growth is expected to grow up to 4%. The food and fragrance market is expected to see a CAGR of 7% until 2022 while the essential oil consumption continues to increase in the future.

The personal care segment application accounts for less than 10%. It is the pharmaceutical industry and FBT industry that have contributed to the growth of the market in the area.

The essential oils market has numerous market drivers. One of the most notable is increasing awareness about the benefits of essential oils. People are now aware of the medicinal and relaxing properties of essential oils which have resulted in a spike in the demand for essential oils.

For example, according to Beroe, consumer awareness about lemon essential oil will have a CAGR of up to 13%. As retail companies show their interest in the essential oil market, the demand is further increasing. Moreover, government policies are supportive due to the environmental benefits and this has boosted the demand even more.

Since essential oil benefits are many, there is more research being done in the area of how essential oils can be of value. For example, the side-effects of antibiotics in poultry and the overuse of them is a cause of concern for many.

This is the reason why essential oils are being further studied to see if they can be used as an alternative to antibiotics. Cargill is studying and researching how oregano essential oil, thyme essential oil, and cinnamon essential oil can be of benefit and whether it can be used as an additive to the feed.

If research is successful and the results are positive then this can further drive the essential oils market in a positive direction.

While the benefits of the essential oils market might seem quite favorable, it is important to note that there are many constraints. The essential oil production depends on the weather since seasons and weather fluctuations can make a big difference.

When the supply is unable to meet demand it can signal higher prices. The quality issue is another constraint of the market, especially in developing countries. Since there is not enough capital to give a boost to the production process, this can lead to loss of crop yields.

A low supply of raw materials and labor costs are other major constraints along with increasing production costs.The essential oils market is a highly fragmented one. However, there is expected to be the integration of the key market players in the future.

That is, sourcing of the raw materials and distribution can lead to higher competition in the essential oils market. Another important factor is that technological advances are likely to impact the essential oils industry. The profit margin will be different among the key players in the industry due to the difference in production capacities. Moreover, the market size will impact the profit margin too.


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