The global carnauba wax market size is expected to reach USD 334.9 million by 2024, according to a new report by Grand View Research, Inc. The market is expected to witness high growth owing to increasing use of the product as a food glazing agent which provides a superior shine, thus improving its aesthetic ability. Carnauba wax market is highly influenced by the favorable regulations enforced by the regulatory agencies such as European Union (EU) and Food and Drug Administration (FDA). The industry is highly dependent on the raw materials which form a major part of the operational cost for the manufacturers. The raw material is supplied majorly by the farmers and landholders, employing primitive techniques for wax extraction.
However, in some cases, the manufacturers may be backward integrated to the extraction of raw materials.
The manufacturing of the product is limited to Brazil due to the exclusivity of the Brazilian palm tree to the region. The production is dominated by four wax manufacturers namely Brasil Ceras, Carnauba do Brasil, Foncepi, and Pontes. The companies in the market resort to external third party distribution channels to sell their product in the international market while the domestic distribution is carried out through the company established distribution channels. The industry is characterized by the presence of a number of suppliers and distributors spread across the major carnauba wax consuming regions such as North America, Europe, and Asia Pacific.
The investment feasibility for the market declares the low-profit margins for the raw materials suppliers and the manufacturers, and a relatively higher margin for the suppliers and the wholesalers. The price of the product is lower in North America and Europe, but higher in Asia Pacific. The product is manufactured solely in Brazil, leading to a comparatively lower cost in Central and South America as compared to North America and Europe. The prices significantly vary across region owing to transportation cost. As a result, the prices in North America are significantly lower as compared to the cost in Asia Pacific.
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Further key findings from the study suggest:
- Cosmetics accounted for over 24% of the consumption volume in 2015 due to high demand for the wax as a glazing agent in lip colors, lip gloss, conditioners, and hair gels. Growing demand for the product in manufacturing cosmetics owing to its organic nature is expected to drive the industry growth.
- Pharmaceutical use of the product is expected to account for over 7% of the industry revenue due to increasing use of the product as a coating agent in pharmaceutical drugs. Also, growing demand for time-release drug delivery systems such as capsules coupled with favorable regulations pertaining to the use of the product for medical applications.
- Asia Pacific is expected to grow at a CAGR of over 4% from 2016 to 2024 due to rapid industrialization in the developing economies such as China and India. Increasing disposable income coupled with the changing consumer preference in the region is expected to drive the demand. The growth of the confectionery industry in the aforementioned economies is expected to benefit the market growth.
- Key participants in the industry are involved in setting up of the extensive distribution network to cater to the global demand. The distributors are involved in the procurement of the product from the manufacturers, followed by product customization related to the physical form, in accordance with the requirements of the end-users.