HERBAL EXTRACT MARKET SIZE AND SHARE ANALYSIS - GROWTH TRENDS AND FORECASTS (2024-2031)

The Herbal Extract Market size is valued at US$ 41.8 Billion in 2024 and is expected to reach US$ 81.1 Billion by 2031, growing at a compound annual growth rate (CAGR) of 9.9% from 2024 to 2031.

Herbal extracts are concentrated forms of plants extracted using various techniques like heating, freezing or chemical solvents. They are available in various forms like liquids, powders, capsules and tablets. The main types of herbal extracts are whole plant extracts, single compound extracts and standardized extracts.

Whole plant extracts contain the complete soluble matter of a given plant. They provide the synergistic benefits of all active compounds in the plant. However, their effects may vary between batches based on plant cultivation conditions. Single compound extracts focus on isolating and concentrating a single active compound from the plant. They deliver targeted effects of that compound but lack synergy. Standardized extracts have consistent levels of one or more marker compounds. Their concentrations are verified allowing reproducibility. However, the isolated compound may behave differently than in the whole plant.

While herbal extracts offer health benefits of plants in convenient dosage forms, their effects are difficult to validate due to lack of clinical research in most cases. The efficacy and safety also depend on the plant species, extraction methods and processing used. Poor quality controls during procurement of raw materials or manufacturing can affect the strength and safety of extracts. However, when produced under good standards they provide an alternative for wellness and medicinal needs with fewer side effects than synthetics.

Drivers:

• Improving Health Consciousness: These days people are becoming more health conscious and they want to lead a healthy lifestyle. Herbal extracts are gaining popularity as they are considered natural products obtained from plants and herbs. Many consumers believe that herbal extracts provide health benefits and have little to no side effects compared to synthetic medicines. Studies show that certain herbal extracts can help improve digestive health, boost immunity, lower cholesterol, reduce inflammation and even help with stress and anxiety. As people undertake more research on health topics on the internet and via blogs, they are learning about how herbal extracts may help manage common health conditions. The demand for herbal medications and supplements is on the rise as people look for alternative remedies to maintain overall well-being. Manufacturers are innovating and introducing various herbal extracts in different forms like tablets, capsules and even infused in beverages and food products to make them more convenient for customers to include in their daily diet. Health-savvy individuals do not wish to compromise on their wellness goals and are fueling the need for herbal extracts.
• Growing Acceptance of Herbal Medicines: Over the past few decades, herbal medicines were considered a fringe practice in western cultures and the medical community promoted allopathic drugs. However, there is a change in perception now as scientific research validates some of the health benefits of certain herbal medicines. Mainstream customers are open to exploring herbal remedies to complement their healthcare regimen for minor ailments rather than always relying on pharmaceuticals. Even medical practitioners have started recognizing certain herbal medicines. Some of them recommend herbal treatments after evaluating their patients' medical history and symptoms. Various health organizations have also approved the use of select herbal medicines. As people become aware of evidence-based herbal practices and extracts through extensive research studies and awareness campaigns, there is more confidence among the masses. Herbal extracts satisfy the increasing consumer need for natural and traditional methods of self-care. Manufacturers effectively promote their herbal extracts as science-backed natural remedies. All these factors have led to rising cultural acceptance of herbal medicines in modern times.

Analyst Viewpoint:

The global herbal extract market has significant growth potential over the next five years. The market is driven by rising health consciousness among consumers and growing preference for herbal medicines and supplements. Increasing acceptance of Ayurveda and traditional Chinese medicines worldwide will augment the demand for herbal extracts. widening application scope across industries such as pharmaceuticals, cosmetics and F&B is expected to boost market revenues.

However, unpredictable raw material prices may negatively impact profit margins for market players. Strict regulations pertaining to the approval of herbal ingredients can delay new product development. Additionally, quality and standardization issues associated with raw herbs pose a challenge.

Asia Pacific accounts for the largest share of the global herbal extract market currently. Developed markets in North America and Europe are also lucrative regions with a growing health-savvy population. However, Latin America is poised to emerge as the fastest growing regional market with increasing preference for traditional remedies in Brazil and Mexico.

To leverage growth opportunities, companies must focus on procuring quality-certified raw materials and establishing robust traceability systems. Investment in R&D facilities will aid product innovation and development of standardized herbal extract formulations for various industries. Collaboration with local growers can help ensure consistent supply and sustainable sourcing practices. Entering emerging markets early through regional partnerships provides a first-mover advantage

Segment Analysis:

In terms of application, the Herbal Extract Market is segmented into functional food and beverages. Among the segments, functional food contributes the highest share of the market owning to the rising health consciousness.

Functional food contains bioactive compounds sourced from herbs that provide additional health benefits beyond basic nutrition. The growing awareness about preventive healthcare and focus on maintaining wellness naturally has increased the demand for functional food products fortified with herbal extracts. Particularly, herbal extracts are increasingly being added to staple food items like breakfast cereals, yogurt, and snack bars to enhance their nutritional profile. Changing lifestyles and busy schedules have led to a rise in demand for convenient packaged food that can fit into people's daily routine while also offering health advantages. This ongoing trend is propelling the use of herbal extracts in functional food applications. Moreover, various herbal components have scientifically proven health-promoting properties like antioxidant, anti-inflammatory, and antimicrobial activities which consumer seek to gain through their diets. This drives food companies to introduce novel products containing safe and quality herbal extracts.

In terms of type, the Herbal Extract Market is segmented into leaves, flowers, fruits & bulbs, and barks & stems. Among these segments, leaves contributes the highest share of the market.

Leaves are the primary organ for photosynthesis in plants and thus contain high concentration of bioactive compounds that provide health benefits to humans. Many commonly used herbs including thyme, oregano, sage, basil, lavender, mint etc. are sourced from their leaves which have established medicinal properties. Leaves of these herbs have significant levels of antioxidants, vitamins, minerals and other phytochemicals. They find applications as flavouring and preservative agents in food and cosmetic products due to anti-microbial benefits. Moreover, leaves are extensively utilized in herbal medicines and dietary supplements owing to easy availability and processing. Technological advancements have enabled large-scale and sustainable harvesting of leaves to meet the growing demand from herbal extract industry. Their wide applications, therapeutic properties and consistent supply chain have made leaves the dominant segment in the herbal extract market.

Regional Analysis:

• Asia Pacific has emerged as the fastest expanding herbal extract market globally. This can be attributed to factors like rising disposable incomes, growing health awareness, and increasing influence of Ayurveda and traditional Chinese medicine. Countries like China, India and Japan have lucrative opportunities for both domestic as well as international herbal extract players. Local manufacturers are recognizing the export potential due to systemic cost advantages. They are focusing on quality certifications to build trust among international buyers. Modern trade has boosted product awareness while e-commerce is facilitating broader distribution in the emerging Asian market for herbal extracts.
• North America has established itself as the leading region in the global herbal extract market. The presence of major herbal extract brands and suppliers has given the region an edge over others. Companies based in the United States and Canada have considerable experience and expertise in developing and marketing herbal extracts. They actively invest in research and development to come up with innovative product formulations using different plant-based ingredients. This has helped them capture a large consumer base in the pharmaceutical, cosmetic, and food and beverage sectors. Additionally, North American brands have strong distribution networks across the region as well as overseas. Their marketing campaigns promote herbal extracts as natural ingredients that provide health benefits. This has fueled demand consistently over the years.
• The European herbal extract market has also grown significantly, driven majorly by Germany, France, and the United Kingdom. Europe has a highly health-conscious population that prefers natural and plant-derived products. Leading herbal extract producers from Germany leverage their traditional medicine knowledge to cater to the regional as well as global demand. Major French cosmetic brands are recognized the world over for utilizing premium herbal extracts in their products. The U.K. is home to several research firms that conduct clinical trials on the medicinal properties of numerous herbs. This has strengthened the scientific credibility of various European herbal extracts. The regional trade regulations also support the indigenous production of herbal raw materials and their extracts.

Figure 1. Herbal Extract Market Share (%), By Region, 2024

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Herbal Extract Market- Drivers

• Improving Health Consciousness: These days people are becoming more health conscious and they want to lead a healthy lifestyle. Herbal extracts are gaining popularity as they are considered natural products obtained from plants and herbs. Many consumers believe that herbal extracts provide health benefits and have little to no side effects compared to synthetic medicines. Studies show that certain herbal extracts can help improve digestive health, boost immunity, lower cholesterol, reduce inflammation and even help with stress and anxiety. As people  more research on health topics on the internet and via blogs, they are learning about how herbal extracts may help manage common health conditions. The demand for herbal medications and supplements is on the rise as people look for alternative remedies to maintain overall well-being. Manufacturers are innovating and introducing various herbal extracts in different forms like tablets, capsules and even infused in beverages and food products to make them more convenient for customers to include in their daily diet. Health-savvy individuals do not wish to compromise on their wellness goals and are fueling the need for herbal extracts.
• Growing Acceptance of Herbal Medicines: Over the past few decades, herbal medicines were considered a fringe practice in western cultures and the medical community promoted allopathic drugs. However, there is a change in perception now as scientific research validates some of the health benefits of certain herbal medicines. Mainstream customers are open to exploring herbal remedies to complement their healthcare regimen for minor ailments rather than always relying on pharmaceuticals. Even medical practitioners have started recognizing certain herbal medicines. Some of them recommend herbal treatments after evaluating their patients' medical history and symptoms. Various health organizations have also approved the use of select herbal medicines. As people become aware of evidence-based herbal practices and extracts through extensive research studies and awareness campaigns, there is more confidence among the masses. Herbal extracts satisfy the increasing consumer need for natural and traditional methods of self-care. Manufacturers effectively promote their herbal extracts as science-backed natural remedies. All these factors have led to rising cultural acceptance of herbal medicines in modern times.

Herbal Extract Market- Opportunities:

• New product development through research and innovation: New product development through extensive research and innovation presents a tremendous opportunity for growth in the herbal extract industry. As consumers increasingly seek natural and plant-based remedies for health and wellness, introducing novel, scientifically validated herbal formulations could capture significant market share. With rising awareness of preventative healthcare and interest in traditional remedies, investing in large-scale clinical trials to verify the therapeutic properties and benefit specific herbal mixtures would give companies a competitive advantage. This can help expand the existing consumer base for herbal extracts and promote new usages. Considering many herbal plants' compounds are still untapped and their full benefits undiscovered, investment in laboratory and phytochemical research can unearth new, high-value extracts. Harnessing modern biotechnology to standardize extracts, identify active pharmacological components and understand how different herbs potentiate each other's effects when combined would unlock new commercial applications. For example, extensive research on compounds in Ashwagandha led to clinical proof of its anti-inflammatory and anti-stress properties, substantially growing its demand globally. Systematic research focusing on particular health issues, like immunity, bone health or cognitive functions, can create specialized herbal formulas matching patient needs.
• Rising investments and partnerships in the market: The herbal extract market has great potential for growth with rising investments and partnerships. As consumers increasingly demand natural and plant-based ingredients in food and personal care products, there is a growing interest in herbal extracts. This changing consumer preference for herbal alternatives is attracting substantial investments in the research and development of herbal extracts. For example, according to data from the USDA's National Agricultural Statistics Service, the acreage dedicated to herb production in the USA increased by almost 10% from 2019 to 2020, indicating higher producer interest. Many companies are now actively exploring partnerships to develop and commercialize innovative herbal extract products. Major food and beverage players have joined hands with small herbal extract producers to expand into this market. As per data from India Brand Equity Foundation, the number of memorandum of understandings and agreements signed between Indian herbal extract companies and international buyers rose by 25% between 2020 and 2021. Such strategic collaborations allow effective transfer of technology to produce high-quality, standardized herbal ingredients. They also help smaller brands to get access to international clients and markets.

Herbal Extract Market- Trends

• Increasing spending on herbal supplements and remedies globally: The global demand for herbal supplements and remedies has been steadily rising in the past few years. Consumers are increasingly turning to natural options to support their health and wellness. This rising interest in herbal products is having a significant impact on the herbal extract market. As more people incorporate herbal supplements in their daily routines to boost immunity, address minor health issues or promote relaxation, the sales of herbal extracts used in formulating these supplements have also increased substantially. Many supplement manufacturers have reported a surge in demand for popular herbal extracts like turmeric, ginger, garlic, holy basil, ashwagandha etc. as such ingredients are considered beneficial for general wellness. The increased commercial cultivation and production of herbs used globally in supplements has also spurred the herbal extract industry's growth.
• Advancement in extraction technologies: The advancement in extraction technologies is having a significant impact on the herbal extract market. Newer and innovative extraction methods allow for more effective and efficient extraction of active compounds from herbs. This enables extraction of a wider variety of compounds from various plant parts like roots, bark, leaves, seeds etc. that previously were difficult to access and extract. Some of the modern extraction techniques gaining popularity include supercritical fluid extraction, ultrasonic-assisted extraction and enzyme-assisted extraction. Supercritical fluid extraction uses carbon dioxide under high pressure and temperature conditions as a solvent. It is a greener alternative to traditional organic solvents as CO2 is non-toxic, non-flammable and easily recyclable. This technique helps extract heat-sensitive or volatile compounds without degrading them. Ultrasonic-assisted extraction uses ultrasonic waves to disrupt plant cell membranes and accelerate mass transfer of compounds into the solvent, resulting in faster and better extractions. Enzyme-assisted extraction involves usage of enzymes to break down plant cell walls and facilitate release of compounds. This method is beneficial for isolation of compounds that may otherwise be locked within cellular structures.

Herbal Extract Market-Restraints:

Stringent Regulations are a Roadblock for the Market:

However, stringent regulations around the usage of herbal extracts are expected to restrain market growth to some extent. Regulatory agencies in different regions have implemented strict norms and guidelines around herbal extracts due to safety concerns. For instance, the FDA (Food and Drug Administration) in the US has detailed policies governing the production and usage levels of herbal extracts in end products.

There are limits specified on the types of plants that can be sourced and maximum amounts at which certain herbal extracts can be added. This makes compliance complex and increases production costs for companies. Also, different geographies have discrepancy in how herbal extracts are categorized and permitted. For example, an extract allowed in Europe may not be allowed in Asia due to non-uniform rules. Navigating diverse international regulations adds an administrative burden.

Counter Balance: Adhering to regulatory requirements, such as Good Manufacturing Practices (GMP) and labeling guidelines, can help maintain the integrity of the herbal extract market and safeguard consumer health.

Lack of Standardization Poses Quality Issues:

Another significant challenge faced in the herbal extract industry is the lack of standardization in sourcing, processing, and quality check methods. Unlike pharmaceutical drugs, most herbal extracts do not have defined manufacturing practices in place. This makes quality control a difficult task and often leads to batch-to-batch inconsistencies.

As natural ingredients are used, the phytochemical content can vary based on factors like climate, soil conditions, time of harvest and more. Without globally accepted standards, manufacturers struggle with documentation and prove of product efficacy. There are also concerns over adulteration and contamination risks without streamlined quality norms. This lack of standardization and quality issues pose a challenge for scientific validation and large-scale commercialization of many herbal extracts.

In conclusion, while the demand drivers of natural wellness trends and new applications in F&B present an optimistic outlook, stringent regulations and inconsistent quality practices still act as certain restraints for the herbal extracts industry to fully unleash its market potential.

Counter Balance: Continuous advancements in technology can help improve the efficiency and safety of herbal extract production, making it easier for manufacturers to comply with regulations and meet consumer demands

Top Key Players:

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 GMB, MartinBauer.

Herbal Extract Market- Recent Developments:

• In June 2023, a well-known skin care expert Anherb Natural is announced to launch its new product line in the cosmetic industry. Anherb Natural’s vision is to create an image on the beauty market with its best offerings and specialized skin care products.

Figure 2. Herbal Extract Market Share (%), By, By Application Channel 2024

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Top Companies in Herbal Extract Market:

• 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 GMB,

*Definition: An herbal extract is a preparation that uses a solvent to extract beneficial properties from an herb or herbs. The main advantage of using extracts over raw herbs is that once extracted from the plant matrix, the phytochemicals bypass the need for digestion and are far more readily absorbable. Herbal extracts come in various forms, such as liquid extracts, essential oils, and powdered extracts.  Herbal extracts are often used as dietary supplements and alternative medicine, and they can be categorized by the solvent used to make them and/or by their form For example, liquid extracts made with alcohol are called tinctures, while watery extracts made by infusion or decoction are used as teas, rinses, and the base for syrups and other products.