In 2023, the global essential oil market revenue was valued at USD 11.41 billion and is anticipated to grow at a compound annual growth rate (CAGR) of 10.55%, rising 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 extracted from plants. The market's growth is fueled by the strong trend toward green consumerism and increasing demand for natural alternatives in food preservation and sensory applications. These oils, composed of complex and volatile compounds, are recognized for their effectiveness against infections, inflammation, fungi, and viruses—without the significant side effects often linked to prescription drugs.

Consequently, essential oils are increasingly being used as alternatives to chemicals, drugs, and pharmaceuticals due to their health benefits and reduced risk of adverse reactions. Their pleasant aromas are also employed in conventional medicines and pharmaceuticals to mask undesirable odors in certain substances.

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

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

Segments

Citrus to Lead Market Due to Rising Consumer Popularity

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, driven by its outstanding functional properties, widespread availability, and appealing organoleptic characteristics. Strong demand dynamics for citrus essential oils further reinforce its market dominance.

Food & Beverage Segment Expected to Lead Due to Rising Demand for Essential Oils

The market is segmented by application into spa & relaxation, food & beverages, personal care & cosmetics, pharmaceuticals & medicinal formulations, and others. The food & beverages segment is projected to hold the largest share over the forecast period, fueled by the growing use of essential oils in food products to enhance sensory qualities, extend shelf life, and improve storage stability.

Increasing Product Awareness Boosts 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 channel currently holds the largest market share, driven by consumers’ increasing interest in firsthand experiences of essential oil fragrances. This trend is expected to further boost growth within 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 play a critical role in the natural preservation of food, especially amid growing concerns over synthetic food additives and their potential long-term health risks. Essential oils have demonstrated antibacterial properties across a range of food products, including milk, fish, meat, dairy items, and cooked rice.

These oils are highly concentrated; for instance, producing a single pound of lavender oil requires roughly 250 pounds of lavender flowers. This increasing demand, coupled with limited supply, is anticipated to drive up prices, potentially limiting their accessibility in various application sectors within developing economies.

Regional Insights-

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

In 2022, Europe is expected to lead the market, driven primarily by cosmetic manufacturers increasingly incorporating essential oils into their formulations. The rising popularity of aromatherapy in countries such as the U.K., Germany, and France is also anticipated to play a significant role in boosting the growth of the essential oils market.

North America is projected to capture the second-largest market share, with a significant rise in demand for essential oils expected throughout the forecast period.

Competitive Landscape-

Industry Association a Priority for Prominent Companies in the Market

The global essential oils market is highly fragmented, largely due to the strong presence of local and private-label brands across various regions. Leading companies like International Flavors and Fragrances Inc., Givaudan International SA, and Symrise AG are actively pursuing mergers and acquisitions to strengthen their market positions and expand 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.)