The botanicals market involves cultivation, extraction, and formulation of botanical ingredients derived from various plants and plant parts, including flowers, bark, leaves, and roots. Key botanical extracts comprise echinacea, ginger, turmeric, garlic, ginseng, skullcap, feverfew, and chamomile, which are used extensively in dietary supplements, functional foods & beverages, personal care products and other healthcare applications due to their medicinal properties and health benefits.
The Global Botanicals Market is estimated to be valued at USD 112.31 Billion in 2024 and is expected to reach USD 174.10 Billion by 2031, growing at a compound annual growth rate (CAGR) of 6.5% from 2024 to 2031.
Key Takeaways
Key players operating in the botanicals market include Archer Daniels Midland Company, PT Indesso Aroma, Lipoid Kosmetik AG, Sabinsa Corporation, Nutra Green Biotechnology Co.,Ltd, Organic Herb Inc., Plant Extracts International Inc., Martin Bauer Group, Kalsec Inc., and Synthite Industries Private Ltd.
Rapidly growing demand for natural & organic products and rising popularity of traditional medicines and herbal remedies are major factors fueling the Botanicals Market growth. Increasing focus on preventive healthcare owing to rising chronic diseases is also driving the sales of botanical supplements amongst consumers.
Technological advancements in processing and extraction methods such as supercritical fluid extraction are helping maximize retention of bioactive compounds of botanicals and production of standardized herbal extracts. This is enabling manufacturers to precisely reproduce ingredients and formulations.
Market Trends
Growing demand for customized herbal extracts - With increasing awareness, consumers are looking for herbal extracts tailored to their specific healthcare needs. This is prompting manufacturers to offer varied concentrations and multifunctional botanical blends.
Focus on sustainability and eco-labeling - Companies are investing in sustainable sourcing and cultivation practices to meet rising demand for organic and environment-friendly botanical products from conscious consumers. Eco-labels help differentiate such offerings.
Market Opportunities
Asia Pacific offers high growth potential - Emerging markets in Asia Pacific driven by growing health-conscious middle class present lucrative opportunities for botanical market players.
Innovation in delivery formats - Developing innovative delivery systems such as herbal teas, juices, functional waters and snacks infused with customized botanical blends can open up new revenue streams.
Impact of COVID-19 on Botanicals Market Growth:
The outbreak of COVID-19 pandemic significantly impacted the botanicals market globally. During the initial lockdown phases, the demand from key end-use industries such as food and beverages, personal care, and pharmaceuticals witnessed a steep decline. Disruptions in supply chains further aggravated the situation. There was shortage of labor and transportation bottlenecks affected the production and distribution of botanical extracts. However, with time as people started spending more on health and immunity products, the demand for botanical ingredients regained momentum. As research proved many botanicals have antiviral and antioxidant properties that help fight infections, their consumption increased rapidly.
Manufacturers beefed up their production capacities and distribution networks to cater to the growing needs. New application areas were also explored. Many herbal formulations claiming to provide relief from COVID symptoms were launched. This offered partial respite to the market from pandemic induced slump. Gradually as restrictions were lifted and economic activities restored, the demand from food and beverage players also bounced back. Those relying on e-commerce for sales managed to strike deals with various online retailers ensuring steady revenues.
North America leads the botanicals market in terms of value owing to robust demand from the developed F&B and pharmaceutical sectors. Changing consumer preferences towards natural and plant-based ingredients provide an impetus to market growth. The region is one of the early technology adopters with presence of many innovators developing novel herbal products. Also, conducive regulatory environment and focus on R&D promote the use of botanical extracts. Asia Pacific exhibits fastest growth and is emerging as a key producer & consumer globally. Rising health consciousness, growing disposable incomes, and expansion of end-use industries accelerate sales.
The East African region stands out as a fast developing hotspot for the botanicals market due to conducive climate and abundance of biodiversity. Countries like Ethiopia, Kenya and Tanzania have ideal agro-climatic conditions for cultivation of high value plants. With support from government initiatives and international collaborations, the production of herbal raw materials in the region has increased manifold. This offers lucrative export opportunities and helps local farmers earn sustainable livelihood. Moreover, traditional usage of botanicals in African herbal medicines attracts huge domestic demand as well modern applications.
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