The levulinic acid market is expected to witness healthy growth, at an estimated CAGR of over 4% over the forecast period (2021-2026). Due to the COVID-19 impact in 2020, production in various chemical and other industries has decreased and the supply of raw materials to the industries has been significantly affected. For instance, the personal care and cosmetics industry has declined by around 4% in 2020 compared to 2019 due to the impact of these situations. However, the pharmaceutical industry has witnessed a huge growth in 2020 due to increased health concerns and diseases.

- Over the medium term, the major factor driving the growth of the market studied is increasing usage as substitutes to traditional fertilizers
- On the flip side, the COVID-19 impact is expected to hinder the market growth.
- Asia-Pacific region is expected to dominate the market and is also likely to witness highest CAGR during the forecast period.

Key Market Trends

Cosmetics and Personal Care to Dominate the Market

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- Levulinic acid and their salts (majorly sodium levulinate) are water-soluble and are commonly used in beauty and personal care products, as it is approved by the US Food and Drug Administration (FDA). Also, the rules governing cosmetic products in the European Union are not restricting the use of these ingredients.
- Levulinic acid is used in around 130 cosmetic formulations and sodium levulinate is used in around 400 cosmetic formulations, according to 2020 VCRP survey data. Levulinic acid has highest maximum concentration of around 4.5% in hair dyes while Sodium Levulinate is used at maximum concentration of 0.62% in mouthwashes and breath fresheners.

- Also, these ingredients are reportedly safe for use in products that come in contact with eyes. For instance, sodium levulinate is used up to 0.57% in the eye shadows and lotions.
- Hair textures vary from person to person, and so do the hair- and scalp-related issues. Some people might have damaged or dry hair, while others must deal with breakage and hair fall problems. This, in turn, increasing the hair care products primarily hair dyes.

- Continuous growth in online beauty spending, expanding use of social networks, increasing interest of consumer interest in new and premium products, accelerating urbanization, and the growth of the upper middle class population are the major factor driving the cosmetics market worldwide.
- According to Statista market forecast, the market for beauty and personal care (cosmetics, skin care, and personal care) has declined by 4.19% in 2020 compared to previous year reaching a total of USD 483.34 billion. The market is estimated to reach USD 615.82 billion in 2025.

- All the above-mentioned factors, in turn, are projected to show an impact on the market studied during the forecast period.

Asia Pacific to dominate the Market

- Asia-Pacific is the largest market for levulinic acid. It is also expected to be the fastest-growing market during the forecast period. The dominance is majorly attributed to the countries such as China, India, and Japan.
- Countries like China and India are the largest consumers of fertilizers, especially because of their ever-increasing population and limited agricultural land. Hence, the need for fertilizers is high in these countries.
- At present, the penetration of personal care products in India is low when compared to developed or even other developing economies. However, improving the economic environment and increasing purchasing power of the Indian population are expected to increase the adoption of personal care products in the country, thereby driving the demand for levulinic acid and their salts.

- According to a report published by the Ministry of Economy and Industry, the beauty and personal care (BPC) industry in the country is expected to reach more than USD 10 billion by 2021, at an estimated growth rate of 5%-6% annually.
- India is the third-largest pharmaceuticals in terms of volume and thirteenth most significant in terms of value as it has a large raw material base and availability of a skilled workforce. According to the India Brand Equity Foundation, India's pharmaceutical export stood at USD 19.13 billion in 2018-2019, reached USD 13.69 billion in 2019-2020 (till January 2020).

- Thus, all the aforementioned factors are expected to drive the market growth in the region, during the forecast period.

Competitive Landscape

The global levulinic market is consolidated with a few companies controlling the majority share in the market. The major companies in this market includes GFBiochemicals Ltd., Alfa Aesar - Thermo Fisher Scientific, Tokyo Chemical Industry Co., Ltd., Ascender Chemical Co., Ltd., and Merck KGaA, among others.

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