Consumer Product chemicals

Consumer Product chemicals Market Analysis

Consumer products can also be classified as direct sales products. These substances include soaps, detergents, cosmetics, etc. The growth rate of these products ranges between 0.8%-1% of the GDP. Specialty chemicals and commodity chemicals can be used as intermediate products, i.e. they are products that serve as raw materials for other processes. Consumer products on the contrary are the end-product of a particular process. For example, within Europe, roughly 70% of the chemicals produced are utilized by downstream industries to fabricate their end-product.

 These products are sold in small quantities and are hence surrounded by pricing pressures. A company’s supply chain efficiency and operational tactics dictate its ability to release a new product. The growth margin of this industry is eroded by the strict environmental regulations imposed on the chemical production sector. Researchers are making an attempt to synthesize ecologically sustainable consumer chemicals. The growth in the textile industry and the introduction of products like waterless car wash detergents accelerate market growth.

Within this market, consumer chemical companies are looking for cost optimized synergy opportunities and enhanced operational scales. Chemical market research reports help analyze the growing trends and opportunities within this sector. The companies are also focused on entering high growth markets with more product demand in order to increase their revenue generated. Process optimization and integration in terms of energy as well as volume production remains the objective of all companies within this segment. A wide range of companies is trying to implement the concept of process intensification in order to scale up their production.

The reports under this segment help diversify the consumer chemical products segment and delve further into the manufacturing as well as supply chain analysis of the same. The growth in the consumer chemical products market and the opportunities it offers can be analyzed.

North America Consumer Product Chemicals Market Analysis

The North American Chemical market comprises of two key regions, the United States as well as Canada. The chemical industry is one of the top exporting and manufacturing segments within the U.S market. The U.S accounts for 18% of the global chemical shipments. The area is home to 13,000 chemical firms and it produces 70,000+ products. In the year 2017, the U.S chemical industry had a final sales revenue of USD 765 Billion.

The chemical sector accounts for roughly 2.5% of the U.S GDP in the year 2019. According to the American council of chemistry, the industry employed 529,000 people through direct employment and 1.8 Million people through indirect employment. While, the industry suppliers help generate induced employment within the sector. The region invests heavily in research to hereafter withstand barriers like regulatory impositions. The R&D costs for the year 2017 accounted for a value of USD 99 Billion. The chemicals industry is making an attempt to shift from non-renewable sources of energy to renewable ones. Moreover, areas of study like manufacturing scale-up while optimizing emissions are also gaining weightage.

The total FDI in the industry passed USD 700 Billion in the year 2017. Factors like the employment of strong intellectual property rights bolster the number of patents granted within the U.S. The country has strong product identification capabilities coupled with a highly educated workforce which promotes the growth in innovation within this market. The product life cycle associated with the consumer chemicals market is low because of which the industry is reliant heavily on technology innovation as well as product development.

Since the consumer chemical products are supplied directly to customers, the product classification needs to abide by a set of statutory regulations. The Canadian consumer product regulations segment falls under the Canada Consumer Product Safety Act. American consumer products are regulated under the Consumer Product Safety Commission. There are five main regulated classifications which include toxicity, flammability, corrosivity, quick skin-bonding adhesives, and pressurized containers. To aid safety, both governments have also included labels on the products with descriptions and specifications.

Canada is estimated to have the third-largest oil reserve globally. Roughly 97% of the Canadian reserves are located in the western oil sands. The province’s economy is based on its thriving petrochemical sector that is derived from its natural gas reserves. A large portion of the same is also derived from bitumen and heavy oil up-gradation. Based on data gathered between the years 1970 to 2016, it is seen that the Candian consumer products segment accounts for 6-9% of its total revenue.  The growth in the Candian population and, increased demand for consumer chemicals within households drive this market. The rising disposable income within this region has led to an increase in the purchase of high-end consumer chemical products. The consumer chemical sales within the Candian market accounted for a value of USD 122.78 Million in the year 2018. The sales value dropped in the year 2019 to USD 117.51 Million.

Colgate Palmolive is an American multinational company that focuses on the growth and development of consumer chemical products. The company is headquartered in New York City. Colgate Palmolive is a producer and distributor of household, healthcare, personal care, and veterinary products. In the year 2011, the company was the first to be recognized by PETA under the new “working for regulatory change” category. Colgate Palmolive was seeking alternatives to animal testing.

Although, in 2011 it was recognized that Triclosan (an anti-bacterial agent) was used by this company which was proven to be harmful to health as well as the environment. The company withdrew this ingredient from a range of products, but they continued to retain it in their tooth-paste range. Additionally, in 2019 the company was cited as one of the top-10 plastic polluters globally. The use of virgin plastic in packaging was one of the key contributing factors to the same.

Another key player in this market includes Proctor and Gamble. The company is stationed in Ohio, United States and it specializes in the production of consumer goods. Toiletries and personal hygiene products as well as homecare products are some of the company’s leading segments. In the year 2019, the company generated a profit of USD 9.7 Billion and total revenue of USD 67.68 Billion. The revenue increased by a value of 1.27% as compared to 2018.  The company also acquired the consumer health division within the Merck Group in the year 2018 for a value of USD 4.2 Billion.

Europe Consumer Product Chemicals Market Analysis

According to CEFIC, chemical sales generated by the EU accounted for a value of USD 666.56 Billion in the year 2018. The consumer chemicals market accounted for 12.4% of the revenue generated in the same year. The EU generates more than USD 188.76 Billion through exports. The sales within this segment are classified as Home sales, Intra EU exports, and Extra EU exports. The home sales generated a revenue of 13%, while the intra EU sales were up by a value of 58% in the year 2018. The Extra EU sales for the same year was accounted to be 29% of the chemical sales revenue generated. The import sales for the EU grew faster as compared to export sales. The import growth rate reached a value of 9.1% in the year 2018.

The consumer chemicals segment accounted for 16% of the total export value for the year 2018 (USD 190.76 Billion). The chemical imports for the EU accounted for USD 137.44 Billion in 2018. Consumer chemical products were the smallest import segment with a value of 7%. A total trade surplus of USD 53.32 Billion was recorded by the EU chemical industry in 2018. The markets specialty chemicals, consumer chemicals, polymers as well as petrochemicals accounted experienced a trade surplus. While basic chemicals witnessed a trade deficit the same year

The two major clusters trading with the EU are North America and the rest of Europe. The EU’s trade surplus with the rest of Europe accounted for USD 14.16 Billion in 2018. Major trade contributors include the specialty chemicals and the consumer chemicals segment.

The rate of innovation and transformation for the EU’s chemical sector is expected to increase due to the introduction of Industry 4.0. The chemical industry transforms energy and raw materials procured by industries as well as consumers. The cost associated with the energy and raw material segment is hence one of the major contributors to determining the competition within the EU. Most of the energy utilized by chemical industries is in the form of feedstock.

The consumer chemicals forecast states that factors like the rising disposable income within the EU increase the home sales within this region. The rise in product differentiation and investment in research are other factors that contribute to the growth of this segment. The high labor costs and the regulatory, as well as tax burdens within this segment, restrict the growth of this market. The R&D intensity, energy prices, and the exchange rates have strong quantitative links to the competitiveness within this sector. The consumer chemical products segment tries to facilitate the modern lifestyle of roughly 500 Million EU citizens on a daily basis.

Henkle AG and Company is a chemical and consumer product-based company. The organization is stationed at Düsseldorf, Germany. The multinational company has a client base that ranges from industries to consumers. The company operates globally based on three business units, namely: Laundry & Home Care, Beauty Care, and Adhesive Technologies. The company employs 53,000 people globally. The enterprise has successfully executed more than 12,800 projects in more than 50 different countries. The organization has been trying to promote a circular economy by employing a new packing strategy that could be environmentally friendly. In 2011, the company was coined as the sustainability leader in the Nondurable Household Products sector for the fifth consecutive time.

Unilever is another key player in this market. It is a British-dutch multinational company that focuses on the production of consumer products. The company has been headquartered in London, United Kingdom, Rotterdam, and the Netherlands. Unilever is the largest producer of soap globally. The company is spread across 190 different areas. Unilever owns 400 brands and generated a turnover of USD 61.32 Billion in the year 2019. In March 2020, the company announced that it would contribute products worth USD 117.97 Million by donating soap, hand sanitizer, bleach, and food.

Asia Pacific Consumer Product Chemicals Market Analysis

The growing industrialization within emerging markets is one of the key factors contributing to the upsurge in demand for the consumer chemicals segment. The growth of the consumer chemicals market within APAC is due to its large population density. Moreover, due to the rising urbanization, the disposable income of the general middle class has been increasing. Therefore, the purchasing power of the consumers also increases- thus reflecting on the increase in sales value.

Within the consumer products market, the liquid detergents segment is expected to have a growth rate of 5-7%. The liquid detergent market ranges from all-purpose laundry cleaners to specialty cleaners like dishwashers. The raw materials used for the production depends upon the factors like toxicity, the environmental impact of the chemical, cost as well as compatibility with other ingredients. The global market for liquid detergent chemicals is dominated by APAC.

In terms of detergent chemicals, China and India are expected to spearhead the APAC market. The changing lifestyle and increasing adoption of this product in developing countries are expected to be the key reason for the same. Other segments within the consumer chemicals sector include fragrances. The fragrances market is expected to grow with a rate of 4-6% during the forecast period (2020-2028). The global revenue generated by this market is expected to account for a value of USD 9.7 Billion in the year 2020. The average per capita revenue generated accounts for USD 2.22.  

The cosmetics sector is also a segment covered by the consumer chemicals market. The cosmetics segment within APAC is expected to account for a value of roughly USD 126 Billion in the year 2020. The market is anticipated to expand with a growth value of 4-6%. China holds the largest segment within the skincare and sun care market followed by Japan. The rising personal consciousness and increasing purchasing power of the middle class are factors that propel the growth of this market. The rise in disposable income is poised to increase consumption in terms of high margin cosmetic products.

Kao Cooperation is a company founded in the year 1887. The company consolidated 34,743 employees and it is headquartered in Tokyo, Japan. The company deals in the production of chemicals as well as cosmetic products. The subsidiaries of this brand include Kanebo Cosmetics, Molton Brown, KAO USA Inc. KAO Australia installed a photovoltaic system on its rooftop in Linz. This system enables energy integration by supplying twice as much power on a comparative basis. A total of 180 solar modules have been installed on the roof. Moreover, the company has been focusing on making use of renewable sources of energy thus promoting a circular economy.

The L’Oréal Group is a French personal care company based in Paris. APAC contributes to 60% of the skincare segment within this company. The French conglomerate generated a revenue of USD 5.29 Billion through its APAC segment. In the first half of 2020, the profit margin declined by 17.5% in China. The second quarter witnessed a growth of roughly 30%.

Rest of the World Consumer Product Market Analysis