U.S. Essential Oil Market – Industry Trends and Forecast to 2029

U.S. Essential Oil Market Analysis and Insights

Essential oils can be defined as either products or mixtures of fragrant substances or as mixtures of fragrant and odourless substances. These fragrant substances are chemically pure compounds that are which provide the respective distinguishability. They are extracted through various methods such as distillation, cold press extraction, solvent extraction, enzymatic extraction, and many others. The use of essential oils is rising due to the demand from the food & beverage industry for the preparation of various products such as soft drinks, bakery products, sports drinks, and many others. Furthermore, the essential oils have gained demand due to the spa & relaxation centers across the nation.

The increase in the technological advancement of essential oils and rising demand for rapid and sensitive technologies in food & beverages products, personal care and cosmetic are expected to create immense opportunities for the manufacturers of essential oils. On the other hand, the exhaustion of natural resources and the handling issue due to its liquid nature may challenge the market's growth.

Data Bridge Market Research analyses that the essential oil market is expected to reach the value of USD 5,953.07 million by 2029, at a CAGR of 10.0% during the forecast period.

Market Definition

Essential oils are concentrated plant extracts that retain their source's natural smell, flavor, and essence. Unique aromatic compounds give each essential oil its characteristic essence. Essential oils are obtained through distillation (via steam and water) or mechanical methods, such as cold pressing. The oils capture the plant's scent and flavor, and essence. They are mostly named after the plant from which they are derived. The applications of essential oils are diverse. Widely used in cosmetics, perfumes, food & beverages, they also have medicinal applications due to their therapeutic properties and agro-alimentary uses because of their antimicrobial and antioxidant effects

U.S. Essential Oil Market Dynamics

Drivers

• Increase in awareness related to the health benefits of essential oils

Essential oils are light-to-medium-coloured, clear liquids that are pourable at low temperatures. Nowadays, consumers are more conscious regarding their health; thus, they demand healthier products that give more nutritional value. Essential oils are also rich in vitamins, especially vitamin E (tocopherol and tocotrienol), and are rich in mineral content. The content of potassium, phosphorus, and copper is also found in these oils. Thus, consumers demand and prefer pharmaceuticals and supplementary diets made from essential oils due to the uncountable health benefits of essential oils. Due to this, manufacturers are also trying to launch new essential oil products to fulfil the demands of the consumers. This factor is expected to drive the growth of the U.S. essential oil market.

• Rise in demand for essential oils from the food supplementary industry

Essential oil is widely used in the food supplementary industry as it is a great energy value. A significant proportion of the oil amaranth accounts for the importance of the body's polyunsaturated fatty acids. They are involved in synthesizing components of cell membranes, providing resistance to damaging effects, accelerating cholesterol metabolism in the liver, and normalizing the state of the walls of blood vessels. The phospholipids in essential oils regulate fat metabolism and form the structure of the nervous tissue, liver cells, and brain. In addition, the protective properties of cell membranes are formed, normal growth and reproduction of cells are ensured, and cholesterol is removed from the body. Thus, essential oils are used in food supplements in the form of capsules, tablets, pills, and liquids. The essential oil in capsules or any other form is called a dietary or food supplement.

Opportunities

• Shift towards aromatherapy

Aromatherapy is increasingly considered a popular therapy, with more spas opening in various areas, increasing consumer awareness of well-being, higher demand for natural products, and its benefits in psychological and physiological health. The use of essential oils in aromatherapy for personal care and therapeutic purposes offers tremendous growth potential. This type of alternative therapy utilizes various combinations of essential oils to get relief from various ailments like depression, indigestion, headache, insomnia, muscular pain, respiratory problems, and others. For example, Thyme essential oil is widely used in aromatherapy to help reduce fatigue, nervousness, and stress. The availability of a wide range of aroma oils is expected to boost the U.S. essential oil market. Due to this shift in the aromatherapy trend, demand for organic and certified 100% pure and natural essential oil is also increased. Thus, increasing awareness about aromatherapy and its possible health benefits influences customers. There has been a consistent demand for essential oil in the personal care and cosmetic sectors; thus, the demand for essential oil enables manufacturers to launch new products to expand further, which may promote market growth in the forecast period.

Restraints/Challenges

• Lack of availability of raw materials

The lack of availability of raw materials can be caused due to climatic conditions. In unfavorable climatic conditions, it is difficult for farmers to cultivate and grow plants such as herbs, spices, mint, citrus fruits, and others, thus less available raw materials.

The fluctuating production of these plants has resulted in the volatile supply of these plants in the form of seeds, roots, leaves, and others. The volatile supply of raw materials also drives the prices of the end product, these essential oils. The limited raw material availability is expected to hamper the market's overall value chain, a key restraining factor of the U.S. essential oil market.

Thus, the lack of raw material availability may cause the switching of consumers to other products and can also affect the supply chain.

The outcomes from limited materials availability are:

• Technological: Supply chain stakeholders may redesign their products by using substitute materials
• Geographic: The upstream supply chain may reconfigure to tap into new sources
• Operational: Downstream firms may alter inventory practices or work to recover alternative materials streams

Thus, this lack of availability of raw materials enables the consumer to switch to substitutes which may restrain the market's growth.

• Low production volumes of essential oils

Low production volumes of essential oils are expected to affect the market growth for U.S. essential oil market. High transportation rates, increased variability in rainfall, and intensive summer drought, can be considered the main constraints to these crop productions.

Under such conditions, adopting sustainable agricultural practices and introducing new/ underutilized crops, able to diversify cropping systems and mitigate climate changes, can represent very promising strategies in addressing cropping system sustainability, crop improvement, and food security.

Extracting squalene from these various products, such as herbs, spices, and others, requires a long process such as distillation, drying, and oil packaging. However, due to distillation, the yield of essential oil can be less, which affects the production volumes of essential oil. In addition, less access to raw materials such as herbs, spices, and others also leads to low production volumes.

Thus, the low production volumes are expected to affect the market growth due to uncertainty in weather and the time-consuming extraction process, as well as the low content of oil after extraction. Moreover, it is expected to restrain the growth of U.S. essential oil market growth to some extent.

Post COVID-19 Impact on U.S. Essential Oil Market

Post the pandemic, the demand for essential oils has increased as there won't be any more restrictions on movement, so the supply of products would be easy. In addition, the growing trend of using essential oils for their therapeutic properties and natural ingredients may propel the market's growth.

The increased demand for essential oils enables manufacturers to launch innovative and multifunctional essential oils, which ultimately increases the demand for essential oils and has helped the market grow.

Moreover, the high demand for essential oils for food and beverages and personal care products will drive the market's growth. Furthermore, the increased demand for products that boost the immune system after the COVID-19 pandemic as consumers were more concerned about their health and wellness resulted in market growth. Additionally, consumers' interest in new flavors and enhanced fragrances is expected to fuel the growth of the U.S. essential oil market.

Recent Developments

• In October 2020, dOTERRA launched several new essential oil products Helichrysum touch, and three new wellness programs designed to help people focus on health goals
• In August 2020, Young Living Essential Oils launched new products in the happy, healthy home category, including Cassia oil, Ecuadorian oregano oil, one heart essential oil

U.S. Essential Oil Market Scope

U.S. essential oil market is segmented into seven segments based on type, parts used for extraction, extraction method, nature, category, product category, and application. The growth amongst these segments will help you analyze major growth segments in the industries and provide the users with a valuable market overview and market insights to make strategic decisions to identify core market applications.

Type

• Citrus Oils
• Herb Oils
• Aromatic Oils
• Mint Oils
• Spice Oils
• Spice Seed Oils
• Others

On the basis of type, the essential oil market is segmented into citrus oils, herb oils, aromatic oils, mint oils, spice oils, spice seed oils, and others.

Parts used for extraction

• Flowers
• Leaves
• Fruit
• Cloves
• Seed
• Bark

On the basis of parts used for extraction, the essential oil market is segmented into flowers, leaves, fruit, cloves, seed, and bark.

Extraction Method

• Cold Pressed
• Solvent Extraction
• Supercritical Extraction
• Enzymatic Extraction
• Others

On the basis of extraction method, the essential oil market is segmented into cold pressed, solvent extraction, supercritical extraction, enzymatic extraction, and others.

Nature

• Organic
• Conventional

On the basis of nature, the essential oil market is segmented into organic and conventional.

Category

• Natural
• Synthetic

On the basis of category, the essential oil market is segmented into natural and synthetic.

Product Category

• Singles
• Blends

On the basis of product category, the essential oil market is segmented into singles and blends.

Application

• Food & Beverages
• Aromatherapy
• Personal Care
• Cosmetic
• Home Care
• Dietary Supplements
• Sports Nutrition
• Animal Feed
•  Others

On the basis of application, the essential oil market is segmented into food & beverages, aromatherapy, personal care, cosmetic, home care, dietary supplements, sports nutrition, animal feed, and others.

Competitive Landscape and Essential Oil Market Share Analysis

The essential oil market competitive landscape provides details of the competitors. Details included are company overview, company financials, revenue generated, market potential, investment in research and development, new market initiatives, U.S. presence, production sites and facilities, production capacities, company strengths and weaknesses, product launch, product width, and breadth, and application dominance. The above data points only relate to the companies' focus on the essential oil market.

Some of the major players operating in the essential oils market are RopaPharm Delacon Biotechnik GMBH, doTERRA, Kelvin Natural Mint Pvt. Ltd., Young Living Essential Oils, AURA CACIA, Kshrey, Inc, Silverline Chemicals, Vigon International, LLC., Bulk Apothecary, Lemon Oil Manufacturers, and KM Chemicals, among others.

Research Methodology

Data collection and base year analysis are done using data collection modules with large sample sizes. The market data is analyzed and estimated using market statistical and coherent models. In addition, market share analysis and key trend analysis are the major success factors in the market report. The key research methodology used by the DBMR research team is data triangulation which involves data mining, analysis of the impact of data variables on the market, and primary (industry expert) validation. Apart from this, data models include Vendor Positioning Grid, Market Time Line Analysis, Market Overview and Guide, Company Positioning Grid, Company Market Share Analysis, Standards of Measurement, U.S. Vs Regional, and Vendor Share Analysis. Please request an analyst call in case of further inquiry.

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