Natural Fatty Alcohol Market size is forecast to reach $7.7 billion by 2026, after growing at a CAGR of 4.8% during 2021-2026. Natural fatty alcohols are long-chain alcohols that are derived from sources such as tropical oils, animal fats, soft oils, and more. These long-chain alcohols are one of the most prominent aliphatic compounds, which act as non-ionic surfactants and are commonly employed in cleaning materials.
Since petrochemical-based fatty alcohols have significant and harmful consequences, global demand is high for natural fatty alcohols. The rapid growth of the personal care industry has increased the demand for thickeners, emollients, and emulsifiers; thereby, fueling the market growth. Furthermore, the increasing demand for naturally derived ingredients to manufacture the household & industrial cleaning industry is also expected to drive the natural fatty alcohols market substantially during the forecast period.
Natural Fatty Alcohols Market COVID-19 Impact
There is an increasing demand for household and industrial cleaning products due to the emergence of covid-19. Due to the pandemic, the demand for soaps and detergents is substantially increasing. As a precautionary measure against the spread of coronavirus, demand for soaps, hand sanitizers, and other personal care products is growing. The United Nations Children’s Fund (UNICEF) has advised people to wash their hands regularly and to maintain cleanliness and hygiene in the region. And they recommended that the surface be washed using soap or detergent and water. According to the National Centre for Disease Control (NCDC), washing with water and household detergents and the use of common disinfectant products should be sufficient for general precautionary cleaning. Furthermore, on certain surfaces, diluted household bleach solutions can also be used. Since it is one of the best ways to eliminate the novel coronavirus. Thus, the demand for detergents is increasing during the outbreak owing to which there is no major impact of coronavirus on the natural fatty alcohols market. However, natural fatty alcohol manufacturers have announced the suspension of production due to supply chain bottlenecks, and to protect the safety of their employees during the COVID-19 pandemic, which may moderately hinder the fatty alcohols market growth.
Natural Fatty Alcohols Market Segment Analysis – By Application
The household and industrial cleaning segment held the largest share in the natural fatty alcohols market in 2020 and is growing at a CAGR of 5.6% during 2021-2026, owing to the increasing usage of long-chain alcohols derived from sources such as tropical oils, animal fats, and soft oils for cleaning purposes. Due to their amphipathic nature, they act as non-ionic surfactants and are commonly employed in cleaning materials. Natural fatty alcohols are employed as thickeners, emollients, and emulsifiers, with applications in detergents. Due to their good washing efficiency and foaming properties, they serve primarily as primary surfactants in the detergent and cleaning industry and as cleaning agents. Growing natural emulsifiers and surfactants demand in the soaps & detergents industry are projected to be the major driving factor for the natural fatty alcohols based cleaning products and detergents market during the forecast period.
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Natural Fatty Alcohols Market Segment Analysis – By Geography
Asia-Pacific region held the largest share in the natural fatty alcohols market in 2020 up to 39% and is growing at a CAGR of 7.4% during 2021-2026, owing to the increasing usage of aliphatic compounds in various end-use applications, such as personal care and industrial & domestic cleaning application as thickeners, emollients, and emulsifiers. Growing demand for soaps & detergents is expected to drive demand for fatty alcohols, due to population growth and increased disposable income in the region. The market size of India’s skin, cosmetics and grooming market will cross $20 billion from the current $6.5 billion by 2025, according to the India Brand Equity Foundation (IBEF). Thailand’s beauty and personal care goods industry was estimated at approximately $6.2 billion in 2018 and is forecast to hit $8.0 billion in 2022, according to the International Trade Administration (ITA). The beauty and personal care industry in Thailand is projected to rise by 7.3 percent per year from 2019 to 2022. Thus, with the expanding personal care industry, the demand for natural fatty alcohols will also subsequently increase, which is anticipated to drive the natural fatty alcohol market in the APAC region during the forecast period.
Natural Fatty Alcohols Market Drivers
Increase in demand for bio-based and renewable resources-based products
To boost demand for bio-based chemicals, changing customer preferences have been observed. Over the past decade, public consciousness of the environmental effects of harmful petroleum-based goods has increased exponentially. Growing environmental issues are prompting eco-friendly goods to be used by customers. These factors force chemical manufacturers to make use of bio-based raw materials such as tropical oils, animal fats, and soft oils to produce their products. In contrast to their traditional petroleum-based substitutes, oleo-based fatty alcohols are recyclable and less toxic. They are preferred for the processing of ingredients for personal care. These fatty alcohols alleviate problems with skin irritation and breathing and are the preferred alternative in the pharmaceutical & personal care industries. These attributes of natural fatty alcohols provide the potential for high-profit margin gains for producers. The industry trend for the use of naturally derived fatty alcohols derived from sources such as tropical oils, animal fats, and soft oils is expected to be supported by legislation from government agencies, such as REACH, relating to environmental issues associated with petrochemical products.
Increasing Personal Care & Cosmetic Industries
The personal care and cosmetic sector are booming in varied regions due to the increasing demand from consumers. And they are extensively used in personal care products, mainly skin lotions, hair products, and creams, as they help create smoother creams, thicker lotions, and more stable foam products. According to International Trade Centre (ITC), the export value of beauty or make-up preparations for the care of the skin increased from USD 11,686 thousand, USD 3,728 thousand, and USD 173 thousand in 2018 to USD 12,904 thousand, USD 4,681 thousand, and USD 258 thousand in 2019 in Chile, Peru, and Ecuador respectively. According to the Bureau of Labor Statistics (BLS), the average annual expenditure on personal care products and services in the United States increased from $762 in 2017 to $768 in 2018, to finally reach $786 in 2019, an increase of 0.8%, and 2.3% respectively. Since the personal care and cosmetic industries are booming, the demand for natural fatty alcohol is also significantly increasing. Thus, the increasing personal care and cosmetic sector act as a driver for the natural fatty alcohol market.
Natural Fatty Alcohols Market Challenges
Fluctuating raw material prices
Palm oil, PK oil, tallow, and rapeseed oil, among others, are the main raw materials used to produce fatty alcohols. Regions such as North America and Europe import these raw materials from APAC, as they facilitate the processing of raw materials for fatty alcohols due to their geographical conditions. Because of this, rates may sometimes fluctuate between these regions depending on the trading scenario. In addition, the decline in prices of conventional petrochemical-based raw materials of long-chain alcohols made consumers switch to alternative, low-cost, synthetically-derived fatty alcohol. Therefore, the fluctuating raw material price of natural fatty alcohols is expected to act as a restraining factor for the market growth during the forecast period.
Natural Fatty Alcohols Market Landscape
Technology launches, acquisitions, and R&D activities are key strategies adopted by players in the natural fatty alcohol market. Major players in the natural fatty alcohols market are BASF SE, Procter & Gamble, Sasol, Shell Chemicals, Kuala Lumpur Kepong Berhad, Ecogreen, Oleochemicals, Kao Corporation, Willmar oleo, Musim Mass, Emery Oleo, Oxiteno, and Jiahua.
Acquisitions/Technology Launches
In May 2019, a joint venture with Apical Group was completed by Kao Corporation. In Southeast Asia, a new facility, PT Apical Kao Chemical, increased its production capacity of oleochemicals and improved its supply chain. This growth helped to improve the company’s role in the Asia-Pacific region.
Key Takeaways
Asia-Pacific dominates the natural fatty alcohol market, owing to the increasing personal care and cosmetic products industry in the region. The population growth and per capita income is a key factor in the region’s rising personal care and cosmetic products industry.
Fatty alcohols are also a cost-effective alternative for petrochemicals and are biodegradable. To prevent petrochemical dependence and reduce carbon footprint, industries move their emphasis from chemicals derived to bio-based raw materials, which is driving the market growth.
Moreover, during the forecast period, volatile prices, and strict regulations from several government agencies associated with the adverse effects of petrochemical-based fatty alcohols on the environment are expected to increase the demand for natural fatty alcohols.
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