Green niches – possible or not?
In the world of renewable chemicals, most companies are looking after initial market niches in which to launch products. The main question is: where are these niches? There are two alternative outputs for companies products, consumers or other businesses. If the aim is to get a green premium, most people would say that the gut feeling is to the consumers and not other industry. Is this the case or are there complications? In this text, a few examples where there is room for green alternatives within the personal care market will be discussed and compared to other options.
The speciality surfactant market is more than $600 million but out of this, only 10% of the surfactants available are of a natural origin. In this category, natural ingredients that do the same job as the synthetic, but with additional benefits such as reduced eye and skin irritation are highly preferable. The same is true in the case of speciality emollients, the most widely used ingredient in personal care. The naturally derived products already have more than 50% of this market, but with an ever-increasing demand for moisturizing, softening and anti-ageing properties, there is a lot of room for more products. The same is true in the case of conditioning proteins, where more than 60% of the market is now made up of plant-derived proteins. However, the botanic proteins suffer from higher costs and innovation in means of production to lower costs is a suitable challenge. If the two former segments already are dominated by the naturally derived products, the same is not true in the case of hair fixative polymers found in hairsprays and other hair styling products.
More than 99% of these products are derived from fossil-based origin and are vinyl, acrylic and polyurethane polymers. One suggestion here may be to produce the same type of polymers that are currently used, but start from a renewable feedstock; if substitutes are difficult to come by. Finally, it would be of great interest to find speciality active substances that not only provide the key desired property such as anti-ageing but also provides the effect of let’s say an emulsion. In this case, the number of ingredients can be reduced and the product cost-of- production reduced. With these segments as an example, there is room for innovation in this field with regards to green products and since the market is in every way consumer-oriented, there is a good chance that a green premium can be reaped.
So this comes across as quite straight forward right? Find a natural product to replace a fossil one and make sure it is within a consumer-heavy part of the market. There is, however, one factor that will mess with our equations: taxes and incentives. These will distort the market and result in other outputs being more profitable than originally envisioned. One example is the use of rosin acids and fatty acids in the production of renewable fuels, where they will be reacted with hydrogen into molecules with boiling points in the gasoline and diesel ranges. This is a good example of how tases and incentives will change the competitive landscape and favorise the production of molecules lacking functionality from molecules with functionality.
However, all in all, there appears to be plenty of space for new innovation in the renewable space and we look forward to reading about more success stories soon!
Author: Christian Hulteberg – email@example.com
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