Essential oil are gaining demand as a result of their expanding usage across different applications wherever essence of a specific oil is required, such as food and beverages, pharmaceuticals, and personal care and cosmetic products. Essential oil contain striking characteristic of the plants that they are extracted from. These alternatives are considered healthier than fatty oils, as they can completely evaporate and do not leave any strain or residue when pressed against filter paper. Rose oil, lavender oil, eucalyptus oil, garlic oil, and balsam of Peru are some of the common raw materials for the manufacturing of essential oil.
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According to a recent business intelligence study by Transparency Market Research (TMR), the demand in the global essential oils market will increment at an impressive CAGR of 9.6% during the forecast period of 2017 to 2022. Revenue-wise, the market is estimated to attain a valuation of US$27.49 billion by 2022.
Here’s a look at how different factors are impacting the global essential oil market:
Trend of aromatherapy: Urban populations are observing a restless lifestyle while they earn greater chunk of disposable income. As a result, measures that fetch them a few hours of relaxation goes a long way towards overcoming stress and rejuvenates them. As a result, aromatherapy clinics are mushrooming across urban parts of the world and driving the demand for essential oils that are of ideal fragrance. Additionally, essential oils have proven their worth in curing chronic diseases such as arthritis and skin allergies.
Growing demand for cosmetic and personal care products: Particularly in the developing Asia Pacific countries of India, China, and Thailand, the demand for personal care products is on the rise. These products are manufactured by the inclusion of essential oils as more suited for application on skin than other alternatives.
Radical progress of food and beverage industry: Urban populations are now eating out much more than ever before as well as consuming ready to eat food products and liquid refreshments. Consequently, the players of the food and beverage industry are innovating their products by the inclusion of this costly but beneficial oil, and marketing their niche products to gain ground over competitors. In the near future, this application segment of the essential oil market is expected to perform really well, according to the analyst of the TMR report.
A number of research and development activities are currently underway that promise to expand the application horizon of essential oils. Moreover, rising demand for natural ingredients and economic prosperity of BRICS nations is expected to open new opportunities in the essential oils market. On the other hand, depleting natural resources, side effects of these oils on certain skin and metabolism, and prevalence of synthetic or adulterated products are obstructing the market from attaining greater profitability.
As far as the competitive landscape is concerned, the TMR report has highlighted a highly consolidated scenario, with the entry barriers quite high for the new entrants. Some of the leading players of this market are DoTERRA International LLC, Symrise AG, Young Living Essential Oils, Enio Bonchev Production Ltd., Givaudan SA, Citrus and Allied Essences Ltd., International Flavors & Fragrances Inc., and China Flavors and Fragrances Co. Ltd.