Food and Beverages

Sandalwood Market Report Cover

Sandalwood Market

Sandalwood Market Report Cover

Sandalwood Market Size, Share, Growth & Industry Analysis, By Type (Indian Sandalwood, Australian Sandalwood, Others), By Form (Powder, Liquid), By Application (Personal Care, Aromatherapy, Pharmaceuticals, Sculpture & Furniture, Others) and Regional Analysis, 2024-2031

Author : Ashim L.

Pages : 120

Base Year : 2023

Release : May 2024

Report ID: KR703

Sandalwood Market Size

The Global Sandalwood Market size was valued at USD 358.3 million in 2023 and is projected to reach USD 583.1 million by 2031, growing at a CAGR of 6.36% from 2024 to 2031. The progress of the sandalwood market is driven by the rising demand for natural fragrances and essential oils in the cosmetic and personal care industries. In the scope of work, the report includes products offered by companies such as G. Organica, Ahimsa Oils, Essentially Australia, Haihang Industry Co., Ltd., Mercer International Inc., Puja Perfumery, Quintis (Australia) Pty Ltd., The Amber Trail, Veda Oils, INDIA AROMA OILS AND COMPANY and Others.

Additionally, the therapeutic properties of sandalwood oil find application in aromatherapy and traditional medicines, thus stimulating its use in health and wellness products. The expansion of luxury goods sectors, particularly in emerging markets, further boosts the demand for this high-value commodity. Stringent regulations on sandalwood harvesting, implemented due to its endangered status, create supply constraints that influence the market's premium pricing dynamics while attracting investments for sustainable cultivation practices.

The global sandalwood market is experiencing robust growth and is anticipated to continue to expand at a significant rate. This market is characterized by its diverse applications across various industries, including cosmetics, pharmaceuticals, and aromatherapy. The Asia-Pacific region dominates the sandalwood supply, with Australia and India serving as key contributors. However, sustainability concerns and regulatory restrictions shape the production landscape. Market players include cultivators, oil extractors, wholesale distributors, and end-use product manufacturers, each playing a crucial role in the value chain.

Sandalwood refers to a class of woods from trees in the genus Santalum. The woods are heavy, yellow, and fine-grained, and unlike many other aromatic woods, they retain their fragrance for decades. Sandalwood oil, extracted primarily from the wood and roots of the sandalwood tree, is highly valued in the fields of perfumery, cosmetics, and traditional medicine. The market encompasses the cultivation, harvesting, processing, and sale of sandalwood wood and oil. It includes various species, with Indian sandalwood (Santalum album) and Australian sandalwood (Santalum spicatum) being the most commercially valuable and commonly utilized for product formulation purposes.

Analyst’s Review 

Strategic collaborations and innovations are prominent among manufacturers in the market. Key players are focusing on launching new sandalwood-based products while maintaining the quality of existing products that cater to the growing consumer demand for natural and sustainable options. Furthermore, efforts to secure certifications for ethical sourcing and environmental stewardship are prominent. These developments enhance product portfolios and fortify market presence by aligning with consumer values and preferences.

Sandalwood Market Growth Factors

The growing interest in organic and natural beauty products is driving the expansion of the sandalwood market. Consumers increasingly seek skincare and cosmetic products that are free from synthetic chemicals, leading to a surge in demand for natural ingredients such as sandalwood oil. This trend is further supported by growing awareness regarding the skin-enhancing properties of sandalwood, which includes anti-inflammatory and antimicrobial effects that are highly valued in natural cosmetic formulations. In response to this rising demand, manufacturers are incorporating sandalwood oil into a range of products, including perfumes, lotions, soaps, and face creams, thereby fueling market growth.

The issue of over-harvesting and the resulting scarcity of sandalwood poses a significant challenge to market development, which is being addressed through the implementation of stringent regulatory frameworks and sustainable cultivation practices. Governments and international bodies are implementing strict controls on sandalwood extraction to prevent depletion.

To overcome this challenge, the industry is increasingly relying on cultivation rather than wild harvesting. Investments in sandalwood plantations ensures a sustainable supply of this valuable resource. Furthermore, technological advancements in cultivation techniques are improving yield and reducing the time for sandalwood trees to reach maturation, thus addressing both the supply issue and the environmental impact caused by over-harvesting.

Sandalwood Market Trends

The integration of sandalwood into aromatherapy and wellness products is shaping the market landscape. As consumers increasingly prioritize mental health and wellness, the demand for products that offer relaxation and stress relief is rising. Sandalwood's soothing fragrance is highly regarded for its ability to promote calmness and clarity. Moreover, it is being incorporated into essential oils, diffusers, candles, and spa products. This broadens the application spectrum of sandalwood, while also opening up new market segments focused on holistic health, thereby enhancing the demand for sandalwood-based products.

The adoption of sustainable and ethical sourcing practices is another influencing factor contributing significantly to sandalwood market progress. Environmental concerns and ethical considerations are gaining prominence among consumers, prompting companies to demonstrate transparency in their sourcing methods. This includes ensuring that sandalwood is harvested responsibly and sustainably, without harming the environment.

In response, many companies are obtaining certifications and adopting traceability technologies to provide verifiable assurances to consumers about the ethical origin of their sandalwood products. This trend is reshaping consumer expectations and fostering innovations in supply chain management within the sandalwood industry.

Segmentation Analysis

The global sandalwood market is segmented based on type, form, application, and geography.

By Type

Based on type, the market is categorized into Indian sandalwood, Australian sandalwood, and others. The Indian sandalwood segment dominated the market, accounting for a market share of 42.28% in 2023. This growth is primarily fueled by its superior oil content and quality, which is highly prized in both perfumery and pharmaceutical industries. Indian sandalwood (Santalum album) is renowned for its rich aroma and high concentration of santalol, the primary compound responsible for its fragrance and therapeutic properties. As global consumers demand for premium natural products rises, the appeal of Indian sandalwood's provenance, along with its historical and cultural significance, continues to support its market leadership, despite its comparatively higher costs compared to other types.

By Form

Based on form, the market is bifurcated into powder and liquid that caters to diverse industry needs. The powder form is integral in various applications such as cosmetics and incense, where it acts as a base ingredient offering fragrance and skin benefits. Meanwhile, the liquid form, primarily sandalwood oil, is indispensable in perfumery, aromatherapy, and medicinal products due to its concentrated properties. This allows for targeted formulations in various products, enhancing user experience and efficacy. Sandalwood’s versatility in blending with other ingredients further plays a crucial role in expanding their use across different market applications.

By Application

Based on application, the market is divided into personal care, aromatherapy, pharmaceuticals, sculpture & furniture, and others. The personal care segment is projected to exhibit the highest growth, with a robust CAGR of 8.35% from 2024 to 2031. This expansion is fueled by the rising consumer preference for natural and organic personal care products.

Sandalwood's benefits, such as its anti-inflammatory, antimicrobial, and soothing properties, make it highly preferable for incorporation into formulations utilized in skin care, hair care, and beauty products. Additionally, the commercial relevance of sandalwood aligns with the growing premiumization trend in personal care. As consumers continue to seek products that offer both efficacy and sensory pleasure, sandalwood is likely to play a vital role in personal care in the forthcoming years. 

Sandalwood Market Regional Analysis

Based on region, the global sandalwood market is classified into North America, Europe, Asia-Pacific, MEA, and Latin America.

Sandalwood Market Size & Share, By Region, 2024-2031

The Asia Pacific Sandalwood Market share stood around 37.51% in 2023 in the global market, with a valuation of USD 134.4 million, largely due to its favorable environment for sandalwood cultivation, particularly in countries such as India and Australia, which rank among the largest producers globally. Additionally, the longstanding cultural significance of sandalwood in religious and traditional medicinal practices in Asian countries propels domestic consumption and supports regional market growth. Furthermore, Asia-Pacific's economic development is fostering an increase in consumer spending on luxury and personal care products that include sandalwood, thereby reinforcing the region's dominant position in the global sandalwood market.

North America is likely to experience significant growth, recording a CAGR of 7.40% between 2024 and 2031, primarily attributed to increasing consumer awareness and demand for natural and organic personal care products. The region's robust wellness and beauty industries are integrating sandalwood oil into their offerings to capitalize on its therapeutic and aromatic properties.

Additionally, increased environmental consciousness among North American consumers is prompting companies to source sustainable and ethical ingredients, thereby fueling the demand for certified sandalwood products. These factors, combined with strong economic conditions and increasing disposable incomes, are anticipated to stimulate the growth of the North America sandalwood market.

Competitive Landscape

The global sandalwood market study will provide valuable insight with an emphasis on the fragmented nature of the industry. Prominent players are focusing on several key business strategies such as partnerships, mergers and acquisitions, product innovations, and joint ventures to expand their product portfolio and increase their market shares across different regions. Manufacturers are adopting a range of strategic initiatives, including investments in R&D activities, the establishment of new manufacturing facilities, and supply chain optimization, to strengthen their market standing. 

List of Key Companies in Sandalwood Market

  • G. Organica
  • Ahimsa Oils
  • Essentially Australia
  • Haihang Industry Co., Ltd.
  • Mercer International Inc.
  • Puja Perfumery
  • Quintis (Australia) Pty Ltd.
  • The Amber Trail
  • Veda Oils

Key Industry Developments

  • August 2022 (Launch): Quintis Sandalwood established a new sandalwood plantation on previously utilized land in Kununurra, Western Australia. This initiative marked their dedication to sustainability and ethical sourcing practices. The project involved preparing a 326-hectare site and planting over 150,000 Indian sandalwood seedlings, alongside host trees. This effort aimed to sustainably bolster Australia's Indian sandalwood supply, thus addressing environmental concerns and promoting economic growth in the region.

The Global Sandalwood Market is Segmented as:

By Type

  • Indian Sandalwood
  • Australian Sandalwood
  • Others

By Form

  • Powder
  • Liquid

By Application

  • Personal Care
  • Aromatherapy
  • Pharmaceuticals
  • Sculpture & Furniture
  • Others

By Region

  • North America
    • U.S.
    • Canada
    • Mexico
  • Europe
    • France
    • U.K.
    • Spain
    • Germany
    • Italy
    • Russia
    • Rest of Europe
  • Asia-Pacific
    • China
    • Japan
    • India
    • South Korea
    • Rest of Asia-Pacific
  • Middle East & Africa
    • GCC
    • North Africa
    • South Africa
    • Rest of Middle East & Africa
  • Latin America
    • Brazil
    • Argentina
    • Rest of Latin America
  • Check Icon Additional Company Profiles
  • Check Icon Additional Countries
  • Check Icon Cross Segment Analysis
  • Check Icon Regional Market Dynamics
  • Check Icon Country-Level Trend Analysis
  • Check Icon Competitive Landscape Customization
  • Check Icon Extended Forecast Years
  • Check Icon Historical Data Up to 5 Years
Frequently Asked Questions (FAQ's)
The global market is projected to reach USD 583.1 million by 2031, growing at a CAGR of 6.36% from 2024 to 2031.
The global market was valued at USD 358.3 million in 2023.
The driving factors behind the global market include increasing demand for natural fragrances, therapeutic properties in health and wellness products, expansion of luxury goods sectors, and stringent regulations leading to sustainable cultivation practices.
Top manufacturers of sandalwood are A.G. Organica, Ahimsa Oils, Essentially Australia, Haihang Industry Co., Ltd., Mercer International Inc., Puja Perfumery, Quintis (Australia) Pty Ltd., The Amber Trail, Veda Oils, INDIA AROMA OILS AND COMPANY, and others.
North America is the fastest growing region with the CAGR of 7.40% in the forecasted period (2024-2031) with the market value forecasted to reach at USD 158.1 million in 2031.
By type, Indian sandalwood will hold the maximum share in the sandalwood market with the revenue value of USD 230.5 million in 2031.
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