What is the demand for natural ingredients for cosmetics on the European market?

Europe is one of the largest and fastest-growing markets for cosmetics in the world. Increasing demand for natural ingredients makes Europe an interesting market for companies seeking to enter the market, such as those selling new and innovative natural ingredients. Western European countries, with large consumer markets and important trading hubs, offer the most opportunities for exporters of all kinds of natural ingredients, specifically vegetable and essential oils.

1. Sector description

In Europe there are thousands of ingredients for cosmetics that are considered natural, according to the registries of the European Commission’s database for information on cosmetic substances and ingredients (CosIng). Natural ingredients for cosmetics can be categorised into three main general groups, as shown in the table below.

Table 1: Description of natural ingredients for cosmetics by category

Source: ProFound, 2024

There is no easily accessible quantitative data on the import and use of natural ingredients for cosmetics. Some popular ingredients for cosmetics such as oils and fats are also important ingredients in the food industry. As a result, the use of some natural ingredients in cosmetics is often hidden in the overall data on imports. Despite these limitations regarding trade data for cosmetics ingredients, it is still possible to draw certain conclusions about European market demand and gain useful insights. 

This analysis will focus on “Other fixed vegetable fats and oils and their fractions” (HS code 151590) and “Other essential oils, excluding those of citrus fruit and mint” (HS code 330129). When the terms ‘vegetable oil’ and ‘essential oil’ are used in this report, they refer to oils included in these HS codes, particularly those that are more likely to be used in cosmetics. 

Botanical extracts will not be analysed in detail as trade data is too fragmented to draw any solid conclusions on demand from the cosmetics industry. Trend-wise, botanical extracts are of major interest to cosmetics brands and manufacturers. Hundreds of plants have cosmetic properties, and more botanical extracts are introduced to the market every year. The challenge with botanical extracts is that most non-food plants are toxic and their use must therefore be supported by adequate safety and efficacy data.

2. What makes Europe an interesting market for natural ingredients for cosmetics?

Europe is a very interesting market for natural ingredients for cosmetics as it is a major producer, consumer, and exporter of cosmetic products worldwide. Natural ingredients are very much ‘on trend’ and European cosmetic manufacturers are using a wide range of natural ingredients to manufacture their cosmetic products. Safety and efficacy remain keywords for all cosmetic ingredients and sustainable sourcing is increasingly important.

Europe dominates a significant share of the global beauty and personal care market

The European market is one of the largest cosmetics markets in the world, worth €96 billionin 2023. Europe is the world’s third-largest cosmetics market, behind North America and North Asia, taking up around 24% of the global beauty and personal care market which is valued at around €525 billion. Assuming a direct relationship between the value of retail sales and the volume of bulk cosmetic products sold, Europe is the third-largest market for quantity of cosmetic products. As cosmetic products are produced using cosmetic ingredients, Europe can also be considered among the top largest markets for cosmetic ingredients in volume.

In addition to annual revenue, Europe stands out globally in terms of per capita spending. According to Cosmetics Europe & Euromonitor International, European per capita spending on cosmetics was estimated to be €169 in 2023. This has been increasing steadily since 2021, at an average annual rate of 8.3%. Europe also stands out in terms of production and exports of high-quality cosmetic products. In 2023, cosmetics manufacturing in Europe accounted for €11 billion, while the export of cosmetic products to the rest of the world totalled €28.2 billion in 2023.

Source: CTPA from Cosmetics Europe’s Market Performance Report, 2024

The cosmetics market is experiencing continuous and significant growth in both Eastern and Western Europe. In recent years, the European market grew on average by 4.1% per year in terms of value. Between 2018-2023, the growth of the European cosmetics market was steady, except for 2020, when most countries experienced a decline in sales due to the COVID-19 pandemic.

Source: Cosmetics Europe Market Performance Reports, 2024

Between 2022 and 2023 alone, the European market for cosmetics grew at an average rate of 9.1%. This exceeds global market growth and is well above the rates of other major national markets such as the US (5.2%). What’s more, annual growth in Europe is now higher than in the years before the pandemic. This indicates a robust state of the industry and suggests that the value of the market will continue to grow. In fact, the European market is expected to stay on its positive trend, growing at an average annual rate of 2.1% through 2027.

Source: Cosmetics Europe Market Performance Report & L'Oréal 2023 Annual Report

Europe is the major importer of selected natural ingredients for cosmetics

Europe is the world’s largest importer of vegetable oils and essential oils, some of which are widely used as natural ingredients in cosmetic products. In 2023 Europe accounted for 48% of the volume and 42% of the value of global imports of vegetable and essential oils, far exceeding Asian and American imports. The demand for and use of natural ingredients continues to grow, and the data presented here gives exporters good reason to target Europe as the top market for natural cosmetic ingredients.

According to the ITC Trade Map, European imports of natural ingredients for cosmetics amounted to 470,561 tonnes (€2,221 million). Overall, European imports of natural ingredients for cosmetics has increased annually by 5.5% in value and 3.6% in volume over the last five years. This growth is due to rising demand for vegetable oils, while essential oils imports showed a slight decline over the period. While global imports declined on average by -0.4% in volume, the exponential growth of European imports since 2020 suggests a positive trend for the coming years.

Source: ITC Trade Map, 2024

Developing countries play an important role in supplying natural ingredients for cosmetics to Europe. In 2023, 33% of the value of European imports of selected natural ingredients came from developing market economies. Among developing countries, China, India, Ghana, Indonesia, and Morocco are the largest suppliers of both essential oils and vegetable oils.

This is particularly true for essential oils. In 2023, 48% of the value of European imports of essential oils came from developing market economies, totalling €430 million. Between 2019 and 2023, the value of these imports declined at an average rate of -1.5% each year. The three main import hubs for essential oils from outside Europe are France, United Kingdom, and Germany. China and Indonesia are the main suppliers of essential oils for these import hubs, exporting oils such as patchouli, nutmeg, and clove. Note that these import data are not exclusively for cosmetics, as various essential oils like nutmeg and clove oils are important ingredients for both the cosmetics and food industries.

Vegetable oil imports from developing countries accounted for 23% of the total value of European imports, amounting to €300 million in 2023. Between 2019 and 2023, the value of vegetable oil imports from developing countries grew by 5.5% per year on average. The top-three importers of vegetable oils from outside Europe are the Netherlands, France, and Spain. Ghana, China, and India are major exporters to the top hubs. Imports from Ghana and Burkina Faso may include shea butter, from Morocco may include argan oil, and from Mexico may include avocado oil. As in the case of essential oils, it should be noted that these import data do not refer exclusively to cosmetics.

Source: ITC Trade Map, 2024

Europe is among the world’s largest markets for organic and sustainable ingredients for cosmetics

Europe is currently among the largest markets for natural and organic cosmetics. In recent years, the European cosmetics industry has been moving towards more sustainable and natural products. This trend has led to a rise in organic and eco-friendly brands. For example, in 2023, more than half of UK beauty and personal care product launches featured ethical and environmental claims, making them the norm rather than the exception.

Consumers are increasingly aware of the benefits of natural and organic cosmetics, which are widely available in major retail outlets, and are demanding products that not only perform well but are also environmentally responsible. Together with North America, Europe dominates the natural and organic cosmetics market, accounting for over 80% of total sales. Although 2023 was a tough year for the organic beauty sector due to consumer price sensitivity and economic challenges, most brands anticipate growth in the years ahead with sales of natural cosmetics expected to grow at an average rate of 5.7% per year, reaching €3.23 billion by 2028.

Sustainability concerns extend to a product’s entire lifecycle, starting with ingredient sourcing. Sustainable sourcing is now a core expectation across European supply chains, with nearly 60% of German consumers expressing concern about where ingredients come from. European buyers are increasingly focused on sustainable resource management to meet rising consumer demand for eco-friendly beauty and personal care products. This focus on sustainability could lead to a revival of natural ingredients and new opportunities for exporters of natural ingredients, regardless of whether their products are certified organic or not. However, it’s important to note that natural and organic cosmetics still account for less than 5% of the total cosmetics market, meaning that most natural ingredients are used in non-certified products.

The demand for sustainable sourcing will be strengthened and further extended by developments on the regulatory front, namely: the European Green Deal, the Chemicals Strategy for Sustainability, and the Corporate Sustainability Due Diligence Directive. Due to these regulations, companies are expected to  take on a key role in building a sustainable economy and society. The regulatory changes will impact the cosmetics industry in multiple ways, with possible knock-on effects on consumers. While these regulations are not directly targeted at exporters, the requirements for European companies may affect you as part of their global supply chains.

Today, many companies in the cosmetics industry are aligning their activities with the United Nations Sustainable Development Goals (SDGs) and are seeking certification for natural, organic, fair trade, ethical sourcing, and biodiversity preservation. This has put some pressure on suppliers of natural ingredients to obtain certification schemes, such as COSMOS, NATRUE, Fairtrade, or UEBT. For suppliers for whom certification costs create barriers, alternative options are available, such as the ISO16128 self-assessment system for natural ingredients, the NATRUE Approved Raw Material procedure, and SEDEX affiliation.

3. Which European markets offer the most opportunities for natural ingredients for cosmetics?

Western European countries such as Germany, France, Italy, the UK, Spain, and the Netherlands offer great opportunities for natural ingredients for cosmetics and are therefore the most attractive markets for suppliers and exporters. These countries have the largest consumer markets. Large manufacturers that use natural ingredients are also located there. Most of these countries are also among the top European importers of vegetable and essential oils and are therefore assumed to have the most potential buyers. 

Table 2: Characteristics of European countries with the most opportunities for natural ingredients for cosmetics

Source: ProFound, 2024

France offers the most opportunities for suppliers of natural ingredients for cosmetics

The French market offers the most opportunities for suppliers of ingredients used in cosmetics. As the second-largest cosmetics market in Europe, valued at €13.7 billion in 2023, France has the highest number of imports of vegetable and essential oils in Europe. This suggests there is a high demand for natural ingredients in the country. 

In 2023, France imported a total of 3,315 tonnes (€291 million) of essential oils under HS code 330129, accounting for 19% of European imports. Notably, 69% of these imports came from developing countries which indicates a strong demand for natural ingredients from suppliers from outside Europe. Major non-European exporters to France include India, Turkey, Indonesia, China, and Morocco.

Source: ITC Trade Map, 2024

In the same year, French imports of vegetable oils (HS 151590) totalled 72,283 tonnes (€235 million), representing 16% of the total volume of European imports. About 23% of these imports were from developing countries, with Morocco, Burkina Faso, Peru, Mexico, and Argentina as key suppliers. These figures highlight France's dependence on international markets for natural ingredients. 

Source: ITC Trade Map, 2024

France is not only a large, but also a growing cosmetics market. According to Cosmetics Europe’s Market Performance Report, the French market grew by 6.3% between 2022 and 2023. It is expected to grow by over 2% annually over the next five years, increasing its value by almost €1.7 billion by 2028. The largest segments in the French market are skincare (31%), toiletries (25%), and fragrances (22%). Moreover, France is among the top-ten countries in terms of per capita consumption, with each French person spending €202 on cosmetics in 2023. The country is also home to the largest number of cosmetics manufacturing SMEs in Europe (1,917 SMEs), which tend to operate in niche markets and have a considerable interest in natural ingredients. 

France is a global leader in cosmetics exports, with more than half of its cosmetics production destined for foreign markets. In fact, the cosmetics sector is France’s third largest export sector. France and Germany are Europe’s main exporters of cosmetics. In 2023, both countries dominated nearly 50% of total European exports, with a shared value of 14 billion euros.

France also has one of the largest natural and organic cosmetics markets in Europe and  is growing steadily. In 2023, the value of the natural cosmetics market in France was €313 million, showing an average annual growth of 4.9% since 2018. France also has a large supply of natural and/or organic personal care and beauty products. To date, there are 17,054 products with the COSMOS signature in France (the leading standard worldwide for organic and natural cosmetics), representing 48% of all products with this signature in the world. The sector is expected to continue to grow, reaching a value of €394 million in 2028 as a result of the expansion of distribution channels, the increase in online customer reach, and consumers' desire for natural beauty and well-being.

Some outstanding importers/players in the French market include: leading cosmetics manufacturer and retailer L’Occitane Group which has a Sustainable Communities programme and works directly with local producers to foster long-term partnerships; essential oils supplier Albert Vieille - Givaudan which has established exclusive supply chains to stay close to the source of ingredients and partner with local farmers; the trading company Exaflor specialised in certified essential oils and vegetable oils/butters that has long-standing relationships with producers around the world; the company Matières Premières Essentielles (MPE) focused on the trade and production of raw materials and essential oils sourced from various supplier countries, among others.

The Netherlands is an important hub and entry point for natural ingredients

The Netherlands presents significant opportunities for suppliers of natural cosmetic ingredients from developing countries, particularly for vegetable oils. Although the Dutch cosmetics market is smaller compared to that of other European countries, ranking seventh in retail sales (€3.4 billion) and in the number of SME cosmetics manufacturers (401), it remains highly attractive for several reasons.

Per capita spending on personal care and beauty products in the Netherlands is estimated at €189 annually, which is higher than the regional average. The Dutch beauty and personal care market grew by 9.5% in 2022-23, nearly matching the overall European growth rate. It is expected to grow at a steady rate of 2% per year over the next five years, adding approximately €200 million to its value. The largest segments in the market are toiletries (27%), skincare (21%), and fragrances (19%), with skincare showing a strong 8.6% growth between 2022 and 2023.

The Netherlands plays a crucial role as a trading hub for natural ingredients, which is largely due to the strategic importance of the Port of Rotterdam – Europe’s largest seaport. The country's position as a re-export powerhouse is evident as significant volumes of natural ingredients are imported, processed, and quickly redistributed to Western Europe without significant links to domestic demand. This efficient trading infrastructure makes the Netherlands a gateway for natural ingredients entering the European market.

The Netherlands ranks among the top-three global importers of vegetable oils and is the second-largest importer in Europe. In 2023, Dutch imports of vegetable oils totalled 63,851 tonnes (€156 million), representing a steady annual growth of 4.4% since 2019. A notable 51% of these imports come from developing countries, with Ghana as the primary supplier, likely exporting significant quantities of shea butter. Other major non-European suppliers include China, Burkina Faso, and Vietnam.

In addition, the Netherlands is home to small vegetable oil refineries that offer third-party refining services. This creates opportunities for suppliers from developing countries to refine their oils locally, adding value before export. While this approach can present logistical challenges, refined oils are more commonly used in cosmetics than unrefined grades.

In contrast, the Netherlands plays a less significant role in the import of essential oils. In 2023, Dutch imports of essential oils amounted to 1,106 tonnes (€72 million), with 21% purchased from developing countries. Indonesia, China, India, and Brazil are the main suppliers. However, Dutch imports of essential oils have been declining, with an average annual growth rate of -4.9% between 2019 and 2023.

Key players in the Dutch market include AAK, a world-leading supplier of plant-based ingredients; Ultra International B.V., specialising in essential oils; and De Lange, which works with fatty oils, plant extracts,  essential oils and more.

Spain is a fast-growing market with significant imports of essential and vegetable oils

Spain presents the third-largest opportunity for suppliers of natural ingredients for cosmetics, ranking as the fifth-largest cosmetics market in Europe with a value of €10.4 billion in 2023. Between 2022 and 2023, the Spanish cosmetics market showed an impressive growth of 12%, making it one of the key sectors contributing to the country’s economic expansion. Spain is also ranked among the top-seven European countries in terms of cosmetics market growth. Notably, Spain had the third-highest per capita consumption of cosmetics in Europe in 2023, with an estimated €216 per person.

The skincare segment is the largest in the Spanish market, which has been growing steadily for three consecutive years. Spain is home to 642 cosmetics manufacturing SMEs and is one of the top-ten global beauty exporters, with exports growing at a remarkable 22% annually.

In terms of imports, Spain is among the top-five European importers of vegetable oils, holding a 7.8% share of total European imports. Spanish imports of vegetable oils reached 35,187 tonnes (€103 million) in 2023, reflecting an average annual growth of 32% in volume and 31% in value since 2019. Developing countries supply 32% of these imports, with key suppliers being Kenya, Peru, China, India, and Argentina.

Spain also ranks as the fourth-largest European importer of essential oils, with a total import volume of 2,137 tonnes (€77 million) in 2023. Although Spanish imports of essential oils have declined slightly in recent years, with an average annual decline of -2.1% in volume and -0.4% in value between 2019 and 2023, 58% of essential oils are still purchased from developing countries such as Indonesia, China, Haiti, India, and Tunisia.

Spain's role as a major hub for the import of vegetable and essential oils makes it a strategic market within Europe. The country's growing demand for natural ingredients offers numerous opportunities for suppliers with a competitive range

Notable importers in the Spanish market include Provital, which supplies natural oils rich in active properties from global sources, Bela Vizago, specialised in the commercialisation of vegetable oils such as argan oil, rosehip oil, prickly pear oil, almond oil, shea butter, beeswax, among many others for the cosmetic and food industries, and Sensient, a company specialising in essential oils purchased from various regions.

Germany is the largest market for cosmetics in Europe

Germany is Europe’s largest market for cosmetics, valued at €15.8 billion in 2023. Between 2022 and 2023, the German market grew by 10.6%, surpassing the regional average and placing Germany among the top-ten countries with the largest growth. The market is expected to grow by over 1% per year in the coming years, increasing by €1.8 billion by 2028. Germany is also among the top-ten countries in terms of per capita consumption, with each German consuming an estimated €187 worth in 2023.

Retail sales and consumer demand for cosmetic products in Germany are directly related to the country's population. Germany has the largest population in the European Union and the second-largest population in the whole of Europe, which explains the size of its market. Also, Germany is largely made up of small and medium-sized companies, with 611 cosmetic-manufacturing SMEs in 2023.

Source: CTPA from Cosmetics Europe’s Market Performance Report, 2023

In 2023, Germany imported 17,110 tonnes (€101 million) of vegetable oils, accounting for 3.8% of the total European import volume of vegetable oils. Between 2019 and 2023, imports of this product fell on average by -10% each year in volume. Germany imports most vegetable oils from other European countries, so it is not considered a leading trade hub for these specific ingredients. Still, 30% of direct imports of vegetable oils come from developing countries. The main non-European exporters of vegetable oils to Germany are China, Morocco, Turkey, and Panama.

In 2023, German imports of essential oils amounted to 2,810 tonnes (€138 million), accounting for 16% of the total European import volume. Of the imported essential oils, 49% was purchased from developing countries, mainly China, Indonesia, India, Egypt, and Tunisia. This creates high-value opportunities for essential oils suppliers outside Europe.

Germany, although not the largest importer of vegetable or essential oils by volume, stands out for importing these products at a much higher value, indicating a preference for high-quality oils. This opens opportunities for exporters to focus on smaller, premium shipments to succeed in the German market.

As the most significant market for natural and organic cosmetics in Europe, Germany shows a strong consumer interest in sustainability, with over 70% of the population considering sustainability when buying cosmetics and personal care products. The demand for products free from harmful chemicals such as parabens, silicones, and microplastics is increasing, as more Germans opt for natural and sustainable alternatives. In 2022, 52% of consumers in Germany reported using natural and/or organic beauty products.

Germany also leads in the availability of certified products, with 2,596 COSMOS-certified items and 3,932 NATRUE-certified products, the highest in the world for NATRUE-certified products. This strong commitment to sustainability has fuelled growth in the country's natural cosmetics market, valued at €342 million in 2024. Looking ahead, the market is expected to grow at an average annual rate of 5.28%, reaching €414 million by 2028.

Among the key players in the German market is All Organic Treasures (AOT), a supplier of oils, fats, and proteins, known for its long-term partnerships with suppliers from various countries, ensuring fair pricing and sustainable sourcing. Another important company is Primavera, which specialises in essential oils, plant extracts, floral waters, and vegetable oils. Primavera sources its ingredients mainly from global farm partnerships, is dedicated to fair trade, and actively supports social projects worldwide.

The United Kingdom is a major cosmetics market, with a thriving manufacturing base

The UK ranks as the fourth-largest cosmetics market in Europe, offering numerous opportunities for suppliers of natural ingredients. In 2023, the British cosmetics market was valued at €10.9 billion, growing by 9.7% compared to 2022. However, the organic beauty and wellbeing sector saw a decline of -8.0% between 2022 and 2023, with retail sales exceeding €163 million, according to the Soil Association.

Despite this downturn, the UK remains a strong market for natural and organic ingredients, driven by its many cosmetics manufacturing SMEs. The country had the third-largest number of cosmetics manufacturing SMEs in Europe in 2023, with 880 companies. These SMEs, often focusing on niche and exotic ingredients, play a significant role in innovation and growth within the industry. The largest market segments are toiletries (28%), skincare (25%), and fragrances (21%), with a per capita consumption of €162 in 2023.

The UK is a key market for essential oils. In 2023, the UK imported 2,513 tonnes of essential oils worth €108 million, representing 14% of total European imports. A significant portion (62%) of these essential oils were purchased from developing countries, including China, India, Indonesia, Turkey, and Egypt. Despite a slight decline in essential oil imports over the past five years (-1.7% annually), the UK remains one of Europe’s top importers. In contrast, UK imports of vegetable oils, which reached 22,057 tonnes (€54 million) in 2023, show a positive growth trend with a 4.7% annual increase from 2019 to 2023. Of these imports, 33% were purchased from developing countries such as China, Indonesia, and Mexico.

The UK is also a leading market for organic and natural cosmetics in Europe. Despite the temporary downturn caused by the cost-of-living crisis, the COVID-19 pandemic, and Brexit, the organic health and beauty sector grew by an average of 9.5% annually over the last five years, from €103 million in 2018 to €162 million in 2023. The outlook for the sector remains positive, with many certified natural and organic brands expecting growth in the near future.

The UK's exit from the European Union (EU) did not have a negative impact in terms of sales, revenues, or trade of cosmetics. Due to Brexit, the UK now has its own cosmetics regulation and for the time being this is very similar in terms of requirements. In the case of chemicals, UK REACH legislation effectively doubles the cost for companies (including non-European companies) that opt for REACH registration. Apart from UK REACH for essential oils, the other outcomes of Brexit should not affect opportunities for developing country suppliers as the UK remains a major market. 

Several important players in the UK market include The Body Shop, known for its pioneering fair trade programme with producers around the world, and Global Essence, a leading supplier of natural ingredients. Another key player is Lush, a renowned manufacturer and retailer of handmade cosmetics. Lush is particularly committed to ethical sourcing and sustainable practices, working directly with local communities and small-scale suppliers of natural ingredients to promote long-term partnerships.

Switzerland’s focus on luxury and sustainability makes it an attractive market for natural ingredients 

Switzerland offers great opportunities for suppliers of natural cosmetic ingredients, especially exporters of essential oils. The country ranks 16th in Europe for imported volumes of vegetable and essential oils and seventh in value. This is because Switzerland mainly trades in essential oils, which are higher in value but imported in smaller amounts than vegetable oils. 

In 2023, Swiss imports of essential oils reached 1,302 tonnes (€101 million), making up 7.3% of Europe’s imports by volume and 11% by value. Demand for essential oils has grown steadily, with an average yearly increase of 7.3% in volume and 4.5% in value between 2019 and 2023. Around 41% of these imports came from developing countries such as Indonesia, India, Haiti, China, and Egypt. On the other hand, vegetable oil imports reached 2,073 tonnes (€39 million) in 2023, with an average annual growth of 2.2% in volume and 0.9% in value over the past five years. About 31% of these imports were from developing countries, including China, Paraguay, Morocco, Israel, and Benin.

Switzerland has one of the top-ten cosmetics markets in Europe, valued at €2 billion in 2023. While the market declined by -1.3% between 2022 and 2023, following strong growth in the previous year (2021–2022), current figures are still higher than in earlier years, and growth is expected over the next five years. Switzerland is home to 163 cosmetics-manufacturing SMEs, a median figure compared to other European countries, showing a moderate production capacity.

Skincare (32%) and hair care (22%) are the largest market segments, with both showing growth between 2022 and 2023. In 2023, Switzerland ranked third in Europe for per capita cosmetics consumption, with an average of €233 per person. Exports also play an important role in the industry, with €1.6 billion worth of beauty and personal care products exported in 2023, including €831 million to markets outside of Europe.

The Swiss cosmetics market is characterised by a strong focus on luxury skincare and organic products, reflecting the preferences of its affluent and environmentally-conscious population. By 2024, luxury products accounted for an estimated 45% of all cosmetics sales, with this share expected to grow further by 2025. Additionally, there is a sustainability focus reshaping the market, as consumers increasingly demand eco-friendly packaging, clear information about ingredients, and socially responsible practices from manufacturers.

Source: Statista, 2024

In the Swiss cosmetics market, several key players stand out for their role in importing and supplying ingredients. DSM-Firmenich is a global leader in nutrition, health, and beauty, offering a wide range of solutions, including natural and renewable components, for the cosmetics industry. Givaudan, a Swiss multinational company, specialises in flavours, fragrances, and active cosmetic ingredients, serving as a major supplier to global beauty brands. Clariant, another prominent Swiss company, focuses on specialty chemicals and provides innovative cosmetic ingredients that enhance product performance and sustainability.

Italy is an interesting market for natural ingredients for cosmetics

Italy offers substantial opportunities for suppliers of natural cosmetic ingredients. As the third-largest cosmetics market in Europe, valued at €12.5 billion in 2023, the Italian cosmetics industry has shown significant growth. Between 2022 and 2023 the market grew by 9.4% and this positive trend is expected to continue in the coming years.

Italy is also home to a large number of cosmetics-manufacturing SMEs. It has the second-highest number in Europe with 952 companies. This indicates a strong production capacity and demand for ingredients. Exports play a key role in the Italian cosmetics market, accounting for 40% of the industry’s turnover. In 2023, exports grew by 10%, further driving the sector's expansion. Remarkably, more than 67% of the makeup consumed in Europe, and 55% globally, is produced by Italian companies. The largest segments of the market are skincare (36%) and decorative cosmetics (20%). In 2023, Italy ranked sixth in Europe in per capita cosmetics consumption, with an average of €212 per person. The Italian cosmetics industry is increasingly focused on sustainability, paying more attention to environmental and social factors.

Source: CTPA from Cosmetics Europe’s Market Performance Report, 2022

Italy also ranks sixth in Europe for imports of vegetable and essential oils, holding a 6.2% share of total European imports of these natural ingredients. In 2023, Italian vegetable oil imports reached 28,296 tonnes (€110 million), growing at an annual average rate of 18.5% over the past five years. Around 24% of these imports came from developing countries, with Kenya, India, Mexico, Colombia, and Peru as the main suppliers. Essential oil imports totalled 1,114 tonnes (€42 million) in 2023, with 9.7% from developing countries like Brazil, Mexico, Egypt, India, and the United Arab Emirates. The essential oil market has remained stable, with a slight annual decline of -0.9% between 2019 and 2023.

Key players in the Italian market include Esperis and Altromercato, both recognised for their role in importing natural ingredients for the cosmetics industry. Esperis S.P.A focuses on producing and distributing natural ingredients for the cosmetics and pharmaceutical industries. Their product range includes essential oils, vegetable oils, plant extracts, etc. Altromercato is Italy's leading fair trade organisation, committed to ethical and sustainable trade practices. Altromercato works directly with producers in developing countries to import a variety of products, including natural ingredients for cosmetics.

4. Which products from developing countries have the most potential in the European natural ingredients for cosmetics market?

European demand for natural ingredients for cosmetics has been increasing for years, particularly after the COVID-19 pandemic where a wellness trend became the norm. Brands in the cosmetics sector are innovating more, both in the final products and in the ingredients they use. Consumer demand for natural products creates significant opportunities for different natural ingredients.

The natural ingredients with the greatest potential in the European cosmetics market are active ingredients, vegetable oils, essential oils, and botanical extracts. These ingredients stand out because there is a significant and growing demand for them from both consumers and manufacturers.

While in most cases it is not possible to quantify the actual demand for ingredients due to limited data, there are alternative sources from which some conclusions can be drawn about the market potential. One useful source is published by in-cosmetics global, the most important trade fair for cosmetics ingredients in Europe. In the post-show review of the 2024 edition, in-cosmetics published data about the types of cosmetics ingredients that visitors were the most interested in (see table 3). 

Table 3: Product category interest among visitors to in-cosmetics 2024

Source: in-cosmetics global Post Show Report, 2024

With 78% of visitors expressing interest, the ingredients and raw materials category was the most prominent at the trade show, reflecting key trends not only in the European market but also globally. The results clearly indicate a growing demand for raw materials, presenting significant opportunities for exporters of natural ingredients aiming to enter the European market. Exporters can capitalise on this trend by offering a diverse range of high-quality, natural ingredients that meet strict European standards and cater to various formulation needs within the industry.

Oils and butters

Vegetable oils and butters are key components of cosmetic products. They are used for their moisturising properties and to create emulsions that enable other active and/or functional ingredients to be incorporated in cosmetic products.

Oils and butters have the most potential since there is always interest in vegetable oils in the European market, especially in new oils and those with strong social and environmental credentials. Overall, European demand for vegetable oils has grown recently. Olive oils are in greatest demand, followed by crude sunflower and safflower oils, which show exponential growth. It is important to note that it is not known exactly what portion of these oils is used in the cosmetics industry.

Table 4 presents some of the vegetable oils most used in cosmetics, listed by HS code. Many vegetable oils used in cosmetics have specific geographic origins. For example, shea butter is supplied mainly from Ghana and Burkina Faso, while avocado oil often comes from Mexico, argan oil from Morocco, and rosehip oil from Chile or South Africa.

Table 4: Examples of vegetable oils used in cosmetics, listed by HS code

Source: Fair Venture Consulting, 2024

Though some vegetable oils have their own specific HS code, such as olive oil and cocoa butter, most vegetable oils are grouped together under HS code 151590. When looking at data on imports and import values, it is not possible to identify specific import quantities of individual oils grouped under this code. Nor is it possible to know how these oils are used by the cosmetics industry.

Besides these vegetable oils there are many others available worldwide that can be used in cosmetics. Safety is generally not a concern as all vegetable oils have the same chemical composition. The most important considerations are reliability and price. All oils have good potential for cosmetic products, but it is a good idea to include a range of both established and new vegetable oils in your portfolio.

An example of a European company specialising in the import and distribution of vegetable oils is Sigma Oils Seeds in the Netherlands. This company is well known throughout Europe and offers organic or conventional oils, as well as their derivatives. Sigma Oil Seeds sources mainly from the African continent and seeks to improve organic supply chains in rural areas.

Shea butter

One of the most important vegetable oils used in cosmetics is shea butter. Shea butter is a very effective moisturiser and is very competitive in price thanks to its use as a cocoa butter equivalent and use in foods. Shea butter is also a popular natural ingredient in cosmetics. Its commercialisation brings major social benefits to people involved in the early stages of the value chain, especially women involved in collecting nuts and processing the butter.

Shea butter is extracted from shea nuts harvested from shea trees, which grow across 21 countries in Africa, known as the ‘shea belt’. Two of the leading shea butter suppliers are Ghana and Burkina Faso. The food industry uses approximately 90% of all the shea nuts processed into shea butter, with the remaining 10% used in the cosmetics industry.

Figure 11: Shea nuts and butter

Source: Shutterstock, 2023

Most imports recorded under HS code 151590 from Ghana and Burkina Faso are assumed to be shea butter. In 2023, both countries exported about €95 million to Europe. As 10% of these imports are used in the cosmetics industry, this makes shea butter one of the most important vegetable oils used in cosmetics. Other main suppliers of shea butter to Europe are Togo, Mali, Benin, Nigeria, Uganda, and other countries in the shea belt. 

Today, many distribution and manufacturing companies import and work with shea butter. For example, Dr. Hauschka, one of the leading cosmetics manufacturers in the German market, sources organic and certified fair trade shea butter from South-West Burkina Faso. Similarly, The Body Shop in the UK has been working with an association of women shea butter producers in Ghana for over 25 years. Other examples of smaller companies include Bazousou and Akoma in the UK.

Looking to the future, shea butter offers good potential for increased use in cosmetic products. To boost demand, you should focus primarily on cosmetics brands and highlight the social benefits of using more shea butter in products, in addition to highlighting its excellent moisturising properties. Shea butter’s relatively low price means it can be incorporated in relatively high concentrations, which can also boost demand. At higher concentrations, consumers will moreover experience more of its moisturising benefits.

Moringa seed oil

Moringa oil is becoming increasingly popular in the European cosmetics market. The oil’s emollient and skin conditioning properties are highly valued, but it is also associated with anti-aging and detoxifying properties. 

Moringa oil contains several antioxidants, omega fatty acids, collagen, and vitamins A and E. The healthy properties of moringa as a health food boost interest in moringa oil for use in cosmetics. This is especially true for cosmetics associated with well-being, such as skincare and massage products. These products offer the best application for the healthy properties of moringa.

Moringa oil is extracted from the seeds of the Moringa oleifera tree, which is cultivated extensively throughout the (sub)tropics and grows best in arid conditions. It is adaptable to areas that have hot temperatures and  low precipitation rates. Moringa trees are considered a sustainable and more environmentally-friendly crop.

India is the main supplier of moringa, accounting for around 80% of the world's moringa supply. In addition to India, other countries such as South Africa, Ghana, Mozambique, Kenya, Zambia, Philippines, Pakistan, Brazil, and Peru have important commercial moringa production industries.

Moringa oil is already present in the European cosmetics industry, offered by some companies in cosmetic products for skincare, hair care, and body care. For example, the leading UK cosmetic manufacturer The Body Shop formulates some of its products with moringa seed oil, which it buys directly from a local company in Rwanda. Likewise, Natural Poland, a leading wholesale distributor, includes moringa seed oil in its range of raw materials for the cosmetics, food, and pharmaceutical industries. The company sources ingredients from various regions around the world. European market demand for moringa oil is growing, as consumer values and preferences continue to move towards a more holistic approach in which beauty encompasses not only physical appearance, but also health and wellness. Moringa oil fits well into this overall context. The UK and Germany are estimated to be Europe’s largest importers of moringa oil, reflecting their large cosmetics markets and strong focus on natural, high-quality ingredients. With the right promotion, this creates good opportunities for moringa oil and its suppliers.

Essential oils

Essential oils are an important component of cosmetics. As well as being added directly to cosmetics, they are also used in the perfume industry and are the foundation of the aromatherapy segment. Essential oils are natural ingredients and, like vegetable oils, can be produced under high social and environmental responsibility standards. European demand for essential oils is rising, driven by increased demand for aromatherapy products. 24% of the visitors to the in-cosmetics trade fair showed an interest in these popular ingredients..

Europe is the leading global market for essential oils. Developing country suppliers play an important role in the supply of essential oils to Europe. In the past five years, nearly 50% of essential oils imported into Europe originated from developing countries, which shows potential for non-European exporters. China, Indonesia, India, and Turkey are the main developing country exporters of essential oils to Europe, accounting for 56% of the value of European imports from developing countries. France, the United Kingdom, Germany, and Spain are the main European importers of essential oils from developing countries.

As with vegetable oils, there is no specific data available on the use of essential oils in cosmetics. Many of the HS codes for essential oils cover a whole group of essential oils. In the case of HS 330129, we can make an educated guess about trends and demand as it includes many essential oils that are used more in cosmetics than in food. However, it is important to note that HS 330129 does not cover all essential oils used in cosmetics.

Table 5 below shows essential oils commonly used in cosmetics and which therefore offer opportunities in this market. Of this list of 34 essential oils, which represent around 10% of all commonly-known essential oils, only four are not classified under HS code 330129.

Table 5: Examples of essential oils used in cosmetics, listed by HS code

Source: Fair Venture Consulting, 2024

Many essential oils are specific to a particular region. This means you must work out which essential oils can be produced in your location before you can develop a strong value proposition for the European market. Some plants used in essential oil production, such as rose and clary sage, are grown in Europe. Germany is the largest European producer of essential oils, followed by France. Other producers include Italy, Spain, and Bulgaria. Suppliers in developing countries should focus on niche essential oils that cannot be grown in Europe.

Furthermore, while demand for essential oils remains high, interest in new essential oils is low. The 300+ essential oils that are commonly traded cover existing market needs for both pure essential oils and for derivatives used in fragrances and flavours. New essential oils are always subject to strict safety testing before they can be used.

The European Federation of Essential Oils (EFEO) represents producers and traders of essential oils and related products in Europe. Its members list includes more than 200 companies working specifically with essential oils and other natural ingredients for cosmetics. Some of these companies such as Ultra International B.V. in the Netherlands and Matieres Premieres Essentielles in France buy their ingredients and raw materials directly from developing countries.

Plant extracts

Apart from the plant extracts used as active ingredients, there is also a wide range of other plant extracts with potential uses in cosmetics. Though mainly used as functional ingredients, such as thickeners, they may also have cosmetic benefits such as natural exfoliation. They also fit with the upcycling trend to find uses for by-products from the processing of the primary product. There is no published statistical data on the use of plant extracts in cosmetics. 

There are several HS codes that can be used to study trade data. The most relevant codes are:

• HS code 11 (products of the milling industry);
• HS code 12 (oilseeds and oleaginous fruits); and,
• HS code 13 (lac, gums, resins, and other vegetable saps and extracts). 

However, unlike HS codes 151590 and 330129, which are more closely tied to the cosmetics industry, data on plant extracts cover use by not only the cosmetics industry but also the food industry and pharmaceutical industry. It is not possible to isolate data about the cosmetics industry use and, as a result, draw meaningful conclusions about this demand. Many of the product sub-categories in all three HS code groups include natural ingredients that can be used in cosmetics, especially cereal and legume flours (HS codes 1102 and 1106) for face and body masks, and vegetable (plant) extracts under HS code 1302.

It is not common for European buyers to purchase finished plant extracts from suppliers in developing countries, but rather to import raw materials and process them locally to maintain control over quality and customisation. Some examples of European botanical extract suppliers that import ingredients from developing countries are Plantex and EPO Srl. Plantex, based in France, focuses on sourcing natural ingredients in a sustainable and responsible way. Plantex offers a wide range of organic and conventional plant extracts for the beauty sector. The company works with local partners in developing countries, such as Madagascar and Brazil, to import raw materials while supporting local communities. EPO Srl, an Italian company, has been producing botanical extracts since 1933. They buy plants from around the world, including developing countries, to produce high-quality extracts for the food, pharmaceutical, and cosmetics industries.

Active ingredients, particularly antioxidants

Active ingredients are very interesting ingredients for the European cosmetics industry. They are used mainly in skincare products to deliver several benefits to users. Examples of active ingredients include antioxidants and probiotics.

According to industry sources, one of the most important cosmetic properties that companies are looking for in active ingredients is anti-ageing. Substances that reduce visible signs of ageing are antioxidants. Active ingredients and antioxidants are the second and fourth most popular choices in Table 3. Examples of antioxidants are:

• vitamin C
• vitamin A
• vitamin E
• co-enzyme Q10
• niacinamide
• asiatic acid

Plants are the most common sources of antioxidants. However, most plants are toxic, making it important to pay careful attention to the maximum safe concentrations of extracts in cosmetic products and ingredient efficacy in relation to concentration. Generally, these extracts are used in low concentrations in cosmetic products for reasons of safety, efficacy, and cost.

Other active ingredient claims include anti-inflammatory, chemical exfoliating, and general skin and hair conditioning properties. Medical and therapeutic claims are not permitted for cosmetic products.

Currently, many manufacturing companies extract active ingredients in Europe from raw materials. However, active ingredients can also be exported from developing countries, just as the South African company Zuplex does. Although it can be a challenge for exporters, SMEs can benefit greatly from the export of these ingredients, as they provide added value and ownership of the claims. Some examples of European companies specialising in the import of active ingredients and antioxidants are DSM Firmenich, Givaudan - Active Beauty, and Lipoid Kosmetik.

Natural emulsifiers

Emulsifiers are key ingredients used in cosmetic products, allowing the oil and water phases to blend into stable products. They play a crucial role in creams, lotions, and other products by ensuring a consistent texture and preventing the ingredients from separating over time. There is a wide range of emulsifiers, from natural to synthetic.

Synthetic emulsifiers are produced by chemical reactions of various raw materials such as fatty alcohols and fatty acids, ethylene oxide and other organic compounds. They are often more efficient and provide consistent quality. Natural emulsifiers, derived from natural sources, have gained popularity in the cosmetics industry. Examples include lanolin and beeswax. However, natural emulsifiers can be more vulnerable to microbial contamination, making it necessary to add a preservative to the formulation.

Beeswax

Beeswax (Cera Alba) is one of the oldest cosmetic ingredients and is widely valued for its skincare benefits and versatility. This natural wax is secreted by the worker bees of Apis mellifera and has been used in cosmetics for centuries. Classified as a substance of animal origin, beeswax plays a significant role in the cosmetics industry, with approximately 40% of global beeswax trade dedicated to cosmetic use.

Beeswax offers several desirable properties for cosmetic products, acting as a natural emulsifier that binds oil and water, as well as a non-gelling thickener and viscosity enhancer. Its ability to lock in moisture, along with its anti-inflammatory, antioxidant, and antibacterial properties, makes it an ideal ingredient for a variety of skincare products.

Figure 12: Blocks of beeswax

Source: Unsplash, 2024

Europe stands as the largest importer of beeswax, consistently accounting for over half of global imports. In 2023, European imports of beeswax, other insect waxes, and spermaceti totalled 14.7 thousand tonnes (€56 million). While trade data groups beeswax with other insect waxes, beeswax dominates this category.

This reliance on imports creates substantial opportunities for developing countries to enter and expand in the European market. Tropical countries are global leaders in beeswax production and export, benefitting from beekeeping practices that allow the harvesting of both honey and beeswax. China is the top supplier to Europe, providing 63% of the region's beeswax imports, followed by Vietnam, Tanzania, and Togo.

5. Which products from CBI countries have the most potential on the European natural ingredients for cosmetics market?

The countries on the CBI list generally offer great potential for entering the European market for natural cosmetic ingredients. Most of the 24 countries prioritised by the CBI are producers of some of the most popular vegetable oils and essential oils in demand by the cosmetics industry in Europe.

The following tables show the natural cosmetic ingredients with the greatest potential in the European market and the countries identified by the CBI where these ingredients are already produced. The choice of ingredients was made based on input from experts in the cosmetics industry. This analysis considered two main factors: 1) the popularity of the ingredient in the cosmetics industry and 2) the distribution of production in the CBI countries, looking for widespread availability in these origins. It is worth noting that the first ingredients in the table are those with the greatest potential.

Table 6: Top vegetable oils from CBI countries with the highest potential in the European market

Source: ProFound & Fair Venture Consulting, 2024

In the case of essential oils, there are some specific countries on the CBI list like Indonesia and Sri Lanka that are major producers of essential oils and already have a reputation as suppliers. As such, it was decided to prioritise the popular ingredients produced by these countries as they have a relevant advantage.

Table 7: Top essential oils from CBI countries with the highest potential in the European market

Source: ProFound & Fair Venture Consulting, 2024

ProFound – Advisers In Development carried out this study in partnership with Fair Venture Consulting on behalf of CBI.

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