Agarwood Oil Market

Agarwood Oil Market Growth Outlook (2023 to 2033)

Global demand for agarwood oil is predicted to rise at a CAGR of 6% from 2023 to 2033. Currently, the global agarwood oil market is valued at US$ 250 million and is this expected to hit a valuation of US$ 450 million by the end of 2033.

Agarwood is an endangered species that is protected under the Convention on Trade in Endangered Species of Wild Fauna and Flora. Agarwood is traded in a variety of forms, such as oil, chips, logs, and dust. Agarwood oil, also known as eaglewood oil and oud oil, is a resinous, aromatic, and highly precious essential oil extracted from the agarwood tree's heartwood after it becomes infested. Agarwood oil is also popularly known as aloeswood oil.

This oil is well-known for its numerous health advantages as well as its ability to treat a variety of physical and psychological issues. Since agarwood oil possesses transcending, purifying, warming, and balancing properties, it combines nicely with other essential oils such as sandalwood, rose, jasmine, and carnation. This oil is also utilized in the production of incense and perfumes.

Growing demand for aromatherapy is a significant driver of market growth. Aromatherapy is an alternative medical practice that boosts energy levels, relieves headaches, promotes sleep, accelerates healing, enhances digestion and circulation, lowers anxiety, improves cognitive function, and alleviates depression.

The worldwide market is projected to benefit from the widespread knowledge of the healing qualities of essential and aromatherapy oils. The use of essential oils and aromatherapy is expanding in the field of medical science, generating demand all around the world. The need for agarwood oil is growing due to increased consumer experimentation with unorthodox health problem-helping methods.

Agarwood oil is widely used in aromatherapy since it is considered to be a helpful treatment for asthma and other medical conditions. The ability to treat a variety of medical issues has made agarwood oil a popular option among consumers, and this growing popularity is projected to boost the sales of agarwood oil in the coming years. Many players are profiting from increasing acceptance of aromatherapy and developing essential oils specifically for aromatherapy practices.

• For example, Plant Therapy Essential Oils' new collection of limited-edition essential oils is branded Dear Mom. The product is intended to promote relaxation and reduce anxiety and stress in mothers. According to the business, the new product has a smooth, sweet aroma, promoting relaxation and calmness.

Report Attributes	Details
Market Size in 2023	US$ 250 Million
Projected Market Value (2033)	US$ 450 Million
Global Market Growth Rate (2023 to 2033)	6% CAGR
Asia Pacific Market Share (2022)	33.7%
Leading Nature Segment	Organic Agarwood Oil
Key Companies Profiled	Agro Products ASSAM AROMAS Grandawood Biolandes Deve Herbes Biofinest Nusaroma Dauper SA Hoang Giang Agarwood Ltd HYSSES Pte Ltd Pachara Innovation CO., LTD The Imperial Oud Co

Why is Agarwood Oil Exhibiting Steady Demand Growth?

“Strong Consumer Spending on Natural Products”

Consumption of agarwood oil has risen as people become more aware of the advantages of organic essential oils on the hair and skin. People in growing Asian Pacific nations such as India, China, and South Korea, among others, can now purchase cost-sensitive products such as agarwood oil due to rising consumer disposable income.

Agarwood oil is more than just an aromatic, sweet oil utilized in perfumery; it also has many phenomenal medicinal properties, such as providing both physical and emotional relief for insomnia, migraine, stress, burns, skin problems, insect bites, infections, and nervous tension. As a result of these features, the demand for agarwood oil is increasing.

Customers nowadays are increasingly demanding authentic oil products. As a result, the demand for authentic oil products is growing significantly. In response to customer demand and industry insights, manufacturers and suppliers of fragrance and incense goods are expanding their product offers.

Many producers are entering the essential oil market owing to large profit margins. Several producers intend to release agarwood oil products in the following years. Furthermore, competitors are expected to sell their products with natural labeling to attract existing customers and boost the number of new customers.

Which Factor Can Adversely Impact Market Growth?

“Easy Availability of Counterfeit Products”

The growing availability of counterfeit goods is a major concern for companies operating in the worldwide market. Agarwood essential oil is derived from plants via distillation and has a distinct fragrance and characteristics that reflect the plants from which they are extracted. On the flip side, counterfeit goods contain cheap seed oils and lack essential oil properties. Some counterfeit products are blended with synthetics to mimic the plant's scent.

Since agarwood oil is a high-priced oil, it is an ideal target for adulteration, resulting in the creation of counterfeit products. Such counterfeit goods harm the brand image of major essential oil companies. As a result, the rising number of counterfeit products may stymie the development of global market growth during the study period.

Country-wise Insights

Why are Agarwood Oil Sales Booming in India, Japan, and South Korea?

“Increasing Demand for Plant-based Aromatic Goods”

As per Fact.MR, a market research and competitive intelligence provider, Asia Pacific accounted for 33.7% of the global market for agarwood oil in 2022.

Asia Pacific is spearheading the global market due to the presence of several major producers of agarwood oil catering to the continuously increasing demand. Demand for agarwood oil is extremely high among the rapidly growing urban populace with increasing disposable incomes. Moreover, the rise of millennial customers and the growing usage of agarwood essential oil in aromatherapy diffusers are driving regional market growth.

Agarwood oil sales are increasing in countries such as India, Japan, and South Korea due to rising demand for plant-based aromatic goods.

What Makes Germany and the United Kingdom Europe's Top Markets for Agarwood Oil?

“Focus on Development of Agarwood Oil-infused Cosmetic Products”

Agarwood essential oil is in great demand in Europe due to its numerous health benefits and applications in a variety of sectors, including personal care, cosmetics, and therapeutics. Germany and the United Kingdom are among the top European marketplaces for agarwood oil. Cosmetic manufacturers in these countries are developing novel cosmetic products that include agarwood oil. Increasing demand for massage oils and aromatherapy products in Europe is also fuelling the growth of the regional market.

What Supporting United States Market Growth?

“Increasingly Popularity of Organic Agarwood Oil in the Country”

The North American market is steadily growing and is expected to grow during the forecast period. Organic agarwood oil is becoming increasingly popular in the United States. The increasing use of organic agarwood oil in massages and aromatherapies is boosting the market in the United States.

Category-wise Insights

Why is Organic Agarwood Oil Becoming More Popular?

“Useful in Wide Range of Applications”

The global market is significantly benefitting from the growing popularity of organic agarwood oil. Organic agarwood oil is being increasingly used in various applications such as personal care, cosmetics, therapeutics, medication, and household cleaning, which is propelling the global market.

Why is Agarwood Oil Extensively Used in Cosmetics and Personal Care Industry?

“Ever-growing Demand for Improved Health and Skincare Products”

The growing consumer knowledge of health and skincare has increased the demand for agarwood oil in the cosmetics and personal care industry. Due to its health advantages, agarwood oil is increasingly used for skin and hair treatment. These advantages have expanded the use of agarwood oil in the cosmetic and personal care industry. As a result, during the projection period, the rising demand for improved skincare will raise the usage of agarwood oil in the cosmetic and personal care industry.

Due to its high price, agarwood is known as "liquid gold." Furthermore, only certain specified and old agarwood plants include resin, making agarwood one of the world's finest cosmetic extracts.

Competitive Landscape: Start-up Scene Looks Promising

Key players in the agarwood oil market are actively exploring strategies such as investments, partnerships, R&D activities, and acquisitions to strengthen their market position and gain market share. Moreover, many start-ups are sprouting up in the global market.

DAdvance Agarwood Solutions, one of Malaysia's leading Biotech companies, raised a whopping US$ 1.9 million through an equity crowdfunding (ECF) effort conducted by Fundnel in June 2022. The funds raised will be used to speed up the research and development of its in-house inoculation technology, as well as to meet working capital requirements and support marketing activities to boost the general economic expansion of Malaysia's agarwood industry. The company is working with several Malaysian universities to enhance the agarwood oil distillation process and conduct research and development on agarwood skin care products.

Recently, the company solidified its position as the dominant player in the cultivated agarwood industry through the breakthrough of its pure oil quality by accomplishing exceptional results with a 94.76% reading of sesquiterpenoid and sesquiterpene, and free of diethyl phthalate, Dioctyl phthalate, and other contaminants, which adheres to the stringent standards of the European and United States fragrance industries. This had put the company's agarwood oil in a class of grade A plus by Bio Aromatik Research Centre, a research center that collaborates with big agarwood oil producers worldwide.

Key Segments in Agarwood Oil Industry Research

• By Nature :

  • Organic
  • Conventional

• By Application :

  • Cosmetics And Personal Care
  • Pharmaceuticals
  • Food and Beverages

• By Distribution Channel :

  • Specialty Drug Stores
  • Supermarkets/Hypermarkets
  • e-Commerce
  • Convenience Stores

• By Region :

  • North America
  • Latin America
  • Europe
  • Asia Pacific & China
  • Middle East & Africa