MARKET ENTRY EUROPEAN MARKET POTENTIAL FOR ESSENTIAL OILS Aromatherapy products including essential oils are gaining popularity in Europe. Growing awareness regarding the benefits of aromatherapy at home and the shift to more natural and green ways to improve and maintain health could be reasons for this surge in popularity. As a result, the demand for essential oils is increasing in Europe. It is expected that this trend will continue, as essential oils offer many beneficial properties and can be used as a complementary treatment to conventional healing methods. What makes Europe an interesting market for essential oils? There is a growing demand for niche essential oils in the fragrance and personal care industries. Consumers are demanding high-quality natural products in the European market. The global luxury perfume market was valued at US$11.7 billion in 2018, expected to grow by a compound annual growth rate of 5.3% to reach US$16.8 billion in 2026. Increasing consumer preference for glamour, style, fashion and fragrance are key drivers for growth. Other drivers include the high purchasing power of target consumers and the high presence of luxury brands across the market. Artisanal and niche fragrances are also on the rise. They are perceived to be of higher quality, as they use a greater concentration of extracts. Growth is driven by the consumer demand for natural highquality products in Europe. According to Market Data Forecast, the global natural fragrances market is expected to grow at a compound annual growth rate of around 5% to reach US$39 billion in 2025.
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Essential oils are mostly commonly used in cosmetic products such as fragrances, skincare products, haircare products and toiletries. There is a growing market for natural and organic cosmetics in Europe; the market was valued at EUR€3.64 billion in 2018. Ecovia Intelligence projects the market to grow at a healthy rate in the coming years. The consumer demand for cosmetics and toiletries which avoid contentious chemicals is expected to fuel market growth. This healthy growth rate corresponds to a robust demand for natural ingredients, providing opportunities for potential suppliers in developing countries. The demand for aromatherapy products in Europe is also growing, as consumers are looking for alternative ways to treat health conditions. Essential oils have a wide range of properties such as stress-relief, anti-bacterial, soothing, refreshing and invigorating. They can be used to treat or alleviate symptoms of conditions such as indigestion, stress, insomnia, anxiety, depression and eczema. There is a growing trend towards more natural ways of treatment as opposed to conventional medicine. European consumers use alternative healing modalities in a complementary way alongside conventional medicine. This trend generates a demand for essential oils in Europe. The graph to the right outlines the intraand extra-EU imports of essential oils to Europe, 2015-2019. It shows that there has been a slight dip in the import of essential oils and oleoresin between 2015 and 2019. However, several reports suggest that the import value has increased. The majority of essential oils are used by the food industry.
