That data, from the Nutrition Business Journal EO Special Report 2016, shows the market is booming, but there is more to this story than numbers.
It’s no secret that direct or multi-level-marketers like dōTerra, Young Living, and Melaleuca play a significant role in this growth, as MLM’s account for 85% of the $1.6bn EO market. The second largest segment is the natural channel, accounting for 12%.
It should be noted that the Nutrition Business Journal (NBJ) defines the essential oil business as a subgroup of the supplement category for this report; they have excluded bath and beauty products that contain essential oils, even those with therapeutic concentrations. Therefore, the report focuses on what NBJ considers the purchase of essential oils with the intention of treating conditions.
Tracking the essential oil market in its entirety is indeed a daunting task, as it could include countless personal care, home fragrance, air care, and other consumer products. So the $1.6bn figure is only a starting point from which to examine this emerging and enigmatic market.
Essential oils for wellness and wellbeing
If we examine the dramatic increase of essential oil use for aromatherapy purposes, the reasons are many. When I asked Susan Griffin-Black, co-founder and co-CEO of EO Products for insights on this topic she explained: “Consumers are turning towards natural products and products made with natural scents more than ever. There is a trend toward healthy self-care as a component of both wellness and wellbeing. Essential oils serve two purposes in this changing landscape: they replace harmful synthetic scents and they have the ability to improve our wellbeing through our moods.”
Blends versus individual oils
We also discussed the likely growth of targeted aromatherapy blends (NBJ projects this niche to become 19% of the EO market by 2020). “We have both synergistic, targeted blends and single oils in our Everyone line of aromatherapy,” explains Griffin-Black. The company’s top-selling oils in the mass market (at retailers like Target) are mostly blends with descriptive product names such as Relax, Calm, and Uplift. The single note of Lavender also does well in this space, according to Griffin-Black.
In natural markets like Whole Foods, EO Products is moving more single notes (Lavender, Eucalyptus, and Peppermint) and the Relax Blend. Overall she sees that, “people want to get the benefits of aromatherapy, but not everyone has the time to research, blend and test oils to see which work best,” The takeaway: EO blends seem to be what most consumers have time for these days.
Who are the new consumers?
While it makes sense that baby boomers are most likely the ‘original’ essential oil consumers, the 45% of EO consumers that the NBJ report indicates have begun buying oils relatively recently, raise the question of demographics.
Marketers, perhaps out of habit now, are looking to millennials. But anecdotal evidence from industry professionals and some of the data gathered by firms like YPulse suggests that this inclination could be correct. (YPulse is a market research company focused on millennials and Gen Z that provides insights, data, and reports to brands looking to understand today’s young consumers.)
I checked in with MaryLeigh Bliss, the chief content officer at YPulse, and she pointed out that 57% of 13 – 34 year olds say they constantly feel stressed.
“We’re seeing an increase in interest around activities and experiences that allow them to escape that stress and clear their minds, like breathing exercises and mindfulness,” says Bliss. “About half say that they currently do activities to improve / maintain their mental health, and 60% say that they put aside time to de-stress—and aromatherapy and essential oils could be a part of that for some.”
So baby boomers came of age appreciating EOs and millennials are stressed out, but that’s not the whole answer.
New EO consumers are coming from everywhere. “Because of the wide appeal of our products, we tend to focus on psychographics rather than demographics,” explains Griffin-Black, adding that “the group of people that is driving our sales are health conscious, curious, and interested in a better way to do the things they love.”
One thing these new consumers do seem to have in common is a passion for wellness.
The availability and accessibility of inexpensive essential oil diffusers for DIY aromatherapy (price points, for instance, start as low as $5 for EO Products retail versions) is one of the easiest ways to experience EOs. Social media sharing about blending and the plethora of information available about the benefits of aromatherapy are also contributing factors to this recent phenomenon—and opportunity.
That said, all this demand has the potential to put a strain on the supply chain. And then there are matters like purity and lack of industry-wide standards for EOs, which opens the door for adulteration and misinformation about quality. To say the least, the essential oil market is dynamic—and in flux.
Lisa Wilson, owner of fragrance advisory firm Scent&Strategy, develops fragrances for all categories. Her 25+ years of experience include advertising, consumer products marketing, multi-platform strategic fragrance development, and natural fragrances. Her work has won numerous industry awards.