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MARKET OVERVIEW

1.1 Definition and scope of study

Essential oils are defined as complex mixtures of natural, volatile chemical substances contained in all or part of an aromatic plant. Traditionally, these essential oils are extracted by hydro-distillation or cold pressing. These two processes are long and require a certain expertise. The plants and flowers used for the production of essential oils are numerous, but we can note as examples lavender, rosewood, eucalyptus, ylang-ylang, chamomile, tea tree, geranium, citrus fruits, mint and patchouli...etc.  The main end markets for the manufacture of essential oils are food, perfumes, cosmetics, aromatherapy, cleaning products and pharmaceuticals.

There are several types of players on the market: that will be used for the production of essential oils).

  • Producers of essential oils who distill or cold press flowers and plants. They can vary in size, from craftsmen to large industrial groups;
  • Companies that consume essential oils, in various industries (cosmetics, pharmaceuticals, food processing);
  • Regulatory and control firms that check the quality and harmfulness of the oils and certify them. 

The world market for essential oils is booming, driven in particular by the dynamism of Western markets, the aromatherapy or the manufacture of cosmetic products. The world market for essential oils could thus grow by 10% per year until 2025.

Spain is one of the main European producers of essential oils and is strengthening year after year its commercial power in the sector: thus, in 2018, Spanish exports of essential oils increased by +8.4%. This commercial power is nevertheless fragile, as it is based on a few flagship essences such as grapefruit, lemon or orange. [Premium Beauty News]

1.2 The global market

Robust global growth

According to Transparency Market Research, between **** and ****, the global essential oils market is expected to grow at a CAGR of *.**%. It was valued in **** at $**.** billion and is expected to reach $**.** billion by the end of ****.

According to Grand View Research, global essential oil production was ***,*** tonnes in ...

1.3 A growing Spanish market

National production of essential oils in Spain has been growing in recent years. With just over * million tonnes of essential oils produced in ****, production grew by **% compared to the previous year, following a slight decrease between **** and **** [***].

Essential oil production Spain, ****-****, in millions of tonnes Source: ****

In terms of value ...

1.4 Imports and exports

For this section we use UN Comtrade to obtain the trade balances for Spain with the world for the category **** - "Essential oils (***), including concretes".

With nearly $*** million worth of imports and $*** million worth of exports, Spain ranked *th and *th in the world for these * trade flows in **** [***].

As it ...

DEMAND ANALYSIS

2.1 The growing popularity of beauty products

As part of the greater cosmetic market, essential oils are very much influenced by this sector. The cosmetic industry in Spain was worth *.* billion euros in ****, up *.*% from **** [***]. 

Size of cosmetic market Spain, ****-****, in billions of euros Source: ****

In this sector, it is the skin-care products that are most popular, ...

2.2 The strong growth of bio and natural cosmetics

Given the 'natural' nature of essential oils, this market is very much affected by consumer behaviour towards natural and bio cosmetic products.

Within the cosmetics sector, there is a sub-segment for bio/natural cosmetics. In ****, the Spanish market was estimated at *** million euros, or just over **% of the whole cosmetics sector ...

MARKET STRUCTURE

3.1 Breaking down Spanish production

The production of essential oils in Spain can be broken down into different aspects of its production. Considering the Spanish imports and exports of essential oils in **** (***), we use the figures provided by the UN Comtrade to breakdown these values. For this, we will use the following codes:

****** - Essential ...

3.2 A fairly concentrated market

Using the CNAE code **** (***), we can get an image of how the production of essential oils is organised in Spain.

With a combined turnover of over €*** million in ****, there were ** companies operating in this sector, giving an average revenue of around €** million per company. However, it is important to note that ...

3.3 The wider cosmetic industry

Given how the essential oil market is part of the greater cosmetic industry, we can expect similar trends between both of these.

In regards to distribution channels, cosmetic products tend to be mostly distributed in supermarkets and hypermarkets, which accounted for **% of the sector's sales in ****. Pharmacies and selective channels are ...

ANALYSIS OF THE OFFER

4.1 The different essential oils available

There are * different aspects to consider when determining whether an essential oil is of good quality or not [***]:

The AEBBD (***) stamp: This stamp means that the essential oil comes from a certified lab and that the origin of it is known. An Ecological Farming stamp from the country which it originates ...

4.2 Comparing the offer

While the production of essential oils in Spain seems to be somewhat concentrated on a few key players, the distribution of these is quite varied, with a number of different brands playing a part in the selling of these products.

Taking Amazon's top ** most sold essential oils as of April **** we ...

4.3 Stabilising prices

Following from an increase in the industrial price index of the manufacturing of essential oils in Spain between **** and ****, it seems as if since then, the price index has stabilised itself at around *** [***]. 

Industrial price index of the manufacturing of essential oils Spain, ****, base *** in **** Source: ****

REGULATION

5.1 Regulations

Being part of the wider cosmetics industry, the production and distribution of essential oils is very much governed by the regulations that rule over the production and distribution of cosmetic products.

Regulation (***) No ****/**** on Cosmetic Products, and its amendments

As taken from a document provided by the Spanish government, in the ...

POSITIONING OF THE PLAYERS

6.1 Segmentation

  • Ernesto ventos
  • Lucta
  • Givaudan
  • Iberchem
  • Symrise

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Analysts

Hugo S.

chargé d'études économiques, Xerfi

Hugo S.

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Mathieu Luinaud

Associate Consultant

Mathieu Luinaud

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Education Formation
Robin C.

PhD Industrial transformations

Robin C.

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Pierre D.

Analyst

Pierre D.

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Ross Alumni Club France

Arnaud W.

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Analyste de marché chez Businesscoot

Amaury de Balincourt

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Pierrick C.

Consultant

Pierrick C.

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Maelle V.

Project Finance Analyst, Consulting

Maelle V.

Héloise Fruchard

Etudiante en Double-Diplôme Ingénieur-Manager Centrale

Héloise Fruchard

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Imane E.

EDHEC

Imane E.

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Vincent D.

Auditeur

Vincent D.

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Eva-Garance T.

Eva-Garance T.

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Michela G.

Market Research Analyst

Michela G.

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Azelie P.

Market Research Analyst @Businesscoot

Azelie P.

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Cantiane G.

Market Research Analyst @Businesscoot

Cantiane G.

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Jules D.

Consultant

Jules D.

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Alexia V.

Alexia V.

Emil Ohlsson

Emil Ohlsson

Anna O.

Anna O.

Gabriel S.

Gabriel S.