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Natural Fatty Acids Market - Forecast(2023 - 2028)
Natural Fatty Acid Market Overview
Natural Fatty Acid market size is forecast to reach US$21.5 billion by 2027, after growing at a CAGR of 5.8% during 2022-2027. Fatty acids are carboxylic acids that are the structural components of many lipids. They may be saturated or unsaturated. Most fatty acids are unbranched and contain an even number of carbon atoms. Unsaturated fatty acids have lower melting points than saturated fatty acids containing the same number of carbon atoms. Natural fatty acids are naturally occurring esters of glycerol found in fats and fatty oils and are obtained by hydrolysis of natural fats and oils. Natural fatty acids get converted into products based on oleo-chemicals after getting consumed which are bio-degradable and renewable. Majorly natural fatty acids are synthesized from animal fats, vegetable oil, or from the fractional distillation of crude oil. The sources from which natural fatty acids are obtained are crude oil, palm, coconut - palm kernel oil, and soybean oils. The major types of natural fatty acids include Lauric Acid, Palmitic Acid, Stearic Acid, and Oleic Acid. Natural fatty acids are used in several end-user industries such as personal care, rubber, plastics, detergents, and others. Fatty acids serve important functionality in personal health care and are responsible for human nutrition. Furthermore, the flourishing Personal and Homecare industry is also expected to drive the Natural Fatty Acids industry substantially during the forecast period.
COVID-19 Impact
Currently, due to the global pandemic, Covid-19, the demand for fatty acids decreased due to various economic restrictions and regulations. And due to these strict lockdown measures, many fatty acid units had to stop their production process, which restricted the fatty acid market growth in 2020. In addition, due to the outbreak, the production and export of edible oils decreased, owing to which the demand for fatty acid also decreased, causing a significant decline in the fatty acid market revenue. Furthermore, because of the covid-19 epidemic, the production, consumption, imports, and exports of fatty acid were also hindered. These multiple consequences of the covid-19 pandemic stretched the troubles for the Fatty Acid market in 2020. However, the demand for Fatty Acid is set to improve by the year-end of 2021, owing to the boosting personal and home care sectors.
Report Coverage
The report: “Natural Fatty Acid Market – Forecast (2022-2027)”, by IndustryARC, covers an in-depth analysis of the following segments of the Natural Fatty Acid Industry.
Key Takeaways
- The Asia Pacific dominates the Fatty Acid market, owing to the increasing home care cleaning and industrial cleaning sector in the Asia Pacific region. The increasing per capita income and evolving lifestyle of individuals coupled with the rising population are the major factors expanding the fatty acid market in the region.
- Government regulations promoting the use of eco-friendly products among various end-use industries such as agrochemicals, personal care, and plastics are supporting the market growth for fatty acids.
- The increasing usage of plastics and rubber products globally is also one of the major factors driving the fatty acids market between 2021-2026.
- The antibacterial, antifungal, and antiviral properties of natural fatty acids make it widely popular for use in the household, cosmetics, and personal care market.
- Hence, with the growth in the production of personal care and cosmetic products, the use of natural fatty acids will also continue to grow during the forecast period.
Figure: Asia-Pacific Natural Fatty Acid Market Revenue, 2021-2027 (US$ Billion)
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Natural Fatty Acid Market Segment Analysis – By Fats
The Unsaturated segment held the largest share of 54% in the Fatty Acid market in 2021. Unsaturated Natural Fatty acids have one or more carbon-carbon double bonds in their composition. Unsaturated Natural fatty acid plays an important role in the synthesis of Polyunsaturated fatty acids (PUFAs). Unsaturated Natural fats are generally extracted from avocado, nuts, and soybean, canola, and olive oil among others. Unsaturated fatty acids are also preferred as an important component in diet and they help to reduce the risk of heart disease and lower cholesterol levels. These are some of the major factors supporting the market growth for the unsaturated fatty acids segment during the forecast period. The Unsaturated fatty acid segment is expected to grow at a high CAGR of 5.2% in the global Natural fatty acid market.
Natural Fatty Acid Market Segment Analysis – By Source
The Palm Oil segment held the largest share in the Natural Fatty Acid market in 2021 and is growing at a CAGR of 3.7% during 2022-2027. The rising demand for biofuels across the geographies will have a positive impact on global palm oil consumption. Biodiesel has gained huge prevalence among customers as an efficient alternative to diesel over the past couple of years. With regards to feedstock, palm oil is the conventional feedstock for biodiesel manufacturing and is considered a low-cost substitute to soybean. Since the beginning of 2020, numerous policies that have been imposed in various countries are likely to change the end-user trends of the palm oil market in the long run. Case in point, Indonesia has boosted crude palm oil and diesel fusion to 30% (B30), which will push palm oil usage in the country. Similarly, France has suspended biofuel tax, a move that would shift its economic structure toward biodiesel or biofuels.
Natural Fatty Acid Market Segment Analysis – By Type
The Stearic Acid segment held the largest share in the Natural Fatty Acid market in 2021 and is growing at a CAGR of 5.6% during 2022-2027. Currently, the types of fatty acids which are majorly used across the globe are stearic acids (18 Carbon Chain), fractionated fatty acids, polyunsaturated acids (including tall oil fatty acids), distilled fatty acids, and oleic oil. These Natural Fatty acids are carboxylic acids that are structural components of fats, oils, and all other categories of lipids, except steroids. More than 70 have been identified in nature. They usually contain an even number of carbon atoms (typically 12–20), are generally unbranched, and can be classified by the presence and number of carbon-to-carbon double bonds. Thus, saturated fatty acids contain no carbon-to-carbon double bonds, monounsaturated fatty acids contain one carbon-to-carbon double bond, and polyunsaturated fatty acids contain two or more carbon-to-carbon double bonds. Stearic acid is mainly used in the production of detergents, soaps, and cosmetics such as shampoos and shaving cream products. Detergents are obtained from amides and quaternary alkylammonium derivatives of stearic acid. It is well used in Lubricants, softening, and release agents. Furthermore, the demand for Stearic Acid can be seen in almost every big core industry, which contributes to increased business growth.
Natural Fatty Acid Market Segment Analysis – By Application
The Soaps and detergents segment occupied the largest share in the Natural Fatty Acid market in 2021 up to 38%. Fatty acids are widely used as an anti-foaming agent in the household and industrial cleaning market. Thus, growing awareness about the importance of hygiene has led to robust growth in demand for household and industrial products which is also growing the consumption of fatty acids during the forecast period. Additionally, fatty acids and oils are used for industrial floor cleaners and floor polishes because of their wetting, emulsifying and cleansing properties which also act as a driving factor for the fatty acid market growth. According to the International Association of the Soap and Detergent Industry, the Soap Industry on a global scale is Booming, whether or not the Covid-19 Pandemic, the industry shall remain a top-notch as it a daily essential. This will further increase the demand for fatty acids in the Indian market.
Natural Fatty Acid Market Segment Analysis – By End-Use Industry
The Homecare and Cleaning segment held the largest share in the Natural Fatty Acid market in 2021 and is growing at a CAGR of 4.8% during 2022-2027, due to the impact of Covid-19 Globally. Natural fatty acids' antibacterial, antifungal, and antiviral properties make them widely popular for use in the household, cosmetics, and personal care market. Besides, fatty acid provides an opacifying effect and consistency and increases the thickness of the product. Hence, such properties of natural fatty acids make them widely popular for use in cosmetics and personal care products. Evolution in consumer lifestyles as a result of rising incomes, increasing urbanization contributing to the increasing consumption of personal care and cosmetic products in the market, and growing awareness about the importance of hygiene have led to the robust growth in demand for home care and cleaning, cosmetics, and personal care products. Hence, with the growth in the production of personal care and cosmetic products, the use of natural fatty acids will also continue to grow during the forecast period. As a result, the growing focus across these regions on the homecare, cosmetics, and personal care industries, the market is projected to fuel the growth of the global Natural Fatty Acid Market over the forecast period.
Natural Fatty Acid Market Segment Analysis – By Geography
Asia-Pacific region held the largest share in the Natural Fatty Acid market in 2021 up to 43%. In this region, the demand for natural fatty acids is widely driven by their increasing application in industries, such as cosmetics and personal care, detergent and soaps, oilfield, and lubricants. The region has been witnessing strong growth in the demand for personal care and cosmetic products, majorly driven by the influence of western culture. This has led to the increased usage of cosmetic products by teenagers, increased awareness of being presentable with growing women employment, and hygiene awareness, owing to which the production of such products has also been increasing in the region. Besides, Asia-Pacific is also the largest producer of products, such as soaps, rubber, and plastics. The production of rubber and plastics has been increasing noticeably in the region with growing usage from industries, such as construction, automotive, and electronics. The construction industry in the region has been witnessing strong growth owing to the growing residential and commercial construction in countries, such as India, China, Indonesia, Singapore, and Vietnam. Besides, automotive production in countries, like India, Malaysia, Thailand, and Indonesia, has also been increasing substantially. With this, the demand for plastic and rubber is expected to increase, which is further likely to drive the demand for the natural fatty acids market during the forecast period. Hence, all such trends in the region are projected to drive the growth of the natural fatty acids market in the coming years.
Natural Fatty Acid Market Drivers
Increasing Demand in Cosmetics and Personal Care Products
Fatty acid provides an opacifying effect and consistency and increases the thickness of the product. Hence, it is widely used in cosmetics and personal care products. According to the Indian Brand Equity Foundation (IBEF), the personal care products market is expected to cross over USD 200 billion by 2020, with Asia-Pacific and Europe taking the leading positions in the market. Evolution in consumer lifestyles as a result of rising incomes and increasing urbanization are contributing to the increasing consumption of personal care and cosmetic products in the market, at present. As the market for personal care and cosmetic products will rise, the use of natural fatty acids will also continue to grow during the forecast period.
C8 Caprylic Fatty Acid Applications are Expected to Increase
Caprylic acid belongs to a class of medium-chained saturated fatty acids. It is also called octanoic acid and is found naturally occurring in dairy products, such as coconut oil and palm oil. Owing to its antibacterial, antifungal, and antiviral properties, caprylic acid is used in the treatment of health problems associated with the overgrowth of yeast, such as candida and thrush. The US Food and Drug Administration is promoting caprylic acid because it liberates fatty acids and has nutritional values. Furthermore, caprylic acid is also used in the perfume industry for the production of esters and in the manufacture of dyes as well.
Natural Fatty Acid Market Challenges
Higher price of sources like cocoa butter and others
Sources of Natural fatty acids are the most important component of the industry. Hence, commodity prices are an important element in determining market strategy. In recent times there has been an increase in the prices of raw materials that are used for fatty acid manufacturing such as cocoa butter, tall oil, soya, coconut-palm kernel and, others, owing to which there is a fluctuation in the pricing of fatty acid as well. Fatty Acids are produced from natural fats and oils by hydrolytic or lipolytic splitting according to Tejimandi an advisory firm. Most of the agro-oils are in the inflationary trend. Palm oil and Palm Fatty Acid Distillate (PFAD) prices continued to rise. They are now up 43-55% on a YoY basis. Copra and coconut oil saw a 2- 5% MoM rise while groundnut oil was up 3% MoM. According to LMC International, raw materials occupy 80% of the total cost of production. Thus, the cost of raw materials is continuously increasing or fluctuating because of factors such as transportation & logistics, increasing demand, and more, which is affecting the price of fatty acids. Thus, the volatility and increase in prices of raw materials such as oils and fats are expected to create a significant challenge for the fatty acids market manufacturers during the forecast period.
Natural Fatty Acid Market Landscape
Technology launches, acquisitions, and R&D activities are key strategies adopted by players in the Natural Fatty Acid market. Natural Fatty Acids top 10 companies include :
- Eastman Chemical Company
- LG Chemicals
- Ashland Inc.
- BASF Corp.
- Emery Oleochemicals
- Ferro Corp.
- Kao Oleochemical
- Oleochem India Pvt. Ltd.
- Timur Oleochemicals
- Akzo Nobel N.V Companies.
Acquisitions/Technology Launches
- In May 2019, The KAO group completed the construction of a new factory of PT Apical Kao Chemicals, a joint venture company of Kao Corporation and Apical Group Limited. The new factory is involved in the production of fatty acids in Sumatra, Indonesia. The Kao Group increased its production capacity, of oleochemical products.