The global aromatherapy market size was estimated at USD 1.6 billion in 2020 and is expected to expand at a compound annual growth rate (CAGR) of 11.6% from 2021 to 2028. Rising awareness about therapeutic uses of essential oils coupled with a growing preference for natural products is likely to drive the market over the forecast period.
Aromatherapy is considered as an alternative medicinal therapy that helps recover from various disorders, including pain, cardiovascular disorders, respiratory disorders, skin-related problems, cold and cough, digestion problems, immune system dysfunction, insomnia, anxiety, and wounds. Women are usually more concerned about acne scars, and people with acne-related problems often opt for therapeutic-grade essential oils.
The U.S. dominated the market for aromatherapy in 2020. Rising awareness about the advantages of alternative therapies is expected to drive the market for aromatherapy in the U.S. over the coming years. Moreover, favorable laws and regulations for essential oil farming are likely to propel the market growth in the country over the forecast period.
The target audience in the market for aromatherapy is commonly women, but it is also growing significantly among the millennials. This group of population is responsible for the changing trends in healing therapies. People are increasingly opting for natural therapies instead of man-made drugs. As a result of the changing trends in healing therapies, key companies are also undertaking new initiatives and developing new products.
Major players have undertaken an increasing number of initiatives in order to expand their geographic presence. These strategic developments have been beneficial for the companies as well as countries wherein new production facilities and offices have been set up. Untapped growth opportunities in developing economies coupled with increasing investments by market players in these regions are anticipated to boost demand for aromatherapy products.
Rising stress, anxiety, and depression among people caused by the containment measures to curb the spread of the COVID-19 outbreak are expected to augment the demand for various stress relief and relaxation therapies. Furthermore, the application of aromatherapy to provide relief against cough and cold is expected to impact the market positively since the primary symptoms of COVID-19 include cough, cold, and fever.
Product Insights
The consumables segment led the market for aromatherapy and accounted for 78.2% of the global revenue share in 2020, owing to the rising adoption of essential oils as therapeutic agents for various disease conditions. Consumables include essential oils and carrier oils. Blended essential oils are produced by mixing one or more single essential oils that interact chemically.
Essential oils are volatile organic oils, which are extracted from plants with the help of distillation. This procedure involves the use of water or steam for the extraction of oils from different parts of a plant, including leaves, petals, stems, roots, or bark. These oils have natural healing properties and help reduce stress, alleviate pain, and improve overall wellness. Therefore, essential oils are also considered alternative medicines.
The demand for equipment is estimated to witness a CAGR of 8.8% over the forecast period. The introduction of different types of diffusers has led to an increase in the preference for this equipment as they help gain therapeutic benefits from essential oils. Ultrasonic diffusers help disperse essential oils in the air by using water. Water and oil are mixed together to form a mist, which is circulated around the entire area and thus, can be inhaled indirectly.
Nebulizing diffusers, also called cold air diffusers, do not require heat or water to diffuse essential oils. These diffusers include components such as a nebulizer, base, and a lamp, which facilitate the dispersion of oil through pressurized air. Nebulizing diffusers provide rapid dispersion and are efficient in diffusing essential oils; however, they are ineffective in the case of thicker oils.
Mode of Delivery Insights
The topical application segment led the market for aromatherapy and accounted for a revenue share of 42.3% in 2020. Topical application helps achieve higher therapeutic properties. Some essential oils are used for various skin- and hair-related problems, including acne, and to improve skin tone. Other therapeutic benefits of topical aromatherapy comprise relief from acute pain or discomfort, cuts and bruises, and improving respiratory, immune, nervous system, and circulating systems.
Direct inhalation is expected to witness attractive growth over the forecast period due to its effectiveness in treating various respiratory disorders. Cold and cough, sinusitis and bronchial congestion, influenza, and sore throat are some of the medical conditions that require direct inhalation of essential oils. The rising preference of people towards natural products has increased the demand for such modes of treatment, making them a substitute for pharmaceutical drugs.
The aerial diffusion segment is anticipated to witness growth at an estimated CAGR of 11.7% over the forecast period. The preference for aerial diffusion is increasing with the growing demand for diffusers for aromatherapy. There are different methods of aerial diffusion, include steam diffusion, candle diffusion, heat diffusion, evaporative diffusion, and nebulizing diffusion.
The adoption of aerial diffusion mode of delivery for aromatherapy through heat diffusers, nebulizer diffusers, ultrasonic diffusers, and evaporative oil diffusers is expected to increase amidst the COVID-19 outbreak. The ability of candle diffusers, atomizers, and ultrasonic diffusers to provide relaxation, energy enhancement, and relief from anxiety and stress is anticipated to have a positive impact on the demand for aerial diffusion.
Application Insights
The relaxation segment led the market for aromatherapy and accounted for 23.2% of the revenue share in 2020, attributed to the rising number of people suffering from anxiety. Aromatherapy oils are effective in relaxing people, which balances the overactive mental state of the consumers. Stress management is also a huge concern for people. The inclination towards natural treatment has led people to opt for such products to get relief from stress.
Rising incidences of skin conditions are likely to drive the demand for aromatherapy products. People with skin rashes often seek aromatherapy, which helps in nourishing the skin and reducing inflammation. People do not always prefer synthetic products due to their adverse effects. Essential and carrier oils possess antifungal, antibacterial, and antiseptic properties, which help treat various skin and hair conditions.
The demand for aromatherapy in scar management is likely to witness a CAGR of 9.3% over the forecast period. Burn injuries leave noticeable hypertrophic burn scars, which remain even after the pain has subsided. Moreover, stitches after surgeries also lead to scars. Aromatherapy oils help reduce scars caused due to surgery or accidents, which may take a longer time to heal. Essential oils help in healing wounds, thereby assisting in reducing scars.
Other applications of aromatherapy include improving digestion and treating cardiovascular disorders, respiratory problems, and gastrointestinal infections. Moreover, they also help maintain proper liver and gallbladder functions, prevent motion sickness, weight management, and treat nervous disorders. Among the aforementioned applications, aromatherapy oils are most commonly used in treating digestive and respiratory problems.
Distribution Channel Insights
The Direct-to-Consumer (DTC) segment led the market for aromatherapy and accounted for 66.7% of the global revenue share in 2020. Direct-to-customer involves multilevel marketing of aromatherapy products and includes the retail as well as the e-commerce segments. Factors such as ease-of-buying and the availability of products for smelling before purchase are likely to drive the retail segment growth.
Enhanced understanding and better knowhow of products are anticipated to drive aromatherapy demand through the retail segment. The availability of essential oils at retail stores such as Target and Walmart enables consumers to choose between various products according to their tastes. Moreover, instances wherein doctors prescribe patients with essential oils typically require patients to visit retail outlets to purchase products, thereby augmenting segment growth.
Rapid growth in the e-commerce sector has positively impacted market growth by facilitating consumers to buy products at their convenience. Manufacturers and other online retailers typically offer products at a discounted rate on their websites to boost sales. The ease of buying and availability of a wide range of products significantly affects the segment growth.
The Business-to-Business (B2B) distribution channel segment is likely to witness a CAGR of 10.9% over the forecast period. The B2B segment includes the transactions between manufacturers selling aromatherapy products and different entities such as commercial organizations. These companies include pharmaceutical companies, wholesalers, and hospitals and clinics.
End-use Insights
The home use segment led the aromatherapy market and accounted for the largest revenue share of 40.0% in 2020. Aromatherapy is preferred over other forms of therapeutic treatments owing to its non-invasive characteristic. Thus, most patients prescribed with essential oils for diseases tend to use aromatherapy products in the vicinity of their homes. Hospitals and clinics are also the key end-users of aromatherapy owing to its ability to induce improved blood circulation; reduce nausea, anxiety, and stress; ease digestion; and aid in speedy recovery. As it is a non-invasive technique, hospitals are adopting aromatherapy to aid patient healing. Thus, a large number of clinics and hospitals are using essential oils to aid in postoperative recovery.
The demand for aromatherapy in yoga and meditation centers is expected to witness a CAGR of 10.0% over the forecast period. Essential oils are used in yoga and meditation centers in order to induce calming and soothing effects. Moreover, aromatherapy reduces anxiety and stress and provides a relaxing environment for meditation.
Aromatherapy is used in spa and wellness centers for relaxation and stress relief as well as to promote stimulation of circulatory, lymphatic, and musculoskeletal systems, thereby enhancing immunity. Aromatherapy is also used for quick healing processes and recovery. Thus, increased adoption of aromatherapy in spas and wellness centers is expected to boost market growth over the forecast period.
Regional Insights
North America dominated the market and accounted for 42.3% of the global revenue share in 2020, owing to the presence of a well-established healthcare system and high healthcare spending in developed countries such as the U.S. and Canada. Moreover, rising awareness pertaining to the benefits of alternative therapies is also expected to aid the regional market growth over the forecast period. The increasing popularity of aromatherapy as an alternative for therapeutics and pharmaceuticals is expected to drive market growth in Europe. European countries, including Germany, the U.K., Belgium, the Netherlands, and Ireland are the major markets for essential oils. As Europe is one of the largest traders in essential oils and has a high prevalence of chronic pain and depression, the demand for aromatherapy oils is high among the European population.
In Asia Pacific, the market is anticipated to witness a CAGR of 13.8% over the forecast period. Several countries in the region are developing and display faster adoption of new trends and innovations. Lucrative trading opportunities for essential oils in countries such as China and Japan, coupled with a rise in the prevalence of various disorders, have resulted in high growth of the market in the region.
The market in UAE is likely to expand on account of the growing popularity of aromatherapy, abundant raw materials, and rising consumer interest in natural fragrances and related products. Innovative isolates derived from existing essential oils of varied compositions are anticipated to provide numerous growth opportunities for companies in the country.
