Market Status and Competitive Landscape Analysis of The Natural Plant Extracts Industry

2025-02-04

The plant extract industry uses plant resources as raw materials, and the upstream of its industrial chain is mainly connected to the plantation industry, while the downstream is widely involved in a variety of fields, such as food, health food, food additives (e.g., spices and natural colors), daily chemicals, pharmaceuticals, pet food, feed and agriculture (e.g., biopesticides). The industry has a deep history in China, dating back to the traditional Chinese herbal medicine industry. In the past, herbs were often boiled to extract their active ingredients and then made into tonics for therapeutic purposes. However, with the rapid advancement of modern technology, the plant extraction industry has gradually moved towards industrialization. The discovery of Artemisinin, a major achievement, not only saved the lives of countless malaria patients, but also marked a new stage in the history of the plant extraction industry.

Since the 1980s, with the “respect for nature, back to nature” concept increasingly popular, plant extract industry in Europe and the United States gradually emerged as a new industrial trend. China's plant extract industry began to emerge from the 1990s, and now stands firmly in the key position of the health industry chain, its market scale continues to grow. 2016, the issuance of the “Healthy China 2030” planning framework for the prosperous development of China's plant extract products injected new vitality. The Outline clearly sets out five major goals by 2030, which include the sustained improvement of people's health, the effective control of major health risk factors, the significant enhancement of health service capacity, the substantial expansion of the scale of the health industry, and the continuous improvement of the health promotion system. The realization of these goals will undoubtedly provide a broad space and strong impetus for the further development of plant extract products in China.

The plant extraction industry is closely related to the acquisition of plant raw materials, so the industry exhibits certain geographical, seasonal and cyclical characteristics. The cyclical fluctuations in the prices of upstream raw materials have a significant impact on the prices of plant extract products. In China, the plant extract industry is highly marketized, with a large number of enterprises in the industry, but with large differences in enterprise scale and relatively low overall industry concentration. However, as health needs continue to grow, these needs are increasingly characterized by individualization, diversification and multi-level. In order to adapt to these changes in the market, advantageous enterprises are promoting their transformation and upgrading through innovation, optimizing their products and business structure, and thus significantly improving their core competitiveness. This has led China's plant extract industry to gradually move towards the path of high-quality development, and is expected to continue to maintain a rapid growth momentum, with enormous room for development.

At present, there are a large number of enterprises in China's plant extract industry, but most of them are small in scale and relatively low in technology and management level, resulting in limited varieties of production and sales, and the overall industry concentration is not high. However, with the increasing improvement of industry regulation, standardization of plant extract standards and consumers' increasing demand for quality, the industry is gradually getting rid of the low-threshold disordered competition and turning to rely on quality and technology-driven benign development track.

In this process, the leading enterprises with good brand reputation, strong technical innovation ability and strong financial strength will gradually emerge, and their market share will continue to increase, thus leading the healthy and sustainable development of the industry. It is worth noting that there are many varieties of plant extracts, more than 300 varieties have entered the field of industrial extraction, the market size of individual varieties is roughly between ten million and several billion dollars. As the market size of these individual products is not large, there are not many enterprises with strong comprehensive strength in their respective markets. However, the leading enterprises, with their scale, technology and management advantages, can rapidly expand their market share, which in turn prompts more and more individual products to gradually form a monopolistic competition or oligopolistic market pattern.

By industrially extracting the active ingredients from Chinese herbal medicines, Chinese medicine extracts ensure the quality of the raw materials of Chinese medicines and promote the standardization of the production of Chinese medicines, as well as reduce costs, which is in line with the direction of the national health care reform. Under the guidance of the theory of Chinese medicine compounding, the ingredients can be accurately measured and evaluated, thus promoting the development of modern Chinese medicine and enabling the valuable heritage of Chinese medicine to go global faster for the benefit of people around the globe.