The Problem:

A client approached us to understand the potential of different aromatherapy products in the European Market. These products include Active Pharmaceutical Ingredients (APIs), essential oils, dry plant extracts, floral waters, and concrete & absolutes. The company was interested in tapping the European markets and acquiring a market share for these products.

The Solution:

To help the client better understand the business conditions, we conducted in-depth market research for each of the five product types mentioned above, which consisted of the following:

Market Size

Market Trend

Competitor Analysis

Customer Analysis SWOT Analysis PESTLE Analysis TAM, SAM & SOM

The market size and trends helped us understand how likely it is for a business to scale in this industry and, if so, at what rate we expect the sector to grow over time. The European Active Pharmaceutical Ingredients (API) Market is expected to account for around USD 87.5 Billion by 2028.

The Customer Analysis was a determinant in establishing what key customers in the market look for in an aromatherapy business. It gave us insights into the apprehensions, concerns, and pain points of the target audience. The increasing prevalence of various chronic disorders and the aging population in Europe are the major drivers that propelled the API market’s demand in the forecast period. Furthermore, consumers have become more conscious of their well-being. High-Quality products and competitive prices are the biggest needs of the market. Therefore, rising expenditure on research and development of the more effective product, processes, services, and technology are predicted to impact market growth.

The SWOT analysis looked closely into the strengths and weaknesses the business is likely to possess and the threats and opportunities the company is expected to face in the operating environment. The biggest drawback for the business is the concern of adulteration of essential oils. These adulterated essential oils do not possess the properties of essential oils and merely act as fragrance products. The coronavirus pandemic has boosted demand for essential oils with antibacterial properties and oils used in food production, supporting revenue in 2021. The use of modern research and development technologies in the herbal domain are opportunities for the growth of the plant extraction market. When entering the market, it should be considered that the declining supply of aromatic plants poses a greater risk to the plant-based volatile oil markets. The ever-rising and robust demand against constrained supply will create high price scenarios discouraging its utilization across different application sectors in developing countries.