Terpenes Market Size to Reach USD 1,824.2 Million by 2032

Introduction

The global terpenes market is experiencing significant growth, driven by the increasing demand for natural products across various industries, including food and beverages, cosmetics, pharmaceuticals, and more. In 2022, the market was valued at USD 885.1 million and is projected to nearly double to USD 1,824.2 million by 2032, growing at a compound annual growth rate (CAGR) of 7.5% during the forecast period from 2023 to 2032. Terpenes, organic compounds found in plants like cannabis, pine trees, and citrus fruits, are highly valued for their aromatic properties, which contribute to their widespread use in flavoring, fragrances, and therapeutic applications.

One of the primary factors fueling the growth of the terpenes market is the rising consumer preference for natural ingredients over synthetic alternatives. In industries like food and beverages, cosmetics, and personal care, there is a growing trend toward using natural flavors and fragrances, which has significantly boosted the demand for plant-derived terpenes. Additionally, the increasing awareness of the potential health benefits of terpenes, particularly their therapeutic properties, is driving their adoption in the pharmaceutical and wellness industries. For example, terpenes like limonene, found in citrus fruits, and pinene, found in pine trees, are being explored for their anti-inflammatory and anti-anxiety effects, contributing to their growing popularity in natural health products.

However, the market also faces certain challenges. The production of terpenes is heavily dependent on the availability of natural resources, which can be affected by environmental factors and fluctuations in raw material supply. Additionally, the extraction and purification processes can be costly and time-consuming, which may impact the overall cost-effectiveness of terpene production. Despite these challenges, advancements in extraction technologies and increasing investments in research and development are expected to mitigate these issues, making terpene production more efficient and sustainable.

Recent developments in the terpenes market reflect the industry’s focus on innovation and sustainability. Companies are increasingly exploring eco-friendly extraction methods, such as supercritical CO2 extraction, which allows for the efficient and environmentally friendly extraction of terpenes from plant materials. Additionally, the growing interest in cannabis-derived terpenes, driven by the legalization of cannabis in various regions, is opening new avenues for market expansion. The therapeutic potential of cannabis terpenes, combined with their unique flavor and aroma profiles, is attracting attention from both consumers and industry players, further driving the market’s growth.

Terpenes Statistics

It is a terpene glycoside and displays 8 double bonds, 40 hydroxyl groups, and 64 chiral centers, which gives rise to over 1021 possible stereoisomers.
in a study with over 800 drug candidates, only 24% had a molecular weight > 500 Da and only 15% of the candidates had a logP > 5. Notably, only 7.6% of all the molecules violated both rules simultaneously.
Triterpenes are unique in the way they present the lowest percentage of compounds with 0 violations, only 5.2%, while nearly 60% present 1 or 2 violations.
Terpenes are a class of natural products consisting of compounds with the formula (C5H8)n for n ≥ 2. Terpenes are major biosynthetic building blocks. Comprising more than 30,000 compounds, these unsaturated hydrocarbons are produced predominantly by plants, particularly conifers.
The number of terpenes and terpenoids is estimated at 55,000 chemical entities.
Boiling points scale with molecular size: terpenes, sesquiterpenes, and diterpenes respectively at 110, 160, and 220 °C.
By conducting meticulous manual searches and analyzing over 10,000 reference papers, the TPCN database has successfully integrated 6383 terpenoids obtained from 1254 distinct plant species.
In China, around 329 species of medicinal herbs are cultivated on >5.56 million hectares (15).
According to the World Health Organization, the current global market value for medicinal plants stands at $14 billion per annum and will exceed to $5 trillion by 2050 (16).
The yields of the EOs from the nine studied commercial varieties ranged from 0.485% w/w in Pablito to 1.814% w/w in Amnesia Cookies.
Legally cultivated hemp has been selected to keep the psychotropic δ-9-tetrahydrocannabinol (THC) at levels lower than 0.2%

Emerging Trends

Sustainability Focus: One of the most prominent trends is the increasing emphasis on sustainable production methods. Companies are adopting eco-friendly extraction techniques, such as supercritical CO2 extraction, which minimizes environmental impact compared to traditional methods. This shift is driven by growing consumer awareness and demand for environmentally responsible products. As consumers prioritize sustainability, the terpene industry is aligning its practices to meet these expectations, which is likely to enhance market growth over the coming years.
Expanding Applications in Pharmaceuticals: The pharmaceutical industry is emerging as a key driver for the terpenes market. Terpenes are being recognized for their therapeutic properties, including anti-inflammatory, analgesic, and antimicrobial effects. These properties make them valuable in the development of new drugs and treatments, especially as natural alternatives to synthetic compounds. The growing interest in natural health products is propelling the use of terpenes in various pharmaceutical applications, further expanding their market potential.
Dominance in Cosmetics and Personal Care: Terpenes have long been used in the cosmetics and personal care industry due to their aromatic properties and potential skin benefits. This segment remains the largest application area for terpenes, driven by the consumer preference for natural and organic ingredients. Products containing terpenes are valued for their ability to enhance skin health and their use in fragrances, making them a staple in the formulation of skincare and beauty products.
Regional Growth Insights: Regionally, Asia Pacific is expected to lead the global terpenes market, driven by increasing disposable incomes, urbanization, and a growing consumer base that favors natural products. The region’s food and beverage industry, alongside its burgeoning pharmaceutical sector, offers significant growth opportunities for terpene producers. Meanwhile, North America also remains a key market, particularly due to the high demand for natural and organic products in the United States.
Challenges and Opportunities: Despite the growth prospects, the terpenes market faces challenges, particularly regulatory hurdles related to their association with the cannabis industry. Stringent regulations in some countries can hinder market expansion. Additionally, supply chain vulnerabilities, particularly for citrus-derived terpenes, pose risks due to the susceptibility of crops to diseases and environmental factors. However, these challenges also present opportunities for innovation in supply chain management and the development of synthetic alternatives.

Use Cases

Pharmaceuticals: Terpenes are increasingly used in the pharmaceutical industry due to their therapeutic properties. For instance, linalool, a common terpene, has shown potential in reducing anxiety and providing pain relief. Similarly, pinene is known for its anti-inflammatory and bronchodilator effects, making it useful in treatments for respiratory issues. The pharmaceutical application of terpenes is growing rapidly, contributing significantly to the global market. It’s estimated that the use of terpenes in pharmaceuticals could account for approximately 20% of the terpene market by 2028, driven by increasing research into their medicinal properties.
Cosmetics and Personal Care: Terpenes are widely used in the cosmetics industry, primarily for their aromatic properties and skin benefits. They are included in products like perfumes, lotions, and shampoos. Limonene, for example, is valued for its refreshing citrus scent and is commonly found in cleaning products and personal care items. The cosmetics segment currently holds the largest share of the terpene market, accounting for over 35% of the total market revenue in 2022. This is due to the growing consumer preference for natural and organic beauty products.
Food and Beverages: In the food and beverage industry, terpenes are used as natural flavoring agents. Limonene and myrcene are popular for their ability to enhance flavors in beverages, confectioneries, and savory dishes. They are particularly favored for their natural origins, aligning with the clean-label trend in food production. The application of terpenes in food and beverages is expanding, with an estimated growth rate of 7.5% annually. This growth is driven by consumer demand for natural ingredients and the functional benefits terpenes offer, such as their antioxidant properties.
Aromatherapy: Terpenes play a crucial role in aromatherapy, where they are used for their mood-enhancing and stress-relieving properties. Essential oils containing terpenes like linalool and eucalyptol are used in diffusers and massage oils to promote relaxation and improve mental well-being. The global aromatherapy market is expected to reach $5 billion by 2025, with terpenes being a key component in the formulation of essential oils.
Agriculture: Terpenes are also used in agriculture as natural pesticides and insect repellents. For example, limonene is effective in repelling ants and other pests, making it a popular choice in organic farming. The use of terpenes in agriculture is projected to grow by 8% annually, as farmers seek sustainable alternatives to synthetic chemicals.
Industrial Applications: Solvents and Cleaners: In industrial settings, terpenes are used as solvents and cleaning agents due to their ability to dissolve oils and resins. D-limonene, derived from citrus peels, is a widely used solvent in the production of industrial cleaners. The demand for terpene-based industrial cleaners is increasing, with the market expected to grow at a compound annual growth rate (CAGR) of 6.2% from 2023 to 2030

Major Challenges

Regulatory Hurdles: One of the most pressing challenges is the complex regulatory environment surrounding terpenes, especially those derived from cannabis and hemp. Many countries have stringent rules regarding the cultivation, extraction, and sale of terpenes, creating legal ambiguities for businesses operating in this space. These regulations can vary widely between regions, complicating international trade and market expansion efforts.
Supply Chain Vulnerabilities: The production of terpenes is highly dependent on natural sources, such as plants and fruits, making the supply chain susceptible to disruptions. Environmental factors like adverse weather conditions, pests, and diseases can severely impact the availability of raw materials. For instance, citrus greening disease has affected the supply of citrus fruits, a key source of terpenes like limonene. These disruptions can lead to significant price fluctuations and supply shortages, challenging businesses that rely on a steady supply of terpenes.
High Production Costs: Extracting terpenes, especially through eco-friendly methods such as supercritical CO2 extraction, can be costly. The high cost of production limits the scalability of terpene extraction and poses a barrier for smaller companies looking to enter the market. Additionally, the energy-intensive nature of some extraction processes further adds to the overall cost, making it difficult to maintain competitive pricing.
Limited Consumer Awareness: Despite their widespread use, there is still limited awareness among consumers about what terpenes are and their benefits. This lack of understanding can hinder market growth, as consumers may not actively seek out products containing terpenes. Companies must invest in education and marketing efforts to increase consumer knowledge and drive demand.

Market Growth Opportunities

Expanding Pharmaceutical Applications: Terpenes offer significant potential in the pharmaceutical industry due to their therapeutic properties, such as anti-inflammatory, antimicrobial, and analgesic effects. As research into natural and plant-based medicines grows, terpenes are increasingly being explored for their role in developing new drugs and treatments. This expanding application in pharmaceuticals is expected to drive substantial growth in the terpenes market. The sector could see a compound annual growth rate (CAGR) of over 7% as pharmaceutical companies invest more in natural product development.
Growth in the Cosmetics and Personal Care Sector: The cosmetics and personal care industry continues to be a major consumer of terpenes, particularly due to the rising demand for natural and organic beauty products. Terpenes are valued for their aromatic properties and potential skin benefits, making them ideal ingredients for perfumes, lotions, and skincare products. As consumers increasingly seek out products with natural ingredients, the market for terpenes in this sector is poised for steady growth, with projections indicating it could make up to 35% of the total terpene market by 2028.
Sustainability and Eco-Friendly Practices: As environmental concerns become more prominent, there is a growing market for sustainably sourced terpenes. Companies that adopt green extraction methods, such as supercritical CO2 extraction, are likely to gain a competitive edge. This trend aligns with the broader consumer shift towards eco-friendly products, providing an opportunity for terpene producers to differentiate themselves by emphasizing sustainability. The demand for sustainably produced terpenes could boost the market by 6-8% annually as eco-conscious consumers drive this trend.
Innovation in Food and Beverage Applications: Terpenes are increasingly used as natural flavoring agents in the food and beverage industry, catering to the rising consumer preference for clean-label products. Innovations in this area, such as the development of new terpene-based flavors and functional foods, are expected to create significant market opportunities. The food and beverage segment is anticipated to grow at a CAGR of 7.5%, driven by these innovations and the broader clean-label trend.

Recent Developments

Archer-Daniels-Midland Company (ADM) has been actively involved in the terpenes sector, particularly focusing on sustainable production and plant-based chemicals. Throughout 2023 and into 2024, ADM has emphasized its commitment to expanding its portfolio in renewable chemicals, including terpenes, by partnering with other companies and investing in innovative extraction methods. For example, in October 2023, ADM reported advancements in biobased polymer production, which includes terpene derivatives, enhancing their use in various consumer products. The company’s revenue for the first half of 2024 reflected the impact of these initiatives, although there was a decline due to broader market conditions, with revenue down 11.13% year-over-year, totaling $88.77 billion as of June 2024. ADM’s strategic focus remains on leveraging its expertise in natural ingredients to meet growing consumer demand for sustainable and eco-friendly products, positioning itself strongly within the terpenes market.

Givaudan, a global leader in the flavors and fragrances industry, has been making significant strides in the terpenes sector throughout 2023 and into 2024. In the first nine months of 2023, Givaudan reported sales of CHF 5,265 million, with a notable focus on expanding its portfolio in natural ingredients, including terpenes. This growth is particularly evident in its Fragrance & Beauty division, which has been integrating more terpenes into their product offerings to meet the rising consumer demand for natural and eco-friendly products. The company’s strategic emphasis on innovation and sustainability has bolstered its position in the terpenes market, contributing to steady sales growth despite a challenging global economic environment. As of October 2023, Givaudan continues to advance its market leadership by exploring new applications for terpenes in both fragrances and flavors, reflecting a broader trend toward natural product solutions in the industry.

Symrise AG, a global leader in the flavors and fragrances industry, has shown significant growth in its terpenes sector work, particularly through its Aroma Molecules division. In 2023, Symrise reported a robust performance with sales in its Scent & Care segment increasing by 13.7% year-on-year, reaching €516.4 million in the first quarter. This growth was driven by a strong demand for fragrance applications, including terpenes, which are integral in producing luxury and consumer fragrances. The momentum continued into 2024, with the company achieving a 10.9% organic growth rate in the first quarter, supported by increased volumes and strong global demand. Symrise’s focus on innovation and sustainability has positioned it well to leverage opportunities in the terpenes market, contributing to its goal of achieving long-term sales targets of up to €8 billion by 2028.

True Terpenes, a leading provider of precision botanical terpene blends, has continued to strengthen its market position through 2023 and into 2024 by focusing on innovation, quality, and safety. The company specializes in creating terpene profiles derived from non-cannabis botanical sources, allowing them to replicate the aromas and effects of various cannabis strains without using THC. In 2023, True Terpenes launched several new product lines, including live resin-infused terpene blends, which have gained popularity in the vaping and edibles markets. The company also emphasized compliance and safety by adhering to its “True Grade” quality certification, which surpasses many state-level regulations to ensure product purity and safety. Moving into 2024, True Terpenes continues to expand its offerings, targeting key growth areas like infused beverages and pre-rolls, leveraging its advanced lab facilities and a strong commitment to regulatory excellence.

Conclusion

Terpenes continue to play a pivotal role across diverse industries, from pharmaceuticals and cosmetics to food and beverages. Their natural origin and broad spectrum of aromatic and therapeutic properties make them highly valued in formulations that seek to appeal to the growing consumer demand for natural and clean-label products. Innovations in extraction and synthesis technologies have expanded the availability and applications of terpenes, enhancing their appeal and functional benefits in products.

Moreover, the focus on sustainability within the terpenes market is driving advancements in eco-friendly production methods, aligning with global sustainability goals. As regulatory landscapes evolve and consumer awareness increases, the terpenes industry is poised for further growth, driven by continuous research and development efforts aimed at unlocking new applications and improving existing ones. This sector’s future will likely see increased integration into holistic health solutions and more personalized consumer products, reflecting its versatile and dynamic nature.

Sources

https://www.ncbi.nlm.nih.gov/pmc/articles/PMC9961535/
https://en.wikipedia.org/wiki/Terpene
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https://www.ncbi.nlm.nih.gov/pmc/articles/PMC9003298/
https://renewable-carbon.eu/news/supplier/archer-daniels-midland-company-adm/
https://www.givaudan.com/media/media-releases/2024/2023-full-year-results
https://www.marketscreener.com/quote/stock/SYMRISE-AG-534094/news/Symrise-sees-successful-start-into-the-2024-fiscal-year-46524092/
https://trueterpenes.com/