I. Overview of the Plant Extracts Industry
Plant extracts are products formed by extracting and concentrating one or more active ingredients from plants using appropriate solvents or methods, through physical and chemical extraction and separation processes, without altering the structure of the active ingredients. According to the “2021 China Plant Extracts Industry Analysis Report,” more than 300 types of plants have entered industrial extraction. These extracts can be classified into effective single extracts, standard extracts, and ratio extracts based on the content of active ingredients; into acids, polyphenols, polysaccharides, flavonoids, alkaloids, and other components based on composition; into plant oils, tinctures, powders, and crystals based on product form; and into natural colorants, Chinese medicine extracts, extract products, and concentrated products based on their applications. Plant extracts are widely used in industries such as food and beverages, seasonings, pharmaceuticals, health products, cosmetics, and feed additives.
II. Export Scale Analysis of China’s Plant Extracts Industry
Since the 1980s, with the increasing call for “advocating nature and returning to nature,” the plant extracts industry has rapidly developed in Europe and the United States. Leveraging abundant plant resources, China’s plant extracts industry began its development in the 1990s, with more and more Chinese companies exporting plant extracts to Europe and the United States.
As consumer demand for green, natural, and pollution-free products continues to grow, the demand for plant extracts in both domestic and international markets has significant growth potential. According to foreign authoritative institutions, the global market for plant extracts is expected to reach USD 59.4 billion by 2025. As a major exporter of plant extracts, China has still achieved strong growth despite the impact of the pandemic, particularly with a significant increase in exports to the U.S. market.
According to data from China Customs, in 2019, the export value of Chinese plant extracts reached USD 2.372 billion, with a compound annual growth rate of 13.35% from 2010 to 2019. In 2020, the export value of plant extracts from China reached USD 2.45 billion, an increase of 3.6%, with an export volume of 96,000 tons, up 11.0%. Among these, the export value of plant extracts to the North American market grew by 36.8%, and the export volume increased by 49.7%. The U.S. remains China’s largest export market for plant extracts.
III. Industry Status Analysis
As a sub-sector of the health industry, the plant extracts industry is still a growing emerging sector. The marketization of China’s plant extracts industry is relatively high, with numerous companies in the industry, but their sizes vary, and the overall industry concentration is low. Due to the relatively small market scale of individual products, there are few companies with comprehensive strength, and competition in the industry is highly fragmented. As technological progress and market demand increase, more and more companies are leveraging their scale, technology, and management advantages to capture market share, gradually leading to an oligopoly or monopoly structure in the market.
Currently, there are over 2,000 companies engaged in the plant extracts industry in China, most of which are small in scale, with relatively low technical and management levels and a limited range of products. With the improvement of industry regulations and the standardization of plant extract products, competition in the industry will transition from disorderly competition with low entry barriers to a healthy development phase driven by quality and technology. Leading enterprises with good brand reputation, strong technological innovation, and substantial financial strength will stand out, continuously increasing market share and leading the healthy and sustainable development of the industry.
At the same time, the plant extract industry exhibits certain regional, seasonal, and cyclical characteristics, with the price of raw materials fluctuating periodically, which has a significant impact on product prices. With the increasing demand for healthy consumption, consumer demand for personalized, diversified, and differentiated plant extracts is becoming more apparent, and the trend of industry diversification is intensifying.
IV. Growth Models of Leading Enterprises
For leading enterprises in the plant extracts industry, due to the relatively small market scale of individual products, developing multiple product varieties becomes a necessary choice. Companies typically drive growth through the following two models:
- Well-developed Procurement and Sales Network: Companies rely on a robust procurement and sales network as their core advantage, providing one-stop plant extract product services. They offer a wide product line, capable of producing dozens or even hundreds of different varieties.
- Technical R&D and Industrial Production Capacity: Companies focus on technological research and development and industrialized production to provide high-quality, cost-effective products. Their product lines are concentrated on several core large products.
