The herbal extract market is a thriving international industry, with demand growing for supplements and functional foods containing plant-derived bioactives that promote health and wellbeing. As consumers increasingly value natural ingredients and herbal remedies, the herbal extract industry has expanded to provide purified extracts standardized for specific compounds like flavonoids, terpenes, and alkaloids. Key functions of herbal extracts include antioxidant support, immune modulation, digestive health, heart health, anti-aging, weight management and sports nutrition. The Global Herbal Extract Market is estimated to be valued at US$ 41.8 BN 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., and Döhler GMB. The growing health-conscious population and increasing awareness about herbal products are fueling the demand for herbal extracts globally. Major players are expanding their footprint in untapped regions through mergers and acquisitions to leverage the growth opportunities.
Growing demand in the market: Rising consumer knowledge of herbal remedies and growing preference for natural ingredients are driving the demand for Herbal Extract Market Demand is especially high in application segments like dietary supplements, food and beverages, personal care, and pharma OTC products. The COVID-19 pandemic further boosted the market as people looked for immunity boosting natural formulations.
Global expansion of market: Key players are focusing on emerging economies in Asia, Latin America, Middle East and Africa to expand their global presence. Strategic partnerships with local players help gain understanding of regional preferences and regulations. Companies are also undertaking contract manufacturing initiatives and establishing supplier agreements to cater international demand.
Market key trends
Increasing investments in R&D for standardization and quality control of herbal extracts is a key trend. Rigorous analytical testing allows manufacturers to provide certificate of analysis specifying concentration of bioactive compounds. This helps build consumer trust and support clinical research on health benefits. Another notable trend is the development of herbal extracts from exotic plants indigenous to specific geographies. Novel non-wood forest product extracts customized for regional demand present new commercial opportunities. Sustainable sourcing practices are also gaining traction as companies aim for certifications like organic and fair trade to appeal to conscientious consumers.
Porter’s Analysis
Threat of new entrants: Low cost of production and low startup costs have made it easy for new players to enter the market. However, established companies have strong brand names and supply chain mechanisms.
Bargaining power of buyers: Buyers have moderate bargaining power due to the presence of substitutes and undifferentiated products. However, demand for herbal extracts is growing steadily.
Bargaining power of suppliers: Suppliers of raw materials like plants and herbs have low bargaining power due to the availability of substitute supplies.
Threat of new substitutes: Threat from substitutes is moderate as plant-based extracts are gaining popularity over synthetic chemicals and extracts.
Competitive rivalry: The market is fragmented with many local and international players. Intense competition keeps pricing and profit margins low.
The North American region accounts for the largest share of the global herbal extracts market, mainly due to rising health consciousness and adoption of natural and organic products. The Asia Pacific region is expected to grow at the fastest pace during the forecast period. Rising middle-class population, growing herbal industry, and inclination towards traditional medicines are fueling demand in countries like China, India, Indonesia, and South Korea.
India is emerging as the fastest growing region for herbal extracts market. Factors such as easy availability of raw materials, low production costs, established manufacturing capabilities, and flourishing herbal industry are attracting global players to invest in India. Growing middle-class population, rising disposable income, increasing health awareness, and Government support for traditional medicines are expected to drive double-digit growth in the Indian market during the forecast period.
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1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it.