Essential for healing

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Updated: January 05, 2016 1:41 PM

Many essential oil manufacturers in India foresee tremendous business growth opportunities in customising essences for different spas and cosmetic companies. This market has also seen an increasing demand for popular oils like Lavender, Rosemary, Tea Tree, Geranium, Rose, Jasmine, Lemon, Orange, Frankincense, Lemongrass, Patchouli, Peppermint and Ylang Ylang By Kahini Chakraborty

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Many essential oil manufacturers in India foresee tremendous business growth opportunities in customising essences for different spas and cosmetic companies. This market has also seen an increasing demand for popular oils like Lavender, Rosemary, Tea Tree, Geranium, Rose, Jasmine, Lemon, Orange, Frankincense, Lemongrass, Patchouli, Peppermint and Ylang Ylang By Kahini Chakraborty

Globally the demand for the essential oil market was valued at around US$ 5.50 billion in 2014 and it is expected to reach around US$ 9.80 billion in 2020, growing at a CAGR of approximately nine per cent between 2015 and 2020, according to a report published by Zion Research titled ‘Essential Oil (Orange, Corn Mint, Eucalyptus, Citronella, Pepper Mint, Lemon, Clover Leaf, Lime, and Spearmint) Market for Medical, Food & Beverage, Spa & Relaxation, Cleaning & Home, and Other Applications: Global Industry Perspective, Comprehensive Analysis and Forecast, 2014 – 2020.’ In terms of volume, the global essential oil market stood at 160.0 kilo tons in 2014. With the spa and wellness segment gaining importance in lifestyle, Lavender Oil, Lemongrass Oil, Peppermint Oil, Lemongrass Oil, Orange Oil, Lavender Oil, Rosemary Oil, Spearmint Oil, Basil Oil, Citronella Oil etc, have been the mostly used essential oils in the spa section.

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As per the report, essential oils are also known as volatile or ethereal oil or aetherolea. An essential oil is a concentrated hydrophobic liquid containing volatile aroma compounds from plants. It is extracted from the vast variety of plants and herbs like orange, corn mint, eucalyptus, citronella, pepper mint, lemon, clover leaf, lime, and spearmint, etc. Essential oils are generally extracted by distillation, by using steam. Other processes include expression, solvent extraction, absolute oil extraction, resin tapping, and cold pressing. They are used in perfumes, cosmetics, soaps and other products, for flavouring food and drink, and for adding scents to incense and household cleaning products.

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The global essential oil market is mainly driven by the increasing demand from natural and organic care products due to increasing health issues among consumers. The development of the organic product industry is attracting the attention of consumers and manufacturers. Sharp rise in demand for natural aromatic flavours and fragrances in cosmetics, perfumes, as well as spa and relaxation applications is anticipated to foster the demand for essential oils. However, availability of synthetic substitutes and high prices of essential oils will be major concern for manufacturers. Prince Goenka of Katyani Exports says, “Each essential oil has its individual therapeutic benefits, e.g Lavender Oil for calming, sound sleep, Tea Tree Oil for acne, etc. We produce more than 50 essential oils. Most commonly used in this industry are Peppermint Oil, Lemongrass Oil, Orange Oil, Lavender Oil, Rosemary Oil, Spearmint Oil, Basil Oil, Citronella Oil, etc.”

Price variation

Orange, Corn Mint, Eucalyptus, Citronella, Peppermint, Lemon, Clover Leaf, Lime, and Spearmint are the key product segments of the essential oil market. Orange was the leading segment, which accounted for more than 35 per cent share of the total volume consumption in 2014. Orange Oil possesses medical benefits like antiseptic, anti-inflammatory, and antidepressant. Corn Mint Oil is one of the fastest growing products and provides numerous health advantages.

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Elaborating on the price range of these essential oils and the demand for the same, Ashish Khandelwal, CEO, Moksha Lifestyle Products informs, “The prices can range from Rs 800 per kg to Rs 65,000 per kg and depends on the raw material prices, extraction ratio, shelf life, and other factors. The current market scenario is steady with our annual quantum of sale being around 60 MT of different essential oils combined. We produce over 150 types of essential oils, more than 50 fragrance oils, more than 30 types of carrier oils and other allied products for the spa and cosmetic industry.” Apart from supplying to local suppliers, Moksha Lifestyle Products also supplies directly to a lot of spa chains such as R3 Naturals, BodySpa, etc. Giving another perspective, Nilesh Barjatya, director, Suyash Group also informs, the price range of these essential oils ranges from Rs 500 per kg to Rs 5,00,000.00 per kg.

While Goenka adds, the price range could be Rs 200 – Rs 10,00,000 per kg (castor, sesame, olive are the cheapest, and essential oils like rose, etc are quiet expensive).

Expected growth

On the basis of applications, the essential oil market has been segmented as medical, food and beverage, spa and relaxation, cleaning and home and other. Food and beverage was the largest application market for essential oils and accounted for over 30 per cent share of the total revenue generated in 2014. The food and beverage industry is expected to witness robust growth during the forecast period. This in turn is expected to foster the demand for essential oils in the years to come. Spa and relaxation is also one of the significant outlets for the essential oil market. Many companies are also catering to customising and blending essential oils to create signature oil perfumes for hotels or spa outlets.

20150116eh31When asked about the expected business growth in the market, Goenka foresees, a growth of 20-50 per cent in the next one year. While Barjatya feels that the growth in the essential spa oils manufacturing market could be 300 per cent. Khandelwal is of the opinion that an annual growth rate of 25-30 per cent year-on-year for the next five-seven years can be expected. “We are constantly watching the market for new trends and introducing new products for the India market every few months. Soon we are going to be the only company offering certain exclusive oils such as Witch Hazel and Kukui Nut Oil. We pride in always having the first mover advantage in the India market,” adds Khandelwal. The report further highlights that the global essential oil market was dominated by Europe in terms of both volume and revenue. Upward trend in natural cosmetics and beauty products, medicines, and nutraceuticals coupled with strong demand from the aging population from developed countries such as Germany, UK and France is mainly driving the demand for essential oils in the region. The essential oil market in the Asia-Pacific region is expected to witness rapid growth as compared to other regions. North America was the second largest regional market for essential oils followed by Asia Pacific, Latin America and Middle East and Africa. Some of the key players in the global essential oil market include Biolandes, Sydney Essential Oils, HRF, The Lebermuth Company, Young Living Essential Oils, doTerra, Essential Oils of New Zealand, Sydella Laboratoire, Farotti Essenze, Moksha Lifestyle Products, West India Spices, Falcon, and Ungerer.

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