Why the Cosmetic Chemicals Market Is Expected to Reach $27.7 Billion Despite Push for Organic Products

By Jemima McEvoy Sunday, March 7, 2021

The global cosmetic chemicals industry is projected to reach $27.7 billion by the end of 2025, according to a new report published to Research and Markets. The market will see steady growth during this period despite new challenges and pressures caused by a general cultural shift toward organic products due to environmental and ethical concerns. Other factors — like increased expenditure on personal care and growing consciousness about physical appearance — are expected to drive the cosmetic chemicals industry growth.

Skincare products with a lab beaker and mortar and pestle.

Market Profile

The global cosmetic chemicals market was pegged at $14.7 billion in 2019, according to Grand View Research. This market is integral in the beauty and personal care industries as it includes many of the ingredients used to make products. Preservatives constitute an important part of cosmetic product formulations, and key ingredients in these formulations include surfactants, emollients, colorants, preservatives, and emulsifiers.

This is a massive industry with global influence. Some of the leading players in this market include US-based companies Dow and Ashland Global Holdings; Dutch multinational company Azko Nobel; Swiss company Givaudan SA; and UK-based company Croda International PLC.

Many of these companies still reported massive earnings in 2020 despite the disruptions of the COVID-19 pandemic. Dow, for example, reported a year-over-year (YOY) growth of 4.92% in its Q4 earnings report for a total value of $10.71 (not all this value comes from cosmetic chemicals). Meanwhile, Ashland saw its YOY revenue increase by 3.56% in 2020, according to the Q4 earnings of the company, for a total revenue of $552 million.

Growth Projections

Already a humongous and influential market, the Research and Markets report predicts that it will expand by a compound annual growth rate (CAGR) of 5.80% from 2021 to 2025. The market will reach an estimated value of $27.73 billion by the end of the forecast period, according to the report, marking a roughly 88% increase in value.

Forces Impacting Growth

This growth — which is significant for a market of this size — will be driven by numerous factors, including a growing consumer base, rising disposable income, an increase in cosmetics manufacturing, expanding urbanization, and the rapid adoption of cosmetics products among millennials. Culturally, people are more focused on their physical appearance, forging a massive window of opportunity for this market to keep climbing in value. Emerging trends like an uptick in male grooming and increased demand for skincare and anti-aging cosmetics will also play a role.

However, the cosmetic chemicals market will be challenged by an escalating trend toward organic cosmetic products. Customers are putting more emphasis on organic cosmetics. Consequently, the global market for natural and organic cosmetics has risen from $34.5 billion to $40.2 billion in 2021 and is expected to reach $54.5 billion by 2027. The value added toward this industry leads to a decrease in value toward the cosmetic chemicals industry. Nonetheless, the factors driving growth in the latter industry outweigh the inhibiting factors — and the market will continue to grow.

About the Author

Headshot of Jemima McEvoy

Jemima is a journalist who enjoys reporting on business, particularly small business and entrepreneurship.

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