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The global lactic acid market size was USD 1.18 billion in 2020 and is projected to grow from USD 1.28 billion in 2021 to USD 2.43 billion in 2028 at a CAGR of 9.6% during the 2021-2028 period. The impact of COVID-19 has been unprecedented and staggering, with ferromanganese witnessing a negative demand shock across all regions amid the pandemic. Based on our analysis, the global market exhibited a decline of 5.6% in 2020 as compared to the average year-on-year growth during 2017-2019. The sudden rise in CAGR is attributable to this market’s demand and growth, returning to pre-pandemic levels once the pandemic is over.
Lactic acid or 2-Hydroxypropanoic acid is a naturally occurring organic acid used in food, chemicals, pharmaceutical, cosmetic, pharmaceutical, and medical industries. It is produced by the sugar fermentation process obtained from renewable resources, making it an eco-friendly product. The product is mostly used in PLA production, a compostable thermoplastic and biodegradable polymer made from renewable sources. Lactic acid bacteria (LAB) are among the important bacteria groups that provide health benefits to plants, animals, and humans. The growing characteristics and their metabolic activity are the key factors found in various applications such as food production, probiotics, and the agriculture industry. According to the U.S. Food and Drug Administration (FDA), it is generally recognized as a safe (GRAS) additive for general or miscellaneous purposes.
COVID-19 Pandemic: Positive Impact on Food Packaging and Cosmetic Industries to Bolster Market Progress
The COVID-19 pandemic has had a significant growth impact on various industries. Initially, nationwide lockdown measures and travel restrictions have significantly impacted the global supply chains of the food & beverages and cosmetics industries. However, the coronavirus outbreak has positively impacted the packaging industry's growth. Many food manufacturers opted for plastic packaging as it is safe, enduring, and economical. The COVID-19 outbreak has positively impacted the packaging industry's growth. However, it has resulted in high demand for plastic packaging. In addition, many food manufacturers are using plastic packaging, as it is safe, enduring, and economical. The high demand for food & beverage packaging during the pandemic has led the consumers to use packaged food products to maintain hygiene and safety.
In addition, key cosmetic manufacturers, such as Kao Corporation, aim to develop lactic acid-based hand care products with long-lasting antimicrobial properties.
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Low Carbon Footprint of PLA on the Environment May Create Opportunities in Market
PLA is a relatively innovative and new biopolymer, which is biodegradable and bio-based. The reduction in environmental footprint can be fairly achieved through improvements in sugarcane farming, thus increasing the efficiency in the production process and usage of renewable energy in the conversion process. PLA bioplastic produces products with high bio-based content and a reduced carbon footprint. Major players, such as Corbion, introduced Luminy PLA, which offers a 75% reduction in carbon footprint compared to traditional fossil-based plastics. The company uses Thai sugarcane and European sugar beet as raw material feedstock for 2-Hydroxypropanoic acid production, which produces bioplastics. PLA is produced from renewable raw materials such as sugar beet, sugarcane, cassava, and corn. These feedstocks are GMO-free crops. PLA bioplastics are biodegradable, and in the right environment, they will serve as a food source for fungi and microorganisms.
PLA bioplastics are broadly found in various established markets, such as organic waste bags, fresh food packaging, 3D printing, durable consumer products, tea bags, non-woven, or toys. Most PLA bioplastics cannot withstand high temperatures. However, Total Corbion PLA has developed a product with an advanced high heat resistant solution for PLA-based bioplastics.
In addition, in December 2018, Futerro, Sulzer, and TechnipFMC collaborated to form the PLAnet initiative in equal partnership to promote PLA-based sustainable plastics production.
Growing Cosmetic and Personal Care Industry to Drive Market Growth
Lactic acid, an alpha hydroxy acid (AHA), primarily found in milk, has been utilized in skincare and cosmetic therapies since ancient times. It is now utilized as a humectant, pH adjuster, exfoliator, and skin conditioning agent in various cosmetic and personal care products. It smooths, brightens, and evens skin, while also making it look firmer. It helps reduce the appearance of dark spots, wrinkles, and fine lines. In addition, the product is utilized in hair products because of its ability to strengthen weak hair. Rising consumer awareness and per-capita income are expected to boost cosmetics and personal care products demand. This factor is expected to propel market expansion.
Additionally, rapidly increasing social media users, personalized ads, and famous social influencers endorsing various cosmetic products through these platforms are expected to boost cosmetic and personal care products’ sales. Online stores and e-commerce businesses such as Alibaba and Amazon have simplified purchasing items, increasing demand for cosmetic and personal care products. For example, L'Oreal recorded a 47.2 percent rise in e-commerce sales in the first quarter of FY2021, accounting for 26.8 percent of total sales. Rapid digitalization, social media impact, and creative online marketing are projected to increase demand for beauty and personal care goods. This factor is expected to drive the lactic acid market growth.
Fluctuating Raw Material Prices to Hinder Industry Growth
Raw sugar extracted from sugar beet or sugarcane, or dextrose from cassava starch or corn starch are the key raw materials used for 2-Hydroxypropanoic acid production. The raw sugar is generally sourced locally based on a particular region's most readily available feedstock. Thus, it is based on agricultural factors such as soil and climate conditions, as not all feedstock can be grown effectively in all regions. However, fluctuating raw material prices and a rise in commodity costs are likely to restrain lactic acid demand.
Sugarcane Segment to Dominate Market Because of Abundant Biomass Material Availability
Based on raw material, the market is segmented into sugarcane, corn, yeast extract, and others.
The sugarcane segment is expected to dominate the market during the forecast period due to the abundant availability of biomass materials. Sugarcane bagasse and harvesting residue are the most available resources, which can be utilized as feedstock. Sugarcane is used for bioplastics development and in biochemical and food industries.
Yeasts, such as Saccharomyces cerevisiae, produce 2-Hydroxypropanoic acid, lactic acid as they can tolerate low pH and grow on mineral media, which eases the acid purification. The demand for corn-based products such as microbial activity enhancers, acidulants, and pH regulators in the food and beverages industry shall accelerate the market growth during the forecast period.
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PLA Application Segment to Account for Major Share During Forecast Period Owing to to its Biodegradable Properties
On the basis of application, the market is segmented into PLA, food & beverages, cosmetics & personal care, pharmaceutical, and others.
PLA application segment is likely to account for the major market share during the forthcoming years. PLA is a biodegradable thermoplastic polymer obtained from the fermentation of renewable resources such as sugarcane, cassava, corn, cassava, and potato. Increasing demand for PLA in food packaging material, automotive, textiles, engineering plastic, and other industries shall boost the market growth. As the product is manufactured from biodegradable materials, it is usually considered food safe. Due to its biodegradable property, it is used in products such as glasses, disposable cups, tea bags, mulch films, and bottles. PLA generates around 68% fewer greenhouse gases (GHG) and does not emit toxic fumes during production.
Lactic acid occurs naturally in many edible products and is an important ingredient in the food industry. It is non-toxic and subsequently recognized as a ‘Generally Recognized as Safe’ (GRAS) substance by the U.S. FDA for its wide usage as an additive in the food industry. In addition, it is formed by natural fermentation in products such as soy sauce, yogurt, pickles, cheese, sourdough, and meat products. The product is used in various food applications such as beverages, bakery products, confectionery, meat products, salads, dairy products, ready meals, and others. It serves either as a preservative, flavoring agent or pH regulator in food products.
North America Lactic Acid Market Size, 2020 (USD Billion)
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The market in North America is dominated this market globally in 2020 because of the rising demand from the food & beverage, pharmaceutical, and cosmetics industries. The U.S. dominates the global pharmaceutical industry, with many pharmaceutical companies including Johnson & Johnson, Pfizer Inc., and Merck & Co., among others. PLA has a wide range of applications as a biodegradable and biocompatible polymer in the pharmaceutical industry. The pharmaceutical sector is likely to expand due to R&D and advances in drug delivery systems. These advancements are expected to drive market growth. Additionally, the rising demand for naturally derived ingredients in cosmetic & beauty products is expected to boost regional growth.
Europe is expected to witness significant expansion due to rising demand from the bioplastic industry. Rising concerns about the detrimental effects of non-biodegradable plastics and the environmental damage they cause are expected to increase the demand for biodegradable plastics as an alternative. Manufacturers in the region are expected to increase the utilization of bioplastics as packaging materials during the forecasted period, as consumer demand for eco-friendly products is likely to rise. For instance, in March 2017, Danone and Nestle Waters had switched to packaging a few of their products using 100 percent bio-based PET. Rising demand from the bioplastic industry, fueled by rising consumer awareness of environmental protection, is expected to drive regional market growth.
Asia Pacific region is anticipated to witness a significant growth rate because of the rising demand from the food & beverages industry. The demand for food and beverage products is anticipated to expand as people's purchasing power and living standards improve. 2-Hydroxypropanoic acid is used as a preservative, flavorings, and curing agent in the food processing industry. As the food processing industry is anticipated to expand during the forecast period, this factor will drive the overall market growth.
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South America is expected to witness growth owing to rising demand from the food & beverage industry. Rising demand for ready-to-eat delicious food items is projected to boost the preservative and flavor market. Change in consumer food consumption behavior and rising per-capita disposable income shall boost the regional market growth during the forthcoming years. The Middle East & African market may witness a substantial growth rate due to the rise in the personal care industry. High per capita income and high penetration of cosmetics and personal care products demand may stimulate the market growth in the region.
Capacity Expansion and Strategic Initiatives to Remain Principal Business Strategies by Key Market Players
The lactic acid market share is significantly consolidated in nature. Most of the key players invest in R&D activities to innovate new and developed technologies. For instance, in April 2019, Asahi Group, a Japanese-based brewery joint, established the Asahi Quality and Innovations Co. (AQI) to advance its expertise in yeast and LAB and adopt new digital technologies. This R&D will develop new health food ingredients, create new business, and reduce the overall environmental impact.
In addition, the key participants are primarily engaged in strategic acquisitions, new product launches, capacity expansion, and partnership to strengthen their production capacities, expand their product portfolio, and gain a competitive edge within the value chain.
An Infographic Representation of Lactic Acid Market
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The global lactic acid market research report provides a detailed analysis of the market and focuses on crucial aspects such as leading companies, sources, products, and applications. Also, the report offers insights into the industry trends and highlights vital industry developments. This report includes historical data & forecasts revenue growth at global, regional, and country levels, and analyzes the industry's latest market dynamics and opportunities. In addition to the factors mentioned above, the report encompasses various factors contributing to the market's growth opportunities in recent years.
Value (USD Billion); Volume (Kilo Tons)
Raw Material, Application, and By Region
By Raw Material
Fortune Business Insights says that the global market size was USD 1.18 billion in 2020 and is projected to reach USD 2.43 billion by 2028.
In 2020, North America stood at USD 0.48 billion.
Growing at a CAGR of 9.6%, the market will exhibit steady growth during the forecast period (2021-2028).
The PLA is expected to be the leading segment in this market during the forecast period.
The growing cosmetics and personal care industry is driving the market.
Corbion, NatureWorks, CELLULAC, and Galactic are the major players in the global market.
North America dominated the market share in 2020.
PLAs low carbon footprint is expected to drive product adoption.
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