In 2023, the global essential oil market was valued at USD 11.41 billion. It is projected to grow at a compound annual growth rate (CAGR) of 10.55%, increasing from USD 12.47 billion in 2024 to USD 27.82 billion by 2032.

Essential oils, also known as aetheroleum oils, are non-water soluble liquids containing volatile fragrance compounds derived from plants. The market's growth is primarily driven by the strong trend of green consumerism and the increasing demand for natural products in food preservation and sensory applications. These oils, made up of complex and volatile chemical compounds, are known for their ability to fight infections, inflammation, fungi, and viruses—without the significant side effects often associated with prescription medications.

As a result, essential oils are increasingly replacing chemicals, drugs, and pharmaceuticals due to their health benefits and reduced risk of adverse reactions. Additionally, the pleasant aromas of essential oils are often used in conventional medicines and pharmaceuticals, particularly to mask unwanted odors in certain substances.

These factors are expected to drive the market’s expansion, as highlighted in a report titled "Essential Oils Market, 2024-2032" by Fortune Business Insights™.

Information Source: https://www.fortunebusinessinsights.com/industry-reports/essential-oils-market-101063 

Segments

Citrus to Dominate Market Owing to Increasing Popularity among Consumers

The essential oils market is segmented by type into eucalyptus, rosemary, citrus, lavender, tea tree, peppermint, and others. Among these, the citrus segment holds the largest market share, primarily due to its superior functional properties, wide availability, and favorable organoleptic characteristics. Additionally, strong demand dynamics for citrus essential oils further contribute to its dominance in the market.

Food & Beverages Segment to Hold the Market Share Owing to Increasing Demand for Oils

The market is segmented by application into spa & relaxation, food & beverages, personal care & cosmetics, pharmaceuticals & medicinal formulations, and others. Among these, the food & beverages segment is expected to hold the largest share during the forecast period. This growth is driven by the increasing use of essential oils in food products to enhance sensory qualities, extend shelf life, and improve the storage stability of various edibles.

Growing Awareness about the Product to Drive the Direct Distribution Channel Sales

The market is categorized by distribution channel into direct distribution, MLM (multi-level marketing) distribution, and retail distribution. The direct distribution segment commands the largest market share, fueled by increasing consumer demand for firsthand experiences of essential oil fragrances. This trend is anticipated to further propel market growth in this segment.

Report Coverage-

The report offers:

• Major growth drivers, restraining factors, opportunities, and potential challenges for the market.
• Comprehensive insights into regional developments.
• List of major industry players.
• Key strategies adopted by the market players.
• Latest industry developments such as product launches, partnerships, mergers, and acquisitions.

Drivers & Restraints-

Growing Demand and Need for Natural Ingredients to Foster Market Growth

Plant-based volatile oils are essential for the natural preservation of food, particularly in light of rising concerns about synthetic food additives and their potential long-term harmful effects. Essential oils have shown antibacterial properties in a variety of foods, including milk, fish, meat products, fresh meat, dairy items, and cooked rice.

These oils are highly concentrated; for example, producing one pound of lavender oil requires approximately 250 pounds of lavender flowers. This growing demand, combined with limited supply, is expected to drive up prices, which could restrict their use across various application sectors in developing economies.

Regional Insights-

Europe to Dominate the Market Share Owing to Plant-based Volatile Oils

In 2022, Europe is anticipated to dominate the market share, primarily driven by cosmetic manufacturers who are increasingly integrating essential oils into their formulations. The growing popularity and demand for aromatherapy in countries such as the U.K., Germany, and France are also expected to significantly contribute to the growth of the essential oils market.

North America is projected to hold the second-largest market share, with a notable increase in demand for essential oils in the region expected throughout the forecast period.

Competitive Landscape-

Industry Association a Priority for Prominent Companies in the Market

The global essential oils market remains highly fragmented, primarily due to the significant presence of local and private-label brands across different regions. Major companies such as International Flavors and Fragrances Inc., Givaudan International SA, and Symrise AG are actively engaging in mergers and acquisitions to solidify their market positions and increase their influence within the industry.

List of Key Players Present in the Report:

• Biolandes SAS (France)
• Givaudan International SA (Switzerland)
• International Flavours and Fragrances Inc. (U.S.)
• Symrise AG (Germany)
• Enio Bonchev Production Ltd. (Bulgaria)
• The Lebermuth Company, Inc. (U.S.)
• Essential Oils of New Zealand (New Zealand)
• Phoenix Aromas & Essential Oils LLC (U.S.)
• Sydney Essential Oil Co. (Australia)
• Young Living Essential Oils (U.S.)