Europe Essential Oil Market Outlook to 2030

Europe Essential Oil Market Overview

• The Europe Essential Oil Market was valued at USD 1.65 billion in 2023. The market's growth is primarily driven by the increasing consumer inclination towards natural and organic products, including essential oils, across various industries such as cosmetics, personal care, and aromatherapy. The demand for essential oils in the food and beverage industry, particularly as natural flavoring agents, also contributes significantly to market growth.
• Key players in the Europe Essential Oil Market include Firmenich SA, Givaudan SA, Symrise AG, Young Living Essential Oils, and doTERRA International. These companies dominate the market due to their extensive product portfolios, strong distribution networks, and continuous investment in research and development for new product formulations and sustainable sourcing.
• In 2023, Symrise AG announced the expansion of its essential oil production facility in Spain, enhancing its capacity to meet the growing demand in Europe. This expansion is expected to increase the production further strengthening Symrise's market position. This development aligns with the company's strategy to focus on sustainable and high-quality essential oils, catering to the rising consumer demand for natural products.
• France is the dominant region in this market, particularly in the Provence region, known for its extensive lavender fields. In 2023, Provence accounted for around one-third of Europe's lavender oil production, largely due to its favorable climate and long-standing tradition of essential oil production. The region's dominance is further supported by strong local expertise in cultivation and extraction techniques, making it a key supplier for both domestic and international markets.

Europe Essential Oil Market Segmentation

The Europe Essential Oil Market is segmented into product type, application and region.

1. By Product Type: The market is segmented by product type into citrus oils, lavender oil, and peppermint oil. In 2023, citrus oils held a dominant market share. The dominance of citrus oils is attributed to their widespread use in the food and beverage industry as natural flavoring agents, particularly in the production of beverages and confectionery.

2. By Application: The market is further segmented by application into cosmetics & personal care, food & beverage, and aromatherapy. In 2023, the cosmetics & personal care segment held the largest market share. The dominance of this segment is driven by the increasing consumer preference for natural and organic skincare products, with essential oils being a key ingredient in formulations for moisturizers, serums, and hair care products. The growing awareness of the benefits of essential oils in skin health, combined with the rising trend of DIY beauty products, has also contributed to the segment's leading position.

3. By Region: The market is segmented by region into North, South, East, and West. In 2023, the Southern region, particularly Provence in France, dominated the market share. This dominance is primarily due to the region's favorable climate for the cultivation of essential oil-bearing plants, such as lavender and citrus fruits. The region's well-established essential oil production industry, coupled with strong export capabilities, ensures its leading position in the European market.

Europe Essential Oil Market Competitive Landscape

• Givaudan SA: In July 2024, Givaudan, a global leader in Fragrance & Beauty and Taste & Wellbeing, completed the acquisition of b.kolormakeup & skincare (b.kolor), an innovative Italian company specializing in developing and producing finished make-up and skincare products.This acquisition aligns with Givaudan's 2025 strategy to expand its presence in the beauty categories.
• Young Living Essential Oils: Young Living Essential Oils celebrated its 30th anniversary during the YL30 International Grand Convention held from July 17 to 20, 2024, at the Salt Palace Convention Center in Salt Lake City, Utah. This significant event gathered Young Living Brand Partners and wellness enthusiasts from around the globe, both in person and virtually, to commemorate three decades of the companys journey towards promoting wellness through essential oils.

Europe Essential Oil Industry Analysis

Growth Drivers

• Increasing Demand for Natural and Organic Ingredients in the Personal Care Industry: Europe in the market, with imports valued at over 1,844 million in 2022. This gain in demand is powered by heightened consumer awareness about the benefits of natural products over synthetic ones, leading to an increase in essential oil consumption, which has further accelerated the demand for essential oils in personal care formulations, making it a key growth driver for the market.
• Expansion in Aromatherapy and Wellness Tourism: The expansion of aromatherapy and wellness tourism across Europe has led to a substantial increase in the demand for essential oils. The popularity of these treatments has not only boosted the essential oils market but also led to collaborations between essential oil producers and wellness centers, driving further growth.
• Rise in Demand from the Food and Beverage Industry: Essential oils like lemon, peppermint and lavender are being widely incorporated into European food and drink products to provide natural flavors.In 2024, over 5,000 new food and beverage products containing essential oils were launched in Europe.Beverages, confectionery and bakery items are key applications, as essential oils replace synthetic flavorings in these categories. The growing preference for organic and non-GMO ingredients in food products is further boosting the demand for essential oils in this sector.

Challenges

• Rising Costs of Organic Certification: There is an increase in certification costs particularly in burdensome for small-scale farmers and producers, limiting their ability to compete in the market. The high cost of certification could also lead to a reduction in the number of certified organic essential oil producers, thereby affecting the market supply. The rising costs associated with obtaining organic certification for essential oils are a growing challenge for producers in Europe.
• Climate Change Impacting Crop Yields: Climate change poses a challenge to the Europe Essential Oil Market, as unpredictable weather patterns have started to affect crop yields. A key raw material for essential oil production. The impact of climate change on essential oil-bearing crops not only affects the quantity but also the quality of the oils produced. This challenge is expected to persist, potentially leading to price volatility and supply shortages in the market.

Government Initiatives

• Subsidies for Organic Farming: The European Commission has pledged 185.9 million for promoting sustainable and high-quality EU agri-food products in 2024, with 40 million specifically allocated for organic products. The increased financial support is expected to help reduce production costs for farmers, enhancing market growth prospects for organic products including essential oil.
• Support for Small-Scale Farmers: In 2024, the European Union launched a new program providing financial support and training for small-scale farmers engaged in essential oil production. The program, with a budget of EUR 30 million, aims to help farmers adopt sustainable farming practices and improve the quality of their crops. This initiative also includes grants for upgrading distillation equipment, ensuring higher yield and better quality of essential oils. The program is expected to strengthen the position of small-scale farmers in the essential oil market, contributing to the overall market growth.

Europe Essential Oil Market Future Outlook to 2028

The Europe Essential Oil Market is projected to grow continuously in the coming years. This growth will be driven by increasing awareness of the therapeutic benefits of essential oils, expansion in the application areas including pharmaceuticals, and the continued shift towards natural ingredients in the food and beverage industry.

Future Trends

• Expansion of Essential Oils in the Pharmaceutical Industry: The use of essential oils in the pharmaceutical industry is expected to grow substantially over the next five years. This trend will be driven by ongoing research into the therapeutic benefits of essential oils, supported by the European Medicines Agency (EMA), which is expected to approve more essential oil-based products along with pharmaceutical industrys increasing focus on natural and plant-based ingredients.
• Growth in E-commerce and Direct-to-Consumer Sales: E-commerce and direct-to-consumer sales channels are expected to play an increasingly important role in the Europe Essential Oil Market over the next five years. By 2028, online sales of essential oils in Europe are projected to exceed, driven by the growing popularity of online shopping and the convenience it offers. The rise of e-commerce platforms and direct-to-consumer brands will allow essential oil producers to reach a wider audience, including niche markets.