Botanical Extracts Market Size, Share & Industry Analysis, By Source (Spices, Herbs, Flowers, Leaves, and Others), By Technology (CO2 Extraction, Solvent Extraction, Steam Distillation, Enfleurage, and Others), By Application (Food & Beverages, Pharmaceutical and Nutraceutical, and Cosmetics), and Regional Forecast, 2024-2032

The global botanical extracts market size was USD 5.85 billion in 2023 and is expected to grow from USD 6.34 billion in 2024 to USD 13.27 billion by 2032 at a CAGR of 9.67% during the forecast period (2024-2032). Europe dominated the botanical extracts market with a market share of 33.16% in 2023. Moreover, the botanical extracts market size in the U.S. is projected to grow significantly, reaching an estimated value of USD 2.91 billion by 2032, driven by increasing demand for functional beverages and growing awareness regarding the health benefits of botanical ingredients.

The demand for botanical extract is anticipated to witness a strong gain over the forecast period on account of their numerous related health benefits and their ability to work as an alternative to modern medicine. Growing demand for convenience food, rising awareness concerning the benefits of herbal products over synthetic products, and increasing demand from food and other applications are significant factors anticipated to boost the product demand.

The product demand was slightly impacted in 2020 after the COVID-19 outbreak. This is due to the slowdown of the cosmetics industry in the region that uses botanical extracts as an ingredient. The sales of cosmetics, such as face creams, lotions, and other skincare products, declined during the end of the first quarter of 2020 due to shift in consumer behavior toward beauty products as non-essential products during the pandemic. However, growing demand for botanical-based dietary supplements, particularly immunity-boosting herbal supplements and strong growth of packaged food products amid pandemic is likely to favor the botanical extracts market growth.

Botanical Extracts Market Trends

Growth of Clean Label Trend in Food & Beverages Market

The demand for clean-label foods and beverages with simple, clean, and organic ingredients has surged in recent years as consumers have become more conscious about what they are consuming. Clean label is a trend accelerating innovation across all consumer-packaged goods (C.P.G.) categories. The growth in clean-label product launches surged consumer demand for clean-label food products to propel the consumption of clean-label ingredients and health issues related to synthetic food additives and food safety incidents. For instance, in November 2022, Duas Rodas Industrial, one of the leading manufacturers of aromas and ingredients for the food and beverage industry, launched an Acerola extract for the food supplement industry. The new product, called Vitamin-Ace™ 40, has a standardized 40% natural vitamin C content and meets the strong demand for clean-label products.

Botanical Extracts Market Growth Factors

Rising Demand for Convenience Products

The global demand for convenience food products such as bakery & confectionery, sauces & dressings, ready meals, ready-to-drink (RTD) beverages, and sports & energy beverages has been rapidly increasing for the past several years. This growth can be mainly attributed to changing lifestyle of consumers, increasing population of working women, introduction of food products in attractive packaging by food processing companies, increased penetration of brick & mortar and online retail networks, and rise in disposable incomes, especially in emerging countries such as India, China, Brazil, and others. In convenience food products, botanical ingredients are commonly added to impart fragrance, flavor, and nutritional properties. Botanical extracts offer concentrated taste and longer shelf life and thus, convenience food & beverages manufacturers prefer botanical ingredients in extracts or concentrates rather than fresh botanicals. In addition, botanical ingredients impart an authentic taste as they are derived directly from plants, usually from the leaves, flowers, or fruits compared with non-botanical extracts. Therefore, increasing consumption of convenience food products is likely to fuel the demand for botanical extracts in the coming years.

Expanding Supplements Industry to Fuel the Market Growth

The global dietary supplements industry has expanded rapidly over the past several years. Changing lifestyles, rising health concerns, increasing healthcare costs, and a growing preference for a fit and active lifestyle are some of the key factors surging the demand for various dietary supplements, including vitamins, minerals, multivitamins, protein & amino acids, fibers & specialty carbohydrates. Extracts of different botanicals, including aloe vera, bitter orange, green tea, black tea, ginseng, and turmeric, are utilized to prepare dietary supplements associated with aromatherapy, cognition energy, immune system, joint health, obesity, anxiety, and vascular system. Manufacturers are thus launching innovative products to meet the demand. For instance, in November 2023, Koninklijke D.S.M. N.V., a Dutch multinational corporation, partnered with Italian botanical extract manufacturer Indena to develop next-generation botanical solutions for dietary supplements. Therefore, the expanding nutraceuticals industry is expected to fuel the demand for botanical ingredients.

RESTRAINING FACTORS

Fluctuations of Raw Material Prices

Raw materials, including tea leaves, ginseng roots, turmeric, and others are procured by botanical ingredients manufacturers to produce respective extracts and concentrate. Raw materials are cultivated worldwide as different agricultural produce demands varied climatic conditions. Besides, raw materials are an agricultural commodity; therefore, these are extensively utilized in other industries, including food & beverages, animal feed, and others. Therefore, on account of climatic conditions, varied demand from other application industries, economic conditions, and trade relations, raw materials' prices fluctuate frequently. This results in disruption in the cost structure and profit margin of botanical ingredients manufacturers and presents challenges to the market.

Botanical Extracts Market Segmentation Analysis

By Source Analysis

Leaves Sector to hold Significant Botanical Extracts Market Share Owing to Increasing Concern Over Obesity Disorders

Leaves are expected to hold a substantial market share over the forecast period. Leaves are any flattened green outgrowth from the stem of a vascular plant. The primary function of a leaf is to yield food for the plant by photosynthesis. Chlorophyll is the substance that gives plants their characteristics such as green color and helps absorb light. Botanically, leaves are an essential part of the stem system. A constant vascular system attaches them to the rest of the plant to allow the free exchange of water, nutrients, and end products of photosynthesis such as carbohydrates and oxygen. The segment has been experiencing new product launches and expected to have significant growth in the future. For instance, in April 2021, CosmaxBio, a South Korean company, developed a new ingredient based on Hydrangea serrata leaf extract. The new product helps improve skin health and helps with weight management.

Herbs are the leafy part of a plant, used in a wide variety of applications such as dietary supplements, food & beverage, cosmetics, and pharmaceuticals. The herbs segment is expected to drive the growth of this market on account of their extensive utilization in traditional medicines. Herb-based medicinal products are attaining significance globally due to their health benefits such as stabilizing hormones, metabolism, strengthening the immune system, and are more reasonably priced than conventional medicines.

By Technology Analysis

CO² Extraction Sector to hold Largest Market Share, Owing to Widely Used in Applications

CO² extracts, commonly known as supercritical CO² extracts, are highly pure plant extracts produced from a moderately high and new efficient extraction process. The CO² extraction process has superior herbal extracts widely utilized in botanical medicine and food to flavor several products such as soft drinks, bakery and confectionery, and dairy products. Besides its uses in food and herbal medicine, CO² extract is used in pharmaceutical, dietary supplements, and oral care products. CO² extracts are sourced from various sources such as vegetables, fruits, herbs & spices, and other plant parts such as roots and leaves. CO² extract is a natural flavor extract and is getting traction from consumers.

By Application Analysis

Food and Beverage Sector to hold Largest Market Share Owing to its Wide Utility in Varied Applications

Botanical extracts are increasingly being incorporated into various food & beverage applications such as bakery, dairy, energy drinks, and confectionery products owing to their unique flavor and health benefits. Botanical ingredients contain polyphenols, which are vital elements in preventing cardiovascular and neoplastic diseases. Health-conscious consumers are getting inclined toward food products with high nutritional content. Thus, food & beverages manufacturers focus on fortifying food products with a clean label (natural and recognizable ingredients) and nutritious plant-based ingredients such as tea extracts.

REGIONAL INSIGHTS

Europe to Exhibit Highest Market Share On Account of Rising Awareness Regarding the Consumption of Nutritional Products

The Europe botanical extracts market is anticipated to progress at a growth rate of 8.3% over the forecast period. This is due to the increasing product demand in beverages and the rising demand for ready-to-drink (RTD) beverages among the population in the region. The growth of the beverage sector is driven by rising demand for RTD beverages as consumers' preference has been shifting from carbonated drinks to those that contain healthy, plant-based ingredients such as tea, kombucha, and matcha.

Asia Pacific is expected to witness the highest growth, in terms of value, from 2024 to 2032 in the global botanical ingredients market. Factors, such as the penetration of organized and e-commerce retail, are driving the consumption of convenience food products, including ready meals, RTD beverages, packaged snacks, and other products, wherein botanical ingredients are incorporated to impart flavor, fragrance, and functional properties.

Beverages are critical application type of botanical extracts in North America, owing to the increasing demand for functional beverages. This is due to growing awareness regarding the health benefits associated with the use of bio-based ingredients for weight loss and regulation of blood sugar.

List of Key Companies in Botanical Extracts Market

Companies Focus on Expanding their Production Capacity to Meet the Global Demand

This market is consolidated, owing to the presence of a limited number of established and regional players. Key companies, such as International Flavors & Fragrances Inc., Kalsec Inc., Dohler GmbH., and Nexira, are the prominent players in this market. These key players are focusing on the increase of their production capacity to meet the global demand.

LIST OF KEY COMPANIES PROFILED

• International Flavors & Fragrances (New York, U.S.)


• Kalsec Inc. (Michigan, U.S.)


• Dohler GmbH (Darmstadt, Germany)


• Nexira (New Jersey, U.S.)


• Haldin Natural (Jakarta, Indonesia)


• Synthite Industries (Kochi, India)


• MB-Holding GmbH & Co. K.G. (Bayern, Germany)


• Synergy Flavors (Illinois, U.S.)


• Blue Sky Botanics (Ross-on-Wye, U.K.)


• Fytosan (Die, France)

KEY INDUSTRY DEVELOPMENTS

• March 2024: Native Extracts, one of the leading Australian Phyto-tech company, partnered with Heyi Commercial Group (Heyi), a technology-based trading company. The partnership would mark a significant expansion of natural ingredients, such as botanical extracts, in China.


• October 2022: Pharmactive Biotech Products, S.L.U., an ingredient supplier, launched a damiana (Turnera diffusa) extract under the brand Liboost. The new product is developed to enhance sexual function in men and women.


• March 2022: Ilesol Pharmaceuticals, an industrial-scale producer of CBD intermediates, announced the launch of a new range of botanical extracts. The new product range features a variety of natural plant-based ingredients and offers a sustainable, natural, and effective way to support overall health and well-being.


• October 2021: Evonik Industries AG, a publicly-listed German specialty chemicals company, acquired Botanica, a Swiss plant extract producer. The acquisition would help Evonik strengthen its broad portfolio of botanical extracts in Europe.


• February 2021: Nexira, a global supplier of botanical extracts and natural ingredients, acquired Unipektin Ingredients AG, a specialist in natural hydrocolloids and premium ingredients. Unipektin manufactures locust bean gum, which is used for its stabilizing thickening properties. Its product portfolio also includes specialty ingredients such as specific hydrolyzed guar gum and beet fiber grades.

REPORT COVERAGE

The research report provides qualitative and quantitative insights into the market. It also offers a detailed analysis of the market size and growth rate for all possible segments in the market. Various key insights presented in the report are an overview of related markets, recent industry developments, such as mergers & acquisitions, the regulatory scenario in critical countries, and key industry trends.

Report Scope & Segmentation