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The global herbal medicine market size was valued at USD 151.91 billion in 2021 and the market is projected to grow from USD 165.66 billion in 2022 to USD 347.50 billion by 2029, exhibiting a CAGR of 11.16% during the forecast period. The global COVID-19 pandemic has been unprecedented and staggering, with herbal medicine witnessing higher-than-anticipated demand across all regions compared to pre-pandemic levels. Based on our analysis, the global market exhibited a growth of 8.46% in 2020 as compared to 2019.
Herbal medicines are naturally obtained medicines that are used for health and skin. In Asia, Ayurveda and ancient Chinese medicines are mainly used as herbal medicines in various industry applications.
Increased Health Concerns amid COVID-19 Pandemic Helped Market Prosper
The COVID-19 disease was declared a global pandemic by the WHO in March 2020. The pandemic had major impacts on the health and pharmaceutical sectors, which may prevail in the short and long term. There are also short and long-term negative impacts on R&D and manufacturing activities as well as delays in projects/programs unrelated to the core supply chain/data management operations.
On a global level, the impact of medicine shortage varied in retail sales and hospital medicines sales. According to the DARU Journal of Pharmaceutical Sciences, there was around a 100% to 700% increase in medicines used in hospitals for COVID-19, including sedatives, respiratory treatments, and pain treatments, from January 2020. While the whole impact of the global pandemic is still unknown, pharma companies are responding and are trying to recover the lost revenue. COVID-19 being a novel disease, the lack of specific medicine for its treatment has increased consumer focus on improving immunity.
In Asian countries where herbs are easily available, consumers shifted their focus to raw herbs and locally manufactured medicines to increase immunity. Medicines and dietary supplements having herbal tea, turmeric, coriander, cumin, and garlic as their vital ingredient were sold extensively considering the benefit they offer to suppress the attack of COVID-19 on the body. Hence, although the supply chain was disrupted in the first quarter of 2020, with ample amount of herbs in storage and the presence of local manufacturers, the global herbal medicines industry saw an average growth rate during this time.
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Heightened Consumption of Herbal Dietary Supplements
The use of alternative antibiotic medicines, such as herbal products, has been increasing over the last decade. Herbal products are gaining popularity among patients as well as healthcare professionals. According to WHO, almost 10-50% of the population in developed countries use herbal products regularly in some form. The major reason for using herbal products is their better immunity than synthetic drugs. In developing countries, such as China, Japan, India, Vietnam, South Africa, and Bangladesh, herbal medicines are sometimes the only affordable and available treatment option. Consumers mainly opt for these medicines for cough and cold, nervous, gastrointestinal sickness, and painful conditions such as joint pain, rheumatic diseases, and stiffness. This ongoing trend of consuming herbal supplements is expected to offer promising growth opportunities for the market.
Increasing Demand for Herbal Ingredients in Cosmetic Industry Driving Market Growth
The cosmetics industry presents good opportunities for exporters of natural ingredients from developing countries to expand their businesses in developed regions. The demand is increasing for natural ingredients from the cosmetics sector. The major factors driving this demand are the growing consumer awareness about natural cosmetics and the growing focus among cosmetics companies to provide natural herbal alternatives to synthetic ingredients. As the demand for natural ingredients used in cosmetics and toiletries products is growing, this trend is expected to continue during the forecast period. Cosmetic product manufacturers are replacing synthetic chemicals with natural ingredients. This is mainly to adhere to the consumer demand and also in a shift toward sustainable raw materials. Consumer demand for personal care, beauty products, and toiletries that avoid chemicals is expected to help fuel the herbal medicine market growth.
Moreover, robust demand for natural ingredients is expected to provide opportunities for potential suppliers in developing countries. Skincare is the most popular product category, with a wide range of products using natural ingredients. Commonly used herbal natural ingredients include vegetable oils that have functional properties and are beneficial for the body and face. Various plant-based extracts are used for their functional properties. For instance, essential oils are mainly used as fragrances. With the extensive use of herbal ingredients in the cosmetic industry, this factor is expected to prove a major driver for the market.
High Demand for Natural Medicine from Developing Countries Offers Promising Opportunities
Herbal medicines are a vital part of medical treatment in many developing countries. Herbal products and natural preparations are used for almost all minor ailments. In developing and lower-income countries, visits to trained doctors or prescription pharmacists are usually rare and considered reserved for life-threatening disorders. In developing countries, herbs used for medicinal purposes are unprocessed herbs, plants or plant parts, dried, and used in whole or cut form. Herbs are prepared as teas (sometimes as pills or capsules) for internal use and as salves and poultices for external use. As most developing countries have minimal regulation related to the use of herbs as medicines, the expansion of the industry in developing countries is expected to prove to be one of the driving factors for the business.
Strict Guidelines Related to Use of Herbal Medicines as Raw Material in Cosmetic Industry to Restrain Market Growth
There are different guidelines and regulations for imports of herbal and natural products and their use in every country. According to the WHO, many countries lack political will, a legal framework, the capacity to monitor the product's safety and their practice, referral mechanisms between herbal and conventional medical practitioners, information systems, analysis of herbal ingredients, and integration of herbal products into health systems. Owing to the above mentioned reasons, herbal product suppliers and manufacturers face obstacles when they try to gain access to different product markets. The manufacturers or suppliers must also follow various legislations and accept different requirements and diverse standards.
Similarly, for the same products, pharmaceutical companies have to develop different dossiers to present them to different national authorities. International communication between the scientific community and regulators is necessary to develop appropriate regulatory environments for herbal and traditional medicines. This factor may prove to be a major restraining factor for the growth of the global industry.
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Pharmaceutical & Nutraceutical Segment Holds Major Market Share Owing to Increasing Demand for Herbal Products
By application, the pharmaceutical & nutraceutical segment holds the largest herbal medicine market share. This is attributed to the high demand for herbal raw materials from dietary supplement manufacturers and the alternative medicines industry. Consumers are shifting their focus from synthetic medicines to herbal ones after knowing the long-term benefits of herbal products. Dietary supplements, such as herbal protein powders and anti-aging products, are popular product categories in the nutraceutical industry. Increasing demand for herbal products from these industries is expected to sustain in the long-term. This factor will aid the dominance of the pharmaceutical & nutraceutical segment in the global market during the forecast period. The personal care & beauty products segment holds the second highest market share. The main reason for the augmented demand for herbal raw materials in the cosmetic industry is their long-term benefits for hair, face, and skin. As the awareness about the prolonged benefits related to the product is increasing, the sales volume of herbal cosmetic products is also increasing. The food & beverage industry is comparatively new and adapting to the product. Key food manufacturers are entering the market with herbal flavored drinks, juices, and milk products to give customers alternatives to conventional drinks. With innovative product launches in the coming years, this segment is expected to grow with the highest CAGR during the forecast period.
Tablets & Capsules Market to Hold Major Share Owing to its Wide Availability in Global Pharmaceutical Industry
The tablets & capsules segment, based on form, holds the major market share. Several such medicines are available in the form of capsules and tablets in the market. Also, an increasing number of prescriptions mention the consumption of herbal capsules and tablets. With an increasing number of herbal products in the pharmaceutical industry, this segment is expected to remain dominant on the global market during the forecast period.
The liquid & gel segment accounts for the second-highest market share of the market based on form. Liquid and gel products are utilized in the pharmaceutical, nutraceutical, and food & beverages industries. Several market players are launching herbal and turmeric drinks in the liquid category. Moreover, several syrups are made from herbal products and can be used to cure coughs and normal colds. With several products in this category, this segment is expected to grow with a considerable CAGR. Powder form products are usually the protein powders in the nutraceutical industry. With the growing demand for herbal protein powders from the millennial population to the aging population, this segment is expected to grow with the highest CAGR during the forecast period.
Europe Herbal Medicine Market Size, 2021 (USD Billion)
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Europe has the largest cosmetics market in the world and is expected to present good opportunities for new entrants from developing countries. The demand for natural ingredients used in the personal care and beauty products segment is growing simultaneously, and this trend is expected to continue. Adhering to this demand from European countries, Europe is expected to considerably contribute toward the market growth in future. Turmeric is becoming a popular ingredient in the European health products market. It is known for its antioxidant and anti-inflammatory properties, and hence, it is used as a supplement and in medical products to boost the immune & digestive systems and overall health. Most turmeric imported into the EU comes from India but other source countries include Thailand, Madagascar, Peru, and Sri Lanka. A major driver for the demand for turmeric is the increasing lifespan of the European population. Rising health consciousness among the European population will drive regional growth. The popularity of ethnic cuisine in the region makes turmeric a popular spice.
In North America, there is rising awareness among consumers, mainly in the U.S., about health, and there is a shift in the attitude of the people toward nature care products due to a powerful green wave. This is attributed to the perceived pernicious effects on the health of individuals of alternative medicines. This has helped the product to make an impact in the U.S. market.
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The cosmetics markets in Asia and Latin America are also showing significant growth. With increasing internet usage, consumers are getting aware of the prolonged benefits related to herbal products and are keen on using natural & herbal products. Moreover, increasing disposable income in developing countries, such as India, China, Brazil, and countries in Southeast Asia, has been sustaining growth in these markets. South Africa, the UAE, Qatar, Saudi Arabia, Kenya, and Nigeria are some of the developing countries in the Middle East & Africa region and are among some of the major emerging economies in the world. With increasing financial stability of the families in these countries, they are expected to spend more on cosmetic products, and this factor is expected to play a vital role in the market growth in this region.
Patanjali Ayurved Taking Notable Efforts to Capture the Indian Herbal Medicine Business
Patanjali Ayurved is one of India’s major players in the herbal medicines industry. The majority of its products are made from naturally sourced herbal raw materials. It is trying very hard to capture the Indian market and is expected to do so in the coming years. Patanjali’s sales volumes grew by 7% in October-March 2018 and by 22% in April-September 2017. Patanjali has been the biggest disruptor in the FMCG space as the brand is established and consistently growing in terms of both shares and retail shelves. Patanjali’s exponential growth is mainly driven by the novelty factor. In the initial years, toothpaste and honey were the only two categories in which Patanjali mainly expanded its market share. Later it started to expand into herbal soaps and edible oil categories. With such expansion plans, Patanjali is looking forward to making its mark in the Indian industry.
An Infographic Representation of Herbal Medicine Market
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The global market research report provides a detailed herbal medicine market analysis and focuses on key aspects such as leading companies, types, and leading forms of the product. Besides this, the report offers insights into the market trends and highlights key industry developments. In addition to the aforementioned factors, the report encompasses several factors that have contributed to the growth of the market in recent years.
Value (USD Billion)
Fortune Business Insights says that the market was valued at USD 151.91 billion in 2021 and is projected to reach USD 347.50 billion by 2029.
In 2021, the Europe market value stood at USD 69.20 billion.
Growing at a CAGR of 11.16%, the market will exhibit steady growth in the forecast period (2022-2029).
The pharmaceutical & nutraceutical segment is expected to be the leading type segment in this market during the forecast period.
Increasing demand for herbal ingredients in the cosmetic industry is the key market driver.
Herbalife Nutrition Ltd., Nutraceutical Corporation, and Patanjali Ayurved Limited are the major players in the market.
Europe dominated the market share in 2021.
The increasing popularity of herbal products from the nutraceutical industry, mainly in dietary supplements, is expected to drive the product adoption globally.
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