Recent studies have suggested that the GLOBAL ESSENTIAL OIL MARKET IS SET TO REACH A STAGGERING USD 11.67 BILLION BY 2022, today it is estimated to be at USD 5.51 billion. That’s around a 10% year-on-year growth – good news for all you’d assume?
This growth is primarily based on a growing consumer awareness regarding the health benefits associated with natural and organic ingredients in personal care, beverages and household products. This continued trend of moving away from synthetic ingredients should ensure that we see year on year demand growth but with this trend the risks associated with dealing with natural products also increase. To ensure that we don’t face future supply issues we need to continue to invest in projects at grass roots level, by trying to grow products in different countries and regions to reduce the risks of being dependant on any one area for one product. Only with greater diversity of supply sources will we be able to sustain this anticipated growth, which is why ULTRA CONTINUES TO INVEST IN OUR SUPPLY.
The GLOBAL ESSENTIAL OIL MARKET DEMAND WAS ESTIMATED AT 165,000MT in 2014 with orange oil leading the way accounting for 29.1% of total market volume. Orange oil’s environmentally friendly characteristics make it suitable for use in perfumes, household cleaners and as a biological pest control agent. Also it is expected to be one of the highest growth essential oils products with forecasts of 9.7% year on year from 2015 to 2022. Bad news considering the immediate supply outlook in 2016 (continue reading details in ‘Brazil’)!!
It’s not just orange which is facing challenges. Fresh CITRUS FRUIT DEMAND IS GROWING around the world in particular for lemon and limes. Taking into consideration that the oil market is a by-product of the fresh citrus market this could result in less fruits for processing, meaning less oil. Add to this the growing demand across the beverage markets then you can see potential unbalances in the years ahead.
Food & beverages is the dominant segment within the essential oil market commanding a demand share estimated to be over 30% in 2014. Growth of the food & beverages industry particularly in Asia Pacific is expected to drive this segment forward over the coming years.
Another emerging market is that of the aromatherapy sector in Europe and North America. Moving away from conventional drugs and medicines to alternative, natural remedies has created a huge market expansion with other regions yet to follow. This is also the case with the spa market particularly in South East Asia which has accounted for some significant growth in recent years and will continue to do so in future years.
EUROPE WAS THE LEADING MARKET FOR ESSENTIAL OILS with a market share exceeding 40% in 2014. This is attributed to a greater awareness amongst consumers regarding health benefits offered by natural and organic products. Asia Pacific is expected to witness the highest per annum growth of 9.2% from 2015 to 2022.
So whilst thinking about tomorrow’s supply and how 2016 is shaping up, it Is important to look at the bigger picture and think about our future. The good news is that we all have a future and with market growth there’s plenty of room for all of us. How will you shape your business for the future? Here’s our review of 2015 and our interpretation of the year ahead.