[box type=”shadow” ]As global concern over water scarcity increases, there is a growing opportunity for companies to replace traditional laundry chemicals with less water-dependent laundry ingredients. In fact, emerging economies are making the transition toward water-efficient laundry products that need less water for rinsing while concentrated detergents containing less water are predominant in developed countries, in an effort to cut packaging and transportation costs. There is still room for innovation, especially in emerging markets, where the development of effective and affordable less water-dependent ingredients is still challenging.[/box]
Water is becoming an increasingly scarce commodity, especially in the two largest emerging markets, China and India, where 46% of absolute global volume growth in laundry detergents is forecast during the 2015-2020 period. In fact, 50% of the global laundry detergent market by volume in 2020 will be accounted for by water-stressed countries across four continents: China, India, Indonesia, Mexico, South Africa and US (e.g. California). It is not surprising that in this landscape, leading companies with environmental responsibility initiatives such as Unilever, Procter and Gamble and Henkel – which together account for around 40% of the global laundry detergent market by volume – have already started to explore ways to reduce the water footprint of their products.
Water accounts for around one fifth of the total ingredients in laundry detergents, with liquid detergents unsurprisingly containing the highest amount of water in their formulations. The laundry detergent industry globally consumed five million tonnes of water in 2015 and demand is forecast to grow at a CAGR of 3% to 2019, driven above all by the growing demand for liquid laundry detergents in Asia Pacific and Middle East.
The development of waterless products is not going to solve the problem of water scarcity by itself since the water added to the products represents less than 1% of the total water footprint. Nevertheless, Walmart has challenged laundry manufacturers to reduce the water content in detergents by 25% in North America by 2018. This has produced a strong impetus for leading companies to innovate in concentrated and extraconcentrated laundry detergents that also save on packaging and transport costs.
In fact, demand for liquid tablet detergents, designed for use in conventional and high-efficiency washing machines, is expected to grow at a CAGR of 7% in North America and in Western Europe over 2015-2020. By contrast, fast emerging economies such as India are less open to waterless products due to their higher price compared to water-based alternatives and, instead, there is a shift here towards standard liquid detergents, which are expected to grow at a CAGR of 13% in Asia Pacific during 2015-2020.
Market opportunities for manufacturers of surfactants, synthetic polymers and preservatives are expected to increase in the short to medium term. In fact, in China, the demand for concentrated liquid detergents is expected to grow at a CAGR of 16% over 2015-2020. This trend will fuel demand for amylase enzymes, preservatives and nonionic surfactants (eg alkoxylated fatty alcohols) in laundry detergents which are expected to grow at CAGRs of 15%, 15% and 11%, respectively, by 2019. However, the impact of the shift towards liquid detergent tablets on the laundry ingredients market in North America and Western Europe is harder to predict since higher concentration involves lower volume but higher value. In contrast, the growing popularity of liquid detergents in India will affect demand for surfactants and synthetic polymer in laundry detergents which will grow at a CAGR of 4% and 3%, respectively during 2015-2019.