The Herbal Extract Market to Flourish at 7.0% CAGR owing to Increasing Demand for Natural Ingredients
Herbal extracts are concentrated plant materials made by extracting the powdered or pieces of herbs with solvents like water, ethanol or glycerin. They contain dense concentrations of herbal compounds and are commonly used as dietary supplements, cosmetic ingredients and flavors. Herbal extracts contain essential oils, fatty acids, flavonoids, saponins, alkaloids and other compounds that provide numerous health benefits like anti-aging, antioxidants, anti-inflammatory etc. Rising awareness about efficacy of herbal extracts over synthetic compounds and shift towards natural ingredients are driving the growth of the global herbal extract market.
The Global Herbal Extract Market is estimated to be valued at US$ 41.8 billion in 2024 and is expected to exhibit a CAGR of 7.0% over the forecast period 2024 to 2031.
Key Takeaways
Key players operating in the herbal extract market are Botanic Healthcare, VIDYA HERBS Pvt. Ltd, Allicin Pharm, HerbalHills, Acara bioherb PVt. LTD., Pioneer Enterprises (I) Private Limited, Sydler India Pvt. Ltd, Herbal Creations, Alpspure Lifesciences Private Limited, IDOBIO CO., LTD., Döhler GMBH, MartinBauer. Rising geriatric population, growing preference for herbal supplements and natural ingredients are fueling the demand for herbal extracts globally. Technological advancements like supercritical carbon dioxide extraction method are helping manufacturers produce herbal extracts with concentrated active ingredients in a sustainable way.
Market Trends
Standardization of herbal extracts: Regulatory bodies standardizing specifications for Herbal Extract Market Demand to maintain product quality and efficacy is a key trend. For example, WHO guidelines for quality standardization of 11 commonly used medicinal plant extracts.
Innovation in delivery formats: Manufacturers are innovating delivery formats of herbal extracts like emulsions, nanoparticles, liposomes etc. to improve bioavailability and targeted delivery.
Market Opportunities
Personalization of herbal extracts: Growing need for herbal supplements tailored to individual requirements offers opportunities. Developing personalized herbal extracts based on genomics, lifestyle and other factors can boost market demand.
Untapped regional markets: Emerging markets in Asia, Africa and South America with traditional use of medicinal plants offer significant opportunities for herbal extract companies.
The COVID-19 pandemic has significantly impacted the growth of the herbal extract market globally. During the initial outbreak, both supply and demand were affected as lockdowns resulted in disrupted supply chains while consumer demand decreased significantly due to reduced spending. However, research demonstrating the antiviral properties of some herbal extracts saw a resurgence in demand for such products. Consumer preference also shifted towards natural immunity boosters and herbal remedies to prevent infection. Many herbal extract formulating companies expanded their product offerings to include formulations for boosting immunity. Post COVID, the market is witnessing renewed growth drivers such as increasing consumer awareness about nutrition, health and wellness. Awareness about the importance of preventive healthcare through functional foods and herbal extracts has increased substantially. Considering the long term opportunities, manufacturers are investing in R&D to identify new application areas and seeking regulatory clearances in different geographies. Partnerships with research institutes are also facilitating clinical validation of herbal extracts.
Europe has traditionally been the largest and most concentrated market for herbal extracts globally in terms of value. Countries like Germany have a long history of herbal medicine usage and major herbal extract manufacturers are located here. Easy availability of quality raw materials from various regions and established distribution networks have supported the European market growth. However, Asia Pacific is emerging as the fastest growing regional market for herbal extracts. Countries like India, China and Japan have a rich legacy of Ayurveda and traditional Chinese medicine contributing to a cultural acceptance of herbal remedies. Lower raw material and manufacturing costs provide competitive advantages. Asia Pacific is witnessing increased indigenous production as well as export opportunities with global companies setting up manufacturing bases in countries like India to cater to both domestic and international demand.
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