Expansion of Brazilian middle class drives growth in personal care chemicals
With the market for personal care having grown by double digit figures for the past 15 years, Frost & Sullivan estimates that the supply of personal care chemicals topped the $1bn mark in 2011, with forecasts that it will reach $1.62bn by 2018.
Upward mobility of the population has helped to drive this growth, particularly the fact that the Brazilian middle class population is estimated to have grown by 10 million people in the last two years alone, according to the Frost & Sullivan report, entitled Brazilian Personal Care Chemicals Market.
But can this incredible growth momentum be maintained, is the question on everyone’s lips. The Frost & Sullivan report suggests that yes, particularly as new demographic and socio-economic patterns start to prevail.
Middle class and an aging population fuel growth
In the future, the report hints that the growth of the middle class could even be surpassed by the growth of the aged population, which is predicted to triple by 2020.
In turn, this will create a growing elderly population, which will overshadow a shrinking youth population, with the report suggesting that personal care providers will have to adapt to this demographic trend if they want to stay ahead of the game.
This is likely to lead to the development of products that target the specific needs of an aging population, with anti-aging ingredients likely to prove all the more popular for this reason.
Green and natural also driving growth
Likewise, as has been the case in other more developed markets, one of the other key drivers in Brazil is likely to be demand for natural and green ingredients to feed demand for natural-based personal care products.
“The search for environment-friendly products and green chemical ingredients has driven the use of organic raw materials; commonly extracted from seeds, fruits, and roots," said Frost & Sullivan industry analyst, Lisse de Oliveira.
"However, with the food and biodiesel markets competing with the personal care market for raw materials, the depletion of resources may lead to a rapid price rise in end products."
The problem with sourcing raw materials is likely to lead personal care chemical providers to seek out new alternative solutions in their research and development labs, the report notes.
Price-volatility and quality threaten the market
Likewise price volatility and the presence of several smaller ingredients providers that supply raw materials of varying quality to what is called the ‘informal market’, makes for a complicated landscape that can sometimes be difficult for personal care providers to navigate.
“To beat back the competition from the informal market, the governments have to increase end users' awareness about the larger economic fallouts of conducting business with illegal and informal manufacturers," said de Oliveira.
"For their part, personal care chemicals companies should work on offering high-quality products at competitive prices."
