Essential Oils- A Steadily Emerging Health Product

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Essential Oils

Essential oils are non-water soluble liquids comprising unstable plant aroma. Green consumerism is a major factor elevating the product’s sales figures. With the increasing popularity of natural products, the demand for the product may experience a two-fold incline. According to estimations, the essential oils industry will reach USD 18.25 billion in 2028.  The global essential oils market size was USD 8.74 billion in 2020. The market is expected to grow from USD 9.62 billion in 2021 to USD 18.25 billion in 2028, growing at a CAGR of 9.57% during the 2021-2028 period.

Health Benefits Associated with the Oil Will Incite Demand

With the increasing pursuit for developing a healthy immune system, the awareness regarding the oil’s health benefits is increasing exponentially. Further, the increasing demand for natural and organic products from consumers facilitated the adoption of natural oils. Manufacturers, such as Young Living Essential Oils and doTERRA, report a rapid incline in sales as consumers opt for oils to enhance their health. In addition, manufacturers have leaned on online mediums to enhance sales and expand their consumer base. 

Factors Inclining the Demand for the oils

  • Extensive adoption of the oil in aromatherapy uses will bolster the product’s adoption.
  • Rising investments in research and development leads to the development of high quality products, thereby attracting consumers. 
  • Robust growth of the tourism sector will boost aroma oils’ sales and consumer base. 
  • Adoption of natural and active ingredients for the creation of the oil will enhance product demand. 
  • Integration of several other oils into cosmetic products will enhance adoption.  
  • Manufacturers opt for online retail as it offers consumers with a convenient shopping experience.
  • The adoption of online platforms has enabled manufacturers to tackle the COVID-19 pandemic and balance their costs.
  • Companies invest extensively in creating an authentic online shopping and distribution to capture a large consumer base and enhance workflow. 
  • Rapid development of the food & beverage industry is expected to enhance consumers’ demand for essential oils. 

Major Challenges faced by the Industry

  • Lack of demand for the product due to high costs. 
  • Availability of cheaper and similar products with better offerings.
  • Highly competitive nature of the global business environment.
  • Robust demand for medium-priced goods.
  • Lack of widespread awareness regarding the oil’s benefits.

Strategies Adopted by Major Players

Key players focus on deploying effective strategies to Boost sales and overcome losses. Manufacturers invest heavily in advertisements and incorporate effective pricing strategies to enhance their pricing strategy to overcome restraints and enhance their sales. Further, manufacturers launch innovative products to enhance their brand image. For example, Robertet launched its encapsulated powdered essential oil in June 2019. The product utilizes new technologies for its adoption in the nutraceutical industry. 

Moreover, companies focus on adopting strategic partnerships, acquisitions, mergers, and expansions to boost their annual revenues, achieve set goals, and boost their market position. 

Major Players Operating in the Industry

  • 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.)

As Consumer Demand for Natural Products Rises, the Future of this Industry Shall Boom

As the trends of natural and eco-friendly products are gaining momentum, the demand for high-quality essential oils may increase. The rising awareness regarding the product’s benefit and the rising investments by manufacturers in the development of high-quality products may foster the market growth. Further, with the adoption of online retail, consumers get access to many products and services, thereby increasing the products’ sales. Moreover, rapid development of the food & beverage and cosmetics sector is expected to enhance the essential oils industry growth. 

Additionally, the strong demand for plant-based products is expected to enhance essential oil adoption. The rising demand for green products may propel the progress of the industry. These factors indicate that the market shall experience strong growth in the coming years.