The global essential oils market size was US$7.03 billion in 2018 and is projected to reach US%14.6 billion by the end of 2026, exhibiting a compound annual growth rate (CAGR) of 9.65% in the 2019-2026 forecast period. Essential oils are hydrophobic/non-water-soluble liquids containing volatile aroma compounds of the plants. With an essential oil market valued at US$18 billion in 2020 and projected to reach US$33 billion by the end of 2027—a growth rate of 7,5% over the next 6 years—the time for South African producers to export has never been more favourable.
Essential and vegetable oils are used by the flavour and fragrance industries to create flavours for foods and beverages, perfume compounds for cosmetics, household products and fine fragrances, amongst many other applications. Thus, the potential for export growth is vast.
The essential oils market is primarily propelled by the robust trend of ‘green’ consumerism amidst the growing popularity of natural inputs for food preservation and sensory-related aspects. There has been a gradual increase in consumers’ understanding of the detrimental health effects of synthetic chemicals added for flavour applications.
Manufacturers are thus encouraged to utilise natural inputs such as essential oils for increasing the aesthetic appeal of food products alongside improving the nutritional and functional properties, which will contribute significantly to essential oils’ market growth.
Global Essential Oils Market Size: 2015-2026: US$7, 03 billion, post-2026: US$14, 60 billion.
These oils have a crucial role to play in the natural preservation of foods amidst the growing concern about synthetic food additives and their long-term detrimental effects. Various clinical studies involving essential oils in the concentration range of 0.5-20 microliters per gram have indicated antibacterial actions in the foods such as fresh meat, meat products, fish, milk, dairy products, vegetables, fruit and cooked rice.
Significant synergy has been established by utilising mild preservation methods along with essential oils. The greater push for research and development (R&D) in essential oils’ incorporation as a food additive is expected to provide further impetus to the market. 
Figure 1 gives an overview of the six leading European importers of speciality vegetable oils
Market Segmentation
“Citrus-based essential oils dominate the global market owing to their availability, strong demand dynamics and superior functional and organoleptic characteristics”. Orange- and lavender-based oils are leading the essential oils market owing to their active qualities that are utilised for topical and oral applications. The food and beverages sector is the leading application of such oils that act as natural antimicrobials. These oils exhibit effective inhibitory actions against spoilage causing microbes.
Regional Analysis
Europe and North America dominate essential oils’ market share. The developed markets of the European Union and the U.S. have recognised some components of essential oils, such as carvacrol, carvone, cinnamaldehyde, citral, pcymene, etc., as a legally registered flavouring. Cosmetic manufacturers in Europe are inclining heavily towards the inclusion of essential oils in their formulations.
The growing demand for aromatherapy in major markets like France, Germany and the U.K. is expected to further contribute to the sales of such oils, boosting essential oils’ market revenue as a result. The emerging and urbanising economies of Asia Pacific and South America are expected to become hotspots in the global essential oils market during the forecast period (2019-2026). The extent of North America’s essential oils market is reported as having been US$1,71 billion in 2018.
The countries mentioned in figure 2 produce several specialty vegetable oils, not all of which are used in cosmetics or can be classified as fruit seed oils. Examples of specialty oils from these countries include: Marula oil, Argan oil, Melonseed oil and Baobab oil.
Source: Southern African Essential Oil Producers’ Association