Propionic Acid Market Overview
The
Propionic Acid Market size is estimated to reach US$1.7 billion by 2027, growing at a CAGR of 3.4% during the forecast period 2022-2027. Propionic Acid, also
known as propanoic acid, is a short-chain fatty acid produced through microbial
fermentation. The acid, due to its rich chemical nature and anti-bacterial
properties, finds applicability in pesticides, food preservative agents,
intermediates, solvents and plasticizers. This is influencing the growth of
the Propionic Acid Market. Owing to the rapid increase in agricultural
activities, the consumption of pesticides has shown a significant increase over
the years. According to the Food and Agriculture Organization, global pesticide
consumption stood at 2.66 million tons in 2020, showing a 2.3% increase as compared to the 2019 consumption level. In addition to agriculture, the rapid
developments witnessed by the rubber and cosmetics & personal sectors have
also created a surge in the growth of the propionic acid industry. However,
stringent government regulations regarding chemicals used in pesticides can hamper
the growth of the Propionic Acid Market, thereby negatively impacting the Propionic Acid Market size during the forecast period. Lockdown restrictions
halted the activities of major end-use industries of propionic acid such as
agriculture, food & beverage and rubber, which decreased the market demand for
the acid. This further affected its market revenue as well as the Propionic Acid
industry outlook.
![Propionic Acid Market](https://i.imgur.com/rBdAZXR.png)
Propionic Acid Market Report Coverage
The “Propionic Acid Market Report – Forecast (2022–2027)” by IndustryARC, covers an in-depth analysis of the following
segments in the Propionic Acid Industry.
By Grade: Food
Grade, Technical Grade and Industrial Grade.
By Packaging:
Drums, Bottles and Others.
By Application:
Pesticides, Food Preservative Agent, Plasticizers, Coating Additives, Perfumes,
Intermediates, Solvents and Others.
By End-use Industry: Agriculture,
Food & Beverages (Dairy Items, Non-alcoholic Drinks, Processed Food, Grain
Products and Others), Rubber Industry, Cosmetics & Personal Care,
Pharmaceuticals, Chemical Industry and Others.
By Geography: North
America (the USA, Canada and Mexico), Europe (the UK, Germany, France, Italy, the Netherlands, Spain, Belgium and the Rest of Europe), Asia-Pacific (China,
India, Japan, South Korea, Australia, New Zealand, Indonesia, Taiwan, Malaysia
and the Rest of APAC), South America (Brazil, Argentina, Colombia, Chile and the Rest of
South America) and the Rest of the World (the Middle East and Africa).
Key Takeaways
- Europe dominates the Propionic Acid Market owing
to the rapid increase in food & beverage items production which is creating
a drive in the demand for Propionic Acid as a food preservative agent in the
region.
- The increasing consumption of cosmetic products due to growing skincare awareness has accelerated the demand for propionic
acid for protecting cosmetic products from bacterial growth, which has
positively impacted the Propionic Acid industry outlook.
- The regulations passed by government
organizations to limit chemical usage in pesticides can hamper the demand and
consumption of Propionic Acid in the agriculture sector. This would restrain the growth of the Propionic Acid Market size.
Figure: Propionic Acid Market Revenue Share by Geography, 2021 (%)
Propionic
Acid Market Segment Analysis – by Grade
The industrial grade segment held the largest share in the Propionic Acid Market in 2021 and is
estimated to grow at a CAGR of 3.5% during the forecast period 2022-2027. Industrial-grade propionic acid has rich antibacterial and growth-inhibiting
properties, due to which it is used in agrochemicals such as pesticides.
Moreover, due to its chemical stability nature, the industrial grade also finds
high applicability as an intermediate for rubber production, cosmetics products
and as a food preservative agent in food & beverages. Owing to its high
applicability in these sectors coupled with their growing developments, the
demand and usage of industrial grade are anticipated to increase. This is stimulating its segment growth in the Propionic Acid Market during the forecast
period.
Propionic
Acid Market Segment Analysis – by End-use Industry
The food &
beverage segment held the largest share of the Propionic Acid Market in 2021 and
is estimated to grow at a CAGR of 3.7% during the forecast period 2022-2027.
Propionic acid or propanoic acid has high applicability in the food &
beverage sector as a food preservative agent for dairy items and as artificial
flavors in confectionery. The rapid increase in disposable income and improvement
in living standards coupled with population growth has increased the demand for
items, leading to their high consumption. According to the
National Confectioners Association, in 2021, chocolate sales in the U.S. increased by 9.2% in comparison to the previous year. Furthermore, according to
the USDA’s National Agricultural Statistical Service, in 2021, cheese
production in the U.S. increased by 3.5% in comparison to the previous year, due to its growing demand. Such rapid consumption and production of food items have
accelerated the usage of propionic acid as a food preservative agent and
artificial flavor additive, thereby propelling the growth of the Propionic Acid Market during the forecast period.
Propionic
Acid Market Segment Analysis – by Geography
Europe dominated the Propionic Acid Market in 2021 with a share of up to 37.4%. The food & beverage sector in the region has
witnessed significant growth over the years, resulting from an increase in
government budgets, investment inflows and food consumption. According to
FoodDrink Europe, in Q1 of 2022, food and drink production increased by 3% in
Europe in comparison to Q1 of 2021. Furthermore, according to Eurostat, in
2021, cheese production in the EU stood at 10.7 million tons, showing a 3.8%
increase in comparison to 2020. With such rapid development in the food &
beverage sector, the demand for propionic acid as a food preservative agent
would increase in the European region, thereby creating a surge in the growth of
the Propionic Acid Market during the forecast period.
Propionic
Acid Market Drivers
Rapid Increase in Rubber Production:
Short-chain fatty acid such as Propanoic Acid has rich chemical nature. Due to this nature, it is used as an intermediate during rubber manufacturing to improve its
longevity. The growing demand for rubber from major transportation sectors such
as automotive and aerospace has increased the production level. According to the Association of Natural Rubber Producing Countries, global
rubber production is estimated to expand by 3.9% in 2022. Furthermore,
according to the Department of Statistics Malaysia, in January 2022, rubber
production in the country increased by 7.3% in comparison to 2021 for the same
month. With such an increase in rubber production, the demand and usage of
propionic acid for intermediate applications are also anticipated to increase. This is positively impacting the growth of the Propionic Industry during the
forecast period.
Growth in Consumption of Cosmetic Products:
Due to its anti-bacterial properties, Propionic
Acid has high applicability in the cosmetics
& personal care sector, prevents bacterial growth and protects
cosmetics products from spoilage. The rapid increase in purchasing power
along with the growing shift of people toward skincare and
nourishment has increased the consumption of such products. According to statements
given by skincare giant Shiseido, in 2021, the global sales of the company’s
skincare products increased by 12.4% in comparison to the previous year.
Furthermore, according to the annual report of L’Oréal, in 2021, the overall sale of cosmetics
products of L’Oréal grew by 16% with a valuation of US$35.7 billion. With such
growing consumption of cosmetics products, the demand for propionic acid as an antimicrobial
agent has also increased in the cosmetics & personal care sector, thereby
stimulating the growth of the Propionic Acid industry.
Propionic
Acid Market Challenges
Stringent Government Regulations on Chemical
Usage in Pesticides:
Propionic
Acid is a short-chain fatty acid that has high applicability in pesticides. However, the extensive usage of such chemicals leads to serious health issues
such as eye damage, abdominal pain, breathlessness and lung damage. To minimize
the effects of such chemicals, certain regulations and acts have been passed by
governing authorities. For instance, the Federal Insecticide, Fungicide and
Rodenticide Act by U.S. EPA and the Pesticide Peer Review System by European Food
And Safety Authority regulate the usage of chemicals such as propionic acid in
pesticides. Such regulations can limit the consumption of propionic acid in
agrochemical applications, which hamper the growth of the Propionic Acid Market size during the forecast period.
Propionic
Acid Industry Outlook
Technology launches, acquisitions and R&D activities
are key strategies adopted by players in the Propionic Acid Market. The top 10
companies in the Propionic Acid Market are:
- BASF SE
- Dow Inc.
- Eastman Chemical Company
- Merck KGaA
- Perstorp Holding AB
- Hawkins Inc
- Otto Chemical Pvt. Ltd.
- Celanese Corporation
- Kemin Industries Inc.
- Niacet Corporation
Recent
Developments
- In April 2022, Perstorp announced plans to build
new carboxylic acid manufacturing plant in Sweden by 2024 which would add a production
capacity of around 70,000 metric tons per year for naturally occurring
carboxylic acids such as Propionic Acid.
- In June 2019, Dow Inc. completed the expansion of its Propionic Acid production facility in Texas, United States. This expansion enabled the company to meet the global demand for Propionic Acid.
- In May 2019, BASF SE established a second
production plant of Propionic Acid in Nanjing, China.
Relevant Reports
Report Code – CMR 0508
Report Code – CMR 99487
Report Code – CMR 25947
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