Benzyl Alcohol Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

The global benzyl alcohol market is projected to register a CAGR of over 5% during the forecast period (2021-2026).

The market was negatively impacted by COVID-19 in 2020. Benzyl alcohol is used in the formulation of paints and coatings as a solvent, which further finds its application in the end-user industries, such as automotive and construction. Considering the pandemic scenario, the construction and automotive manufacturing were on a temporary halt during the lockdown, thus, leading to a decrease in the consumption of paints and coatings, which negatively impacted the demand for the benzyl alcohol market. Moreover, benzyl alcohol is used as a bacteriostatic preservative at low concentrations in intravenous medications, cosmetics, and topical drugs. Excluding the pharmaceutical applications, the demand for cosmetics was also reduced in 2020 due to the lockdown scenario, coupled with halted production units. However, the demand is expected to recover in 2021.

Key Highlights

• Over the short term, the increasing demand from the food and beverage and cosmetics, and personal care industries is expected to drive the market's growth.
• On the flip side, a high concentration of benzyl alcohol causes toxic effects on humans, and the unfavorable conditions that are arising due to the COVID-19 outbreak are hindering the growth of the market.
• Intensification of nitrobenzaldehydes synthesis from benzyl alcohol as an inherently safe continuous flow process in a microreactor is expected to offer various opportunities for the growth of the market over the forecast period.
• The food and beverage industry is expected to dominate the global benzyl alcohol market over the forecast period.
• Asia Pacific represents the largest market and is expected to be the fastest-growing market over the forecast period due to the increasing consumption from countries, such as China, India, and Japan.

Key Market Trends

Food and Beverage Industry Segment to Dominate the Market

• Food additives and preservatives derived from benzyl alcohol are intensively used in the food and beverage industry. The food and beverage industry is anticipated to register a CAGR of more than 8% during the forecast period.
• The food preservative market is expected to register a CAGR of more than 6% during the forecast period, owing to the rising consumption of processed and packaged food. This is expected to ensure the regular demand for benzyl alcohol as many preservatives are derived from it.
• The worldwide food additives market is projected to show rapid growth during the forecast period. Benzyl alcohol is a food additive permitted for direct addition to food for human consumption, as a synthetic flavoring substance.
• According to FoodDrinkEurope, in Q3 2020, the European Union (EU-27) food and drink industry production has increased by 8.2% compared to the previous quarter and decreased by 0.4% Y-o-Y basis compared to Q3 2019. Furthermore, the industry turnover has increased by 5.9% compared to the previous quarter and decreased by a 1.1% Y-o-Y basis compared to Q3 2019.
• Japan's food and beverages sales value was valued at about USD 450 billion in 2019, with a decline rate of about 2% compared to the previous year, which negatively impacted the market studied.
• Therefore, the factors mentioned above are expected to show a significant impact on the market in the coming years.

Asia Pacific to Dominate the Market

• Asia Pacific is expected to be the dominant market in benzyl alcohol consumption. This is because China dominates the market for the end-user industries, such as paints and coatings, adhesives and sealants, chemical processing, and cosmetics and personal care. China's consumption of adhesives accounts for about a 32% share of global consumption.
• Asia Pacific is also expected to be the fastest-growing market during the forecast period, owing to the demand from applications like solvents, preservatives, food additives, etc.
• The Asia Pacific food additive market is expected to register a CAGR of more than 6% during the forecast period. Benzyl alcohol is regularly used as a food additive in various applications.
• Benzyl alcohol is widely used in the production of construction industry products, like adhesives, paints, coatings, sealants, and others.
• The paints and coatings industry, where benzyl alcohol is used as a general solvent, is expected to witness a CAGR of approximately 6% during the forecast period in the region. This is because China is expected to witness the highest growth in construction activities, followed by India. In China, government spending on constructing affordable housing facilities has been increasing to cater to the housing demand. Additionally, the public-private partnership (PPP) projects have been boosting in the domestic construction sector.
• China was leading in the construction industry with market size of USD 1,092.9 billion in 2019, registering a growth rate of 14.71% compared to the previous year.
• Furthermore, the total new construction in Japan was accounted for about 127.55 million sq. m in 2019 and reached about 113.74 million sq. m in 2020, with a decline rate of about 10.5%, which, in turn, affected the demand for the benzyl alcohol market.
• Paints and coatings find their application in the automotive industry as well. In 2019, China had produced 25.72 million vehicles and reached 25.22 million vehicles by 2020, registering a decline rate of about 2%, which negatively impacted the demand for the studied market.
• The Asian cosmetics and personal care market is gaining popularity, worldwide. It is expected to register a CAGR of more than 5%, during the forecast period, with Japan, Singapore, South Korea, Hong Kong, and China among the top 10 global cosmetics exporters. Benzyl alcohol is used in various cosmetic formulations as a fragrance component, preservative, solvent, and viscosity-decreasing agent.
• China is one of the major consumers of cosmetics. Benzyl alcohol is widely used in cosmetic formulations as a fragrance component, preservative, solvent, and viscosity-decreasing agent. In March 2019, the retail trade revenue of cosmetics in China amounted to about USD 4.33 billion and reached about USD 3.85 billion in March 2020, with a decline rate of about 11%, mainly due to the COVID-19 impact, which negatively impacted the demand for the studied market.
• Therefore, the factors mentioned above are expected to show a significant impact on the market in the coming years.

Competitive Landscape

The benzyl alcohol market is fragmented in nature. The major companies in the market studied include Alfa Aesar, Thermo Fisher Scientific, Elan Chemical, LANXESS, Merck KGaA, and Valtris Specialty Chemicals, among others.

Additional Benefits:

• The market estimate (ME) sheet in Excel format
• 3 months of analyst support