Herbal Extract Market

Market Overview

The global herbal extract market size was estimated to be valued at USD 28.47 billion in 2022. It is estimated to reach USD 51.38 billion by 2031, growing at a CAGR of 6.78% during the forecast period (2023–2031). The surging demand for environmentally friendly and sustainable products drives the global herbal extract market. Moreover, the end-user of the market is launching novel products incorporating herbal extracts from different plants, which is anticipated to drive the growth of the global market.

Herbal extracts are highly concentrated versions of herbal substances obtained by extracting active plant ingredients using different solvents or processes. These extracts are used for medical, nutritional, or cosmetic functions and frequently contain the vital constituents accountable for the plant's therapeutic capabilities.

Herbal extracts are available in diverse formats, including tinctures, oils, capsules, powders, or teas. They enjoy widespread popularity in traditional medicine, herbalism, and alternative health practices. Notable herbal extracts include echinacea, ginkgo biloba, garlic, turmeric, and more. It is crucial to acknowledge that herbal extracts may provide possible health advantages, but their effectiveness and safety can differ. It is recommended to seek advice from a healthcare expert before using them, particularly if one has a pre-existing health concern or is using drugs.

Market Dynamics

Global Market Drivers

Growing Demand for Sustainable Products

The rising consumer selection for natural and organic products significantly contributes to expanding the herbal extract market. Consumers increasingly recognize the detrimental impact of synthetic chemicals and artificial additives on their well-being and the ecosystem. Due to their sustainability and eco-friendliness, they favor herbal extracts over synthetic counterparts for various purposes, including skincare, haircare, healthcare, and wellness.

As per Forbes, up until 2020, a mere 58% of consumers from all age groups expressed their willingness to pay a higher price for sustainable choices. In 2022, about 90% of Generation X customers expressed their desire to allocate an additional 10% or higher budget for sustainable items, in contrast to a little over 34% reported two years prior. The inclination of Gen X consumers to support sustainable products has risen by over 25%, while their readiness to spend more on sustainable items has surged by 42%. Therefore, all of these factors lead to the overall expansion of the global market.

Launch of Herbal Products

The market participants from several end-user sectors of herbal extract are launching novel herbal products. For instance, in July 2023, Craft Methods intended to introduce their newest product, D'General Bitters, a high-quality alcoholic beverage infused with water, honey, citrus, alcohol, and natural herbal extracts. Skilled professionals meticulously craft this exquisite blend in their state-of-the-art facility. D'General is a sophisticated alcoholic beverage designed for individuals who desire a refined taste and prioritize a healthy lifestyle.

Similarly, in June 2020, Aura Bora, a San Francisco-based herbal beverage brand, introduced a range of sparkling waters flavored with fruits and herbs. The initial selection has five options: Cactus Rose, Lavender Cucumber, Peppermint Watermelon, Basil Berry, and Lemongrass Coconut. Aura Bora is devoid of sugar, calories, and salt. Every plant-based option uses non-GMO ingredients to provide a refined and enhanced sparkling water experience. These products stimulate the demand for herbal extract due to their utilization in product formulations, consequently propelling the growth of the global market.

Global Market Restraint

Lack of Regulations

The lack of uniformity and oversight in the herbal extract sector is a significant obstacle impeding market expansion. Herbal extracts lack standardized quality control and safety evaluation protocols across various areas and countries. As a result, there are inconsistencies in the purity, strength, and effectiveness of herbal extracts, which might impact their performance and safety. Moreover, certain herbal extracts may have impurities, additives, or substances that can trigger negative responses or interfere with the effects of other medications. Hence, consumers and manufacturers encounter ambiguity and potential hazards when utilizing and manufacturing herbal extracts.

Global Market Opportunities

Increasing Research and Development

The increasing research and development initiatives in herbal extracts are creating fresh opportunities for market expansion. Multiple research institutes, universities, and organizations are currently conducting studies investigating the potential of herbal extracts in treating diverse diseases and disorders. For instance, in August 2023, scientists from Hong Kong Baptist University (HKBU) discovered that isoliquiritigenin (ISL), a flavonoid derived from licorice, can impede the advancement of pancreatic cancer. It can also improve the effectiveness of traditional chemotherapy medications in treating pancreatic cancer.

Additionally, in October 2023, researchers from the NICM Health Research Institute of Western Sydney University conducted clinical trials to investigate the impact of an herbal extract on moderate cognitive impairment (MCI). The findings revealed that the herbal extract significantly enhanced participants' memory within less than three months. Sailuotong (SLT) is a botanical formulation that consists of standardized extracts derived from Panax ginseng, Ginkgo biloba, and Crocus sativus L. Therefore, these aspects are projected to create opportunities for market growth.

Regional Analysis

Based on region, the global herbal extract market is bifurcated into North America, Europe, Asia-Pacific, Latin America, and the Middle East and Africa.

Asia-Pacific Dominates the Global Market

Asia-Pacific is the most significant global herbal extract market shareholder and is expected to expand substantially during the forecast period. The market in this region is experiencing significant growth due to the abundant production and consumption of herbal extracts, the presence of diverse flora and fauna that offer numerous sources of herbal extracts, and the deep-rooted tradition and culture of utilizing herbal extracts in various medicinal practices like Ayurveda and TCM. Ayurveda and TCM are traditional medical systems that employ herbal extracts as the primary constituents of their therapeutic interventions. Their holistic approach, natural origin, and proven efficacy have gained recognition and acceptance in the global market. Moreover, the industry participants in the region are also offering novel herbal extracts to flourish in the fiercely competitive environment. For instance, in June 2021, Durmeric, a Mumbai-based business specializing in ayurvedic products, provided liquified herbal extracts with greater absorption and increased efficacy. The firm presently provides a selection of 10 items derived from common herbs, including cinnamon, tulsi, rosemary, and ginger.

Furthermore, there has been a significant increase in the investigation of herbal extracts, resulting in innovative goods. For instance, the Defence Institute of Advanced Technology (DIAT), based in Pune, successfully developed a cotton mask infused with herbal extract during the height of the COVID-19 pandemic in July 2020. This mask has been proven to function as a "virus-neutralizer" and effectively repels harmful germs. The non-woven nano-fiber of this three-layered biodegradable mask, called 'pavitrapati,' incorporates an herbal extract derived from neem oil, turmeric, tulsi (holy basil), ajwain (carom seeds), black pepper, gum arabic, clove, sandalwood, and saffron. This patented invention was developed by Prof. Balasubramanian K from DIAT's metallurgical and materials engineering department. According to his statement, these additives possess antibacterial and antiviral qualities and operate as immunity-enhancing agents for self-care by the standards of the AYUSH Ministry. All of these factors contribute to the expansion of the regional market.

The North American herbal extract industry is projected to experience substantial growth. A combination of factors, including a shift in consumer preference toward organic and natural products and a surge in investment in herbal extracts R&D, is driving growth in the regional market. For instance, UTSA researchers are investigating the plant Artemisia annua, also known as Sweet Annie, and its extract, which has been used in traditional Chinese medicine for over 2,000 years. Their study focuses on better understanding the bioactive properties of a specific compound called Arteannuin B and its effects on cancer cells and COVID, the disease caused by the SARS-CoV-2 virus.

Furthermore, the market participants are launching novel extracts to enhance their market dominance. For instance, in March 2023, WishGarden Herbs Inc., a prominent herbal supplement business in the United States, introduced a new liquid herbal extract composition called Chlorophyll & Friends. Chlorophyll & Friends combines conventional techniques with contemporary trends and innovative strategies. The company combined chlorophyll with a nourishing plant mixture to produce a distinctive and highly effective liquid herbal medicine. This blend features many herbs that combine with chlorophyll as the main component, providing comprehensive effects on the body and an exceptional sensory experience. Therefore, these factors are anticipated to enhance the expansion of the North American market.

Segmental Analysis

The global herbal extract market is segmented by source and application.

Based on the source, the global market is divided into mint, rosemary, lavender, thyme, basil, dill, and others. 

The mint segment owns the highest market share. The mint herbal extract is a highly concentrated version of the active compounds found in the mint plant. It is usually made by extracting the essential oils and other useful components of the plant. Mint is a widely favored herb renowned for its refreshing taste and diverse health advantages. Peppermint and spearmint are two of the most prevalent forms of mint commonly used for extraction. The extraction procedure normally entails immersing the mint leaves in a solvent, such as alcohol or water, to extract the essential oils and other bioactive ingredients. The resultant solution, mint herbal extract or mint tincture, can be utilized for many purposes, encompassing culinary applications, medical applications, and aromatherapy.

Based on application, the global market is segmented into personal care and cosmetics, food and beverages, animal feed, pharmaceuticals, nutraceuticals, and others. 

The personal care and cosmetics segment dominates the global market. Herbal extracts have been increasingly popular in personal care and cosmetics because of their claimed natural and holistic advantages. These extracts are obtained from different plants and botanical sources and are used in a range of products for skincare, haircare, and overall personal health. Moreover, the prominent stakeholders are introducing novel goods in this market segment, propelling its expansion.

For instance, in April 2022, the Shahnaz Husain Group, a leading Indian brand in herbal beauty and skincare, introduced a high-end collection of products. This collection includes four exclusive formulations: Shylocks Premium, Shatone Premium, Shamla Premium, and Sharose Premium. These luxury items blend rare Ayurvedic oils and extracts from various herbs. The compositions are created to nourish the skin and hair with highly specialized natural antioxidants and moisturizers, achieving a state of healthy and youthful beauty.

Recent Developments

• October 2023- Sirio Pharma announced its plans to enhance its product range in the consumer health market by introducing a variety of herbal gummies that cater to popular consumer health categories. This expansion follows the company's recent launch of 'pharma-targeted' softgels.
• September 2023-Biotropics Malaysia Berhad, a producer of botanical extracts, introduced a new product called BioKesum leaf extract. This extract has been clinically shown to promote brain health. The BioKesum leaf extract is derived from the BioKesum plant, which is native to Malaysian wildlife.