Surely, yet slowly, changing formulation trends are changing the specialty surfactant market. US demand for specialty surfactants is forecast to rise 2.0% a year to 4.2 billion pounds in 2020.  Gains in all markets will be supported by a continued trend toward safer, more environmentally friendly products, according to a recent study by The Freedonia Group.
 

The Cleveland, OH research group found that personal care product applications are expected to show the fastest gains in specialty surfactant demand. Freedonia notes that many consumers are willing to pay for products that utilize gentler specialty surfactants, instead of the harsher natural soaps and commodity surfactants that have previously dominated this market. Newer players to the personal care space have jumped on the gentle bandwagon faster than more established companies. For example, last month, Nohbo ramped up production of its eco-friendly biodegradable shampoo balls. Designed and developed by 17 year-old Benjamin Stern of Melbourne, FL, the products are billed as waste-free, paraben-free and sulfate-free. The young man might be new to the surfactant game, but Stern knows how sulfate-free is driving the hair care industry. His formula contains “plant-based ingredients” to get rid of oil and grime.


Stern says he became interested in developing a bottle-free shampoo solution, after learning that four out of five consumers do not recycle personal care packaging and that enough empty shampoo bottles are tossed in the trash every year to fill 1,164 football fields. Stern’s concern is becoming quite common, as the drive for improved sustainability and global drivers are influencing our customers’ and their consumers’ needs, according to Chris Sayner, VP-customer alliances, corporate sustainability, Croda International Plc.


“Consumers want to know what is contained in the products they purchase and increasingly expect businesses to take greater responsibility for the impact of their products, whilst legislators demand ever higher standards,” he told Happi. “As a result, the majority of consumer product companies and ingredient suppliers have strong sustainability programs.”


Sayner pointed out that these programs focus around all things environmental including reducing carbon footprint, water, waste, increased use of non-fossil fuel energy, greater efficiency of products in use and sustainable raw material supply; renewable vs. petrochemical and of course the sustainability credentials of the renewable raw materials, palm being a current emphasis. 


“Nonionic surfactants are widely used in formulations for their superior cleansing, emulsification and solubilization performance, yet current offerings are mainly petrochemical-based and nonrenewable,” he said.


The renewable alternatives available to the market are not ethoxylated and do not always provide the same level of performance, demonstrating a need for high performance, renewable nonionic surfactants. 


“As consumer product companies reach their limit in the ways they can impact the carbon footprint of products they are increasingly looking at the supply chain as an area where a change can make an impact,” said Sayner. “At Croda our approach is to be aligned with these programs, proactively contribute and help our customers meet their sustainability goals.”
 

According to many entrepreneurs, sustainability is their primary goal. And After a couple of starts and stops due to production problems, Nohbo is getting the balls rolling.


“The goal is to build a strong (sales) base on the website, www.nohboball.com, then expand on Etsy and Amazon,” he told Happi. “We’ve started talking with hotels and hope to expand there, too.”


In fact, many startups and smaller players in both the household and personal care space are finding a receptive audience on Amazon.


According to Ed Caballero, H&IC technical development manager, Azelis Americas, small home care and industrial cleaning companies have reported gains in ecommerce, particularly through their own internet channels as well as Amazon.com; while their traditional channels (supermarkets and stores) remain relatively flat. Business performance in toll manufacturing is another activity that has helped customers offset weak sales through traditional channels.


And what segments are showing the strongest gains? Julia Hernández, vice president, marketing, Azelis Americas PC and H&IC, said that that the business has benefited from healthy growth rates in the face and hand cleansing segments. She believes this is driven by the demand for mild surfactants and those that deliver added-value benefits in multifunctional and specialized skin care applications.


Plant-based ingredients are a key component in the BASF portfolio. Michael St. John, senior marketing manager, home care I&I, North America, told Happi that BASF has seen significant growth from plant derived bio surfactants and sustainable palm oil derivatives.


“APG volume has spiked in the last year mostly driven by consumer’s desire for ‘natural’ or renewable ingredients,” he explained.  “There has also been a shift to lower the active content from ~15% down towards 10%.  This is mostly being seen in the mass market as detergents are reducing surfactants and replacing with enzymes.”

 
A Sign of Weakness?  

       
According to Caballero, surfactant business in 2016 has been weaker due to soft demand in static and declining markets such as cleaners for oil extraction platforms and equipment. Additionally, both Korean and Chinese suppliers are setting up distribution networks in the US and importing both alkyl glucosides and completely formulated cleaning products incorporating specialty surfactants.
 

“Customers realize the risks, and respond by splitting the business between local suppliers and imports in order to manage costs and ensure a reliable supply of material,” he told Happi. “Furthermore, some consumers are moving down the value chain, and perceive home care value products as ‘good enough’ alternatives to the leading brands in terms of performance. As a result, some key players have created product line extensions at lower price points in order to compete.”
 

In contrast, he explained that there are those companies that target the niche, natural home care market, who have found a competitive advantage by capturing a consumer group that is highly receptive to green brands, and that is less likely to trade performance for cost savings.    
 

BASF’s St. John noted that surfactants are becoming an integral part of many commercial and industrial sectors.
 

“Because of their viscosity and elasticity, they are increasingly becoming popular in new applications,” he said.

 
Still, although surfactants are expending to new applications the business is weaker on a total volume basis due to the lowering of active levels in the products, according to St. John. He noted too that there is limited innovation due to lengthy approval process and cost containment.  New surfactants are often blends of or bio-based versions of existing surfactants.
 

Within the cleaning product category, specialty surfactant demand is supported by changing detergent use patterns in the household segment, according to Freedonia. The increasing popularity of detergent pods, which have contributed to a decline in total detergent use in volume terms since they are premeasured, has supported the use of lower volume, more efficient specialty surfactants over commodity products.  Furthermore, the use of high efficiency (HE) laundry machines requires laundry detergents that are effective at lower temperatures and in smaller volumes of water; as a result, HE laundry detergents generally have higher specialty surfactant loadings. 
 

Hernandez of Azelis noted that sustainability is driving change in the detergent industry with formulators and consumers demanding water and energy efficient products, primarily concentrated formulations, with tablets leading market growth in the laundry and dishwash segments.
 

“In the lines of sustainability, there is also a growing trend for the use of biodegradable surfactants and those made with ingredients that offer renewable supply,” she said. “Suppliers are embracing sustainability as a product development and a marketing strategy with a direct effect on profit gains and consumer retention, which are critical in a highly competitive market where consumers are becoming cognizant about how their product choices affect the environment.  In the same lines, consumers are looking for convenience and ease of use as reflected in the growth of multifunctional, all-purpose cleansers.”
 
 
What’s New?


In the West, BASF’s surfactant business in home care has been more robust than in personal care, particularly in the US, due to movement to more “eco-friendly” products.  
 

“Globally we see Asia Pacific and Middle East/Africa as primary growth areas for surfactants,” said St. John. ”We see surfactant decline in Latin America as active levels are reduced and eco-friendly products are less prominent.”
 

Tim Dooling , president, Americas PC and H&IC, said Azelis is moving toward providing a highly optimized focus to H&IC through sales deployment efforts that are more market facing.

 
“Azelis Americas PC and H&IC sees the home care and industrial cleaning as two very distinct markets in and of themselves,” he explained. “While other distributors have traditionally approached them together, we focus our efforts on segmenting these markets out to better address the needs of the customers.”
 

More than a year ago, Croda ceremonially broke ground for a significant investment at its Atlas Point manufacturing site to build the first plant of its type in North America to produce a 100% bio-based range of ethoxylated products by using ethylene oxide derived from bio-ethanol. This new range of bio-based products will be used in many industry applications, including lubricants, seat foams and coatings in the automobile industry; air- and floor-care products in the cleaning industry; drilling fluid in the oil industry; and cosmetics and hair care products in the personal care industry. The plant is currently under construction and will be completed in 2017.

 
In November 2015, Croda announced that all relevant manufacturing sites are certified to handle Certified Sustainable Palm Oil (CSPO) derivatives. Eleven manufacturing sites, handling over 99% of the palm derivative volumes, are now Roundtable on Sustainable Palm Oil Supply Chain Certified (RSPO SCC) via Mass Balance process.
 

Croda has made a global commitment to sustainable palm oil, and can now handle CSPO materials from facilities in Asia Pacific, Europe, South America and North America. This latest development demonstrates Croda’s commitment to sustainability and the responsible sourcing of palm oil and palm kernel oil on a global scale.
 

Earlier this year, Kevin Gallagher, president, personal care and actives, retired after a long-standing career of almost four decades with Croda. His retirement was effective as of January 1, 2016.  Sandra Breene, previously president, health care and crop care, assumed the role of president, personal care and actives also as of the new year.

 
From personnel moves to plant openings to product launches, surfactant suppliers continue to make the moves necessary to compete in an increasingly complex and volatile marketplace.
 

For more on surfactants, read How Green Is Your Surfactant?