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The global agarwood essential oil market has experienced remarkable growth in recent years, marking a significant trajectory and is poised to reach USD 201.03 million by 2025, projecting a Compound Annual Growth Rate (CAGR) of 5.92%. This growth is attributed to various factors, including the cultural, religious, and traditional significance of agarwood, along with its expanding applications in industries such as personal care and aromatherapy. However, challenges such as the widening gap between demand and supply pose potential hurdles for the market's continued expansion.
One of the primary drivers propelling the growth of the global agarwood essential oil market is the cultural, religious, and traditional importance attached to this precious commodity. Agarwood, often referred to as "oud" in various cultures, holds deep-rooted significance and is commonly used in religious ceremonies, traditional rituals, and cultural practices. The cultural resonance of agarwood contributes significantly to its demand, fostering a robust market.
Furthermore, the increasing utilization of agarwood essential oil in industries such as personal care and aromatherapy adds impetus to the market's growth. Agarwood's aromatic properties make it a sought-after ingredient in the formulation of perfumes, incense, and various personal care products. Additionally, the therapeutic and aromatic qualities of agarwood essential oil have positioned it as a favored choice in the field of aromatherapy, driving demand from this expanding sector.
Despite the positive growth trajectory, the market faces challenges, primarily stemming from the widening gap between the demand and supply of agarwood essential oil. Agarwood is derived from the Aquilaria tree, which is predominantly found in specific regions, including Southeast Asia and parts of the Middle East. The slow growth rate of the Aquilaria tree and the increasing global demand for agarwood have led to challenges in meeting market requirements, resulting in a supply-demand gap. This disparity poses a potential constraint on the market's growth, as the industry grapples with the need to sustainably source agarwood to meet rising demand.
To address the challenges related to the sustainable sourcing of agarwood, there is a growing emphasis on conservation and cultivation initiatives. Various stakeholders, including governments, environmental organizations, and industry players, are exploring sustainable practices to ensure the long-term availability of agarwood while preserving the ecological balance.
The global agarwood essential oil market has witnessed substantial growth driven by its cultural, religious, and traditional significance, coupled with its expanding applications in personal care and aromatherapy industries. However, challenges such as the widening gap between demand and supply highlight the need for sustainable and responsible practices in agarwood sourcing. As the market navigates these challenges, there is an opportunity for stakeholders to collaborate on initiatives that balance the cultural importance of agarwood with environmental sustainability, ensuring a harmonious and thriving market for agarwood essential oil.
Covered Aspects:
| Report Attribute/Metric | Details |
|---|---|
| Market Size Value In 2022 | USD 0.25 Billion |
| Market Size Value In 2023 | USD 0.265 Billion |
| Growth Rate | 6.35% (2023-2032) |
Agarwood Essential Oil Market Highlights:
Global Agarwood Essential Oil Market Overview
Agarwood Essential Oil Market Size was valued at USD 0.25 Billion in 2023. The agarwood essential oil industry is projected to grow from USD 0.265 Billion in 2024 to USD 0.4350 Billion by 2032, exhibiting a compound annual growth rate (CAGR) of 6.35% during the forecast period (2024 - 2032). One key market driver boosting this expansion is the rising demand for agarwood essential oil in the cosmetics and personal care sector. Agarwood essential oil's demand is rising worldwide as people become more aware of its advantages.
Source: Secondary Research, Primary Research, MRFR Database and Analyst Review
Agarwood Essential Oil Market Trends
- Growing trend for aromatherapy is driving the market growth
One of the main drivers of market expansion is the increased demand for aromatherapy. An alternative medical practice known as aromatherapy can increase energy levels, speed healing, relieve headaches, improve digestion and circulation, induce sleep, enhance cognitive function, lessen anxiety, and lessen sadness. Worldwide interest in aromatherapy is rising, and several companies are developing essential oils specifically for its use. For instance, one example is the Dear Mom line of limited-edition essential oils from Plant Therapy Essential Oils. The product is designed to help mothers unwind and relieve stress and worry. The manufacturer said the new product would produce a pleasant, sweet perfume and encourage peace and relaxation. As a result, throughout the forecast period, the agarwood essential oil market CAGR would benefit from the rising popularity of aromatherapy among consumers.
Furthermore, agarwood essential oil use has increased as people become more aware of the benefits of organic essential oils for the skin and hair. Due to expanding consumer disposable income, people in developing Asian Pacific countries like South Korea, China, and India can now buy price-sensitive goods like agarwood oil. Agarwood essential oil is more than simply an aromatic, sweet oil used in perfumery; it also has many extraordinary medical benefits, including easing both physical and mental symptoms of sleeplessness, migraine, stress, burns, skin conditions, insect bites, infections, and psychological strain. These qualities have led to an increase in the demand for agarwood essential oil. The demand for genuine oil products among consumers is rising today. This has led to a sharp increase in demand for genuine oil products. Manufacturers and producers of fragrance and incense products are increasing their range in response to consumer demand and market research. Because the market for essential oils offers high-profit margins, more producers are entering it. In the upcoming years, various manufacturers plan to release agarwood oil-based goods. Additionally, it is anticipated that rivals would market their goods using natural labeling to draw in current clients and increase the number of new ones. Thus, driving the agarwood essential oil industry revenue.
Agarwood Essential Oil Market Segment Insights
Agarwood Essential Oil Type Insights
The agarwood essential oil industry segmentation, based on type includes compound essential oil and pure essential oil. The pure essential oil segment dominated the market. The growing demand for pure agarwood essential oil will drive the expansion of the market for agarwood essential oil throughout the forecast period due to the increasing use of agarwood essential oil in various applications including cosmetics and personal care, medicine, therapeutics, and household cleaning.
Figure 1: Agarwood Essential Oil Market, by Type, 2022 & 2032 (USD Billion)
Source: Secondary Research, Primary Research, MRFR Database and Analyst Review
Agarwood Essential Oil Raw Material Insights
The agarwood essential oil market segmentation, based on raw material includes wood, flowers, bark and resin. The wood segment dominated the market. Wood is the main raw material used to produce agarwood essential oils. Agarwood, sometimes called oud or aloeswood, is a resinous wood prized for its aromatherapeutic qualities.
Agarwood Essential Oil Application Insights
The market for agarwood essential oil segmentation, based on application includes food and beverage industry, cosmetics and personal care industry and pharmaceutical industry. The cosmetics and personal care industry segment dominated the market. The demand for agarwood essential oils for cosmetic and personal care applications has increased due to consumers' growing health and skincare consciousness. Because of its exorbitant price, agarwood is called "liquid gold." Agarwood is one of the most expensive cosmetic extracts in the world since only a few unique and old Agarwood trees have this resin.
Agarwood Essential Oil Sales Channel Insights
The agarwood essential oil market segmentation, based on sales channel, includes specialty drug stores, supermarkets or hypermarkets, e-commerce and convenience stores. The e-commerce category generated the most income. Sales of agarwood oil through various e-commerce platforms have increased by 4.8% due to consumers' preference for online shopping and services like doorstep delivery. People who want agarwood oil go to various outlets specializing in plant-based aromatic items.
Agarwood Essential Oil Regional Insights
By region, the study provides the market insights into North America, Europe, Asia-Pacific and Rest of the World. The North American agarwood essential oil industry area will dominate this market. In established regions like North America, the demand for organic agarwood essential oil is rising sharply. The market for agarwood essential oil is experiencing growth and profitability among companies with large production capacities and R&D capabilities. Reputable firms aim to increase their regional visibility and improve their production capabilities, which will increase their market revenue share.
Further, the major countries studied in the market report are The US, Canada, German, France, the UK, Italy, Spain, China, Japan, India, Australia, South Korea, and Brazil.
Figure 2: AGARWOOD ESSENTIAL OIL MARKET SHARE BY REGION 2022 (USD Billion)
Source: Secondary Research, Primary Research, MRFR Database and Analyst Review
Europe agarwood essential oil market accounts for the second-largest market share due to a variety of health advantages and several uses in a variety of industries, including personal care, cosmetics, and pharmaceuticals. Leading European markets for the selling of agarwood essential oils include Germany, the UK, France, and Spain. New cosmetics are being developed by cosmetic manufacturers that include agarwood essential oils. The market for agarwood essential oils is expanding in Europe in part due to the region's rising demand for aromatherapy products. Further, the German market for agarwood essential oil held the largest market share, and the UK agarwood essential oil industry was the fastest growing market in the European region
The Asia-Pacific Agarwood essential oil Market is expected to grow at the fastest CAGR from 2023 to 2032 because there are a growing number of producers of agarwood essential oils to meet the always growing demand. Due to the growing urban population and rising disposable incomes, demand is quite strong. Moreover, China’s agarwood essential oil industry held the largest market share, and the Indian market of agarwood essential oil was the fastest growing market in the Asia-Pacific region.
Agarwood Essential Oil Key Market Players & Competitive Insights
Leading market players are investing heavily in research and development in order to expand their product lines, which will help the agarwood essential oil market, grow even more. Market participants are also undertaking a variety of strategic activities to expand their footprint, with important market developments including new product launches, contractual agreements, mergers and acquisitions, higher investments, and collaboration with other organizations. To expand and survive in a more competitive and rising market climate, agarwood essential oil industry must offer cost-effective items.
Manufacturing locally to minimize operational costs is one of the key business tactics used by manufacturers in the agarwood essential oil industry to benefit clients and increase the market sector. In recent years, the agarwood essential oil industry has offered some of the most significant advantages to market. Major players in the agarwood essential oil market attempting to increase market demand by investing in research and development operations include Agro Products, ASSAM AROMAS, Grandawood, Biolandes, Deve Herbes, Essential Oil Wizardry, Katyani Exports, Jiâ an Zhongxiang Natural Plants Co., Ltd., Biofinest USA, Nusaroma, Dauper SA, Hoang Giang Agarwood Ltd., HYSSES Pte Ltd., Living Libations, Agarwood Oil Inc., Gritman Essential Oils, Pachara Innovation CO., LTD, The Imperial Oud Co, Edens Garden, and Essential Oils Company.
The Imperial Oud Company Limited, a functioning business with its registered office in Bradford, West Yorkshire, was established on September 30, 2016. The primary objective of Imperial Oud Co. is to completely satisfy its clients by offering them premium agarwood oil. The company has obtained numerous reputable international certificates from ISO, FDA, and other organisations for the efficacy of its products to attain the necessary quality in the production process.
The Essential Oils Company manufactures and sells essential oils, concretes, natural substances, solvent extracts, attars, and products crafted from Indian agarwood and sandalwood. In addition, it continues to expand its manufacturing area to meet the growing demand for wholesale pure natural oils. Its objective is to satisfy consumer needs and wants. Quality is always preserved as the most important factor and is vigorously upheld throughout production.
Key Companies in the agarwood essential oil market include
- Agro Products
- ASSAM AROMAS
- Grandawood
- Biolandes
- Deve Herbes
- Essential Oil Wizardry
- Katyani Exports
- Jiâ an Zhongxiang Natural Plants Co., Ltd.
- Biofinest USA
- Nusaroma
- Dauper SA
- Hoang Giang Agarwood Ltd.
- HYSSES Pte Ltd.
- Living Libations
- Agarwood Oil Inc.
- Gritman Essential Oils
- Pachara Innovation CO., LTD
- The Imperial Oud Co
- Edens Garden
- Essential Oils Company
Agarwood Essential Oil Industry Developments
February 2021: Myrissi was purchased by Givaudan. The purchase of Myrissi would benefit Givaudan's long-term Fragrance & Beauty strategy. Their A.I. knowledge would assist Givaudan in recommending novel organoleptic strategies to customers.
October 2020: To assist people in focusing on their unique health objectives, dôTERRA has unveiled several new essential oil products, diffusers, and wellness programs.
May 2020: Les Derives Résiniques et Terpeniques, a leader in the development and distribution of premium, organically derived ingredients, was acquired by Firmenich. With this acquisition, Firmenich would be positioned as a pioneer in renewable ingredients for cosmetics and other uses.
Agarwood Essential Oil Market Segmentation
Agarwood Essential Oil Type Outlook (USD Billion, 2018-2032)
- Compound Essential Oil
- Pure Essential Oil
Agarwood Essential Oil Raw Material Outlook (USD Billion, 2018-2032)
- Wood
- Flowers
- Bark
- Resin
Agarwood Essential Oil Application Outlook (USD Billion, 2018-2032)
- Food and Beverage Industry
- Cosmetics and Personal Care Industry
- Pharmaceutical Industry
Agarwood Essential Oil Sales Channel Outlook (USD Billion, 2018-2032)
- Specialty Drug Stores
- Supermarkets or Hypermarkets
- Convenience Shop
- E-Commerce
Agarwood Essential Oil Regional Outlook (USD Billion, 2018-2032)
- North America
- US
- Canada
- Europe
- Germany
- France
- UK
- Italy
- Spain
- Rest of Europe
- Asia-Pacific
- China
- Japan
- India
- Australia
- South Korea
- Australia
- Rest of Asia-Pacific
- Rest of the World
- Middle East
- Africa
- Latin America
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