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    Features

    Surfactant Market Update

    It’s a brave new world for everyone, including surfactant suppliers. But demand for personal cleansers and hard surface cleaners has kept business brisk.

    Surfactant  Market  Update
    Cleaning and sanitizing hard surfaces is paramount during a pandemic.
    Surfactant  Market  Update
    Demand for personal cleansers has never been greater.
    Surfactant  Market  Update
    Shampoo and other personal care categories are traditionally recession-resistant.
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    Tom Branna, Editorial Director09.03.20
    The best of times AND the worst of times? Household and personal care marketers and their supply partners can’t be blamed for some Dickensian verse these days; yes, the early days of coronavirus created supply chain challenges, but soaring demand for household cleaners and disinfectants, as well as personal cleansers and shampoos, provided a lift for many surfactant suppliers in the second quarter. And while retail and restaurant closures put a dent in sales to industrial and institutional for the first half of the year; long term, a renewed interest in cleanliness should be a boon for I&I sales.

    ResearchAndMarkets put the global surfactant market at nearly $40 billion last year and predicts sales will climb 4.5% a year to top $52 billion by 2025. Gains will come from urbanization in Asia-Pacific as well as growing demand for surfactants in home care, personal care and agrochemical applications. Of course, the rosy outlook doesn’t take into account the impact that the pandemic had—and will have—on the global economy. The second quarter was the worst on record for the US, the UK and many other nations. As we went to press, analysts warned that the recovery was beginning to falter and with winter on the way in the northern hemisphere, health officials are bracing for a spike in COVID-19 cases. No wonder then that suppliers see positive and negative results from coronavirus.

    According to the BASF Care Chemical team in North America, the impact of COVID-19 on the personal care industry is nuanced. “As a leading supplier of plant-derived APG surfactants, low-dioxane SLES, and coconut-based betaines, our demand has been healthy as consumers are buying more hand soap and stocking up on basics like body wash and shampoo,” explained the BASF Care Chemicals team in North America. “On the home care side, surfactants for HC I&I segments are mostly for cleaning and disinfecting, and their sales are being fueled by the growth in categories like hard surface cleaners, liquid laundry detergents and manual dish detergents.”

    Lucky is how executives at Acme-Hardesty describe business continuity during the pandemic, as the company is a major supplier of glycerin and fatty acids in the US market. Glycerin is a key component in many hand sanitizers and the use of fatty acids is important in the realm of soap and cleansing products.

    “We did experience some supply chain constraints, but we stayed on top of shipping issues, worked closely with suppliers, and ensured that all our customers were kept in supply of the materials they required,” recalled Caren Dres-Hajeski, business unit director, personal care. “It took a team of people and a supply allocation committee, but we made it through and are committed to keep continuity as best we can.”

    Stepan’s global surfactant business had a good first half of 2020, with 10% volume growth over the prior year due to the strong demand for household and institutional cleaning and disinfection products as a result of COVID-19.

    Executives at Coast Southwest told Happi that their company plays a critical role in the supply chain for essential infrastructure serving manufacturers of soap, cleaning compounds, hand sanitizer and personal hygiene products. Customers count on Coast Southwest to provide high-quality ingredients and on-time deliveries, especially in exceptional times like these. With deep resources and the long-term relationships with suppliers, the company has been able to anticipate and satisfy its customers’ needs—even as those needs evolve.

    In the first months of the pandemic that was hand sanitizer, but now the focus is expanding to hand soap. Coast Southwest has the components to formulate a wide range of hand soaps, and offers a range of surfactant blends from its Prop-65 sulfate-free blend to more traditional ingredients which offer ease of formulation.

    With increased handwashing and hand sanitizer use, consumers are stripping skin of the natural lipid barrier. Coast Southwest offers antiaging ingredients, including a line of olive-based emollients and Ecocert emulsifiers, that chemists can use to formulate rich moisturizers to combat the drying effects, said the firm.

    Additionally, the interest and demand for at-home beauty treatments is going up as consumers are not going to spas and aestheticians as much, and with the uptick in online beauty sales. Coast Southwest said its anti-aging team offers a wealth of experience in creating for those types of solutions as well.

    Adapting to Customers’ Needs

    BASF has been able globally to maintain production from practically all assets and has supported many customers’ urgent requests reliably, it said. As such, BASF customers have not experienced surfactant supply disruptions due to COVID-19.

    Through this pandemic, Evonik’s focus has remained on ensuring safety and on responding to changing customer needs.

    “Supply security is one of the facets which most customers expect from Evonik, and therefore we are very conscious of working with customers to ensure that we understand how their needs may be changing in order to adjust our own supply picture,” explained Arnoldo Fonesca, Evonik.

    All Vantage sites worldwide are operating and shipping, without any interruption related to the coronavirus in manufacturing or supply chain at this stage, according to Sebastien Massard, global marketing manager, Vantage Personal Care.

    “We have taken preemptive measures to ensure continuity of supply, such as storing extra stock of raw materials, as well as ensuring multiple sources of supply for materials we deem critical,” he explained.
    “We continue to request and receive daily updates from our suppliers and logistics partners. We conduct a comprehensive review of our supply chain and review our staffing requirements for all functions and sites to ensure products can be made and shipped according to schedule.”

    Furthermore, Vantage established daily sales and operations meetings to make sure any emerging issue in production or the supply chain can be handled immediately and communicated to customers.

    “Vantage remains focused on the health and safety of its employees. Actions taken to date have included restricting international and local travel, suspending tradeshows and large gatherings, implementing work-from-home policies for non-essential employees, increased sanitation services at all Vantage facilities, site visitor screening policies, among other actions,” Massard explained. “Vantage has trained all employees on proactive steps to protect themselves from contagious illness, which include best practice guidance from the health agencies.”

    David Shannon, senior vice president, Croda Inc, agreed that safety has been a focus.

    “Our priorities during this time have been to protect the health and safety of employees and balance stakeholder needs fairly, with an exceptional response of commitment from our employees to maintaining business continuity and serving our customers,” he explained.

    By completing a review of its supply chains and monitoring the situation as it developed, Croda put contingency plans in place should they be needed. In addition, to help small and independent businesses, Croda extended payment terms.

    “We have also made £200,000 available to support those in need closest to our largest manufacturing sites globally,” Shannon added.

    Innospec Performance Chemical has fared well throughout the pandemic. Early in Q2, the company met with some raw material disruptions that made it challenging for its operations teams to meet ongoing customer demand, but the company quickly worked through those issues and maintained a steady supply of products to its global customer base.

    “We promptly implemented social distancing, use of face masks, and enhanced cleaning protocols to ensure the safety of all of our staff so that we did not lose any production capabilities,” added December Pee, senior marketing specialist.

    Locus Performance Ingredients launched on July 21, 2020 amid the pandemic. Company executives note that it has had an impact on laboratory uptime to a modest degree, as Locus adheres to rigorous cleaning and laboratory management practices, but there’s been no dislocations in our supply chain from vendors.

    “We’re currently in discussions with a number of major CPG companies on Locus PI’s first product launch—the Ferma S line of sophorolipids for personal care,” said CEO Tim Staub.

    “Because our technology is extremely low CAPEX and our discovery time is short, we’re able to stay financially stable and move rapidly forward with new developments even in these unprecedented situations,” he told Happi.

    What’s Selling?

    According to Fonesca, the categories that are flourishing for Evonik generally fall into one of two buckets: those that are deemed essential under the current environment, and those that the current circumstances have prompted consumers and customers to value more greatly.

    Within the first group are, unsurprisingly, chemistries supportive of hygiene and sanitation, including Evonik’s surfactants portfolio for household, industrial, and institutional cleaning and inert ingredients for disinfection. While some of these groups suffered temporarily during the shutdown, the heightened cleaning standards, particularly in the industrial and institutional segments, gave business a boost.

    “Although much focus has been placed on disinfection, we are seeing a growing awareness, prompted by the CDC guidance, related to the importance of thorough pre-cleaning process,” said Fonesca. “The idea is that for disinfection to be most effective, it is required to remove dirt and excess soils prior to the disinfection process.”

    Like other surfactant suppliers, BASF executives noted increased demand for hand sanitizers and cleaning wipes and their associated ingredients. Ingredients for hand wash and hand sanitizers for personal care, and automated dishwashing and disinfecting wipes/cleaners for home care have a positive momentum, as well.

    Locus Performance Ingredients evaluated a multitude of CPG markets and placed a specific focus on areas with the largest opportunity—starting with personal care. Company executives note that, despite the pandemic, there’s still growing regulatory restrictions and consumer demand driving the need for more sustainable ingredients with better performance. Last month, Locus launched the Ferma S line of pure sophorolipids for personal care applications.

    The Ferma line offers GMO-free, bio-based, readily biodegradable, non-toxic and non-irritating ingredients with multifunctional benefits in skin care, hair care, body wash and a myriad other personal care applications. Ferma formulations are non-ethoxylated, and 100% free of 1,4-dioxane and palm oil. According to Locus, they can be customized to solve a multitude of personal care industry pain points with no ingredient disclosure issues in New York, California (no Prop 65), or any of the other 12 states with pending ingredient disclosure legislation.

    Massard of Vantage noted that, not surprisingly, many ingredients related to hand sanitizing and overall skin health have been doing extremely well.

    “Demand for jojoba oil for instance has been very strong. Many formulators have recognized the benefits of this DW Jojoba Oil in hand and face cleansers where in-vivo studies have shown that it can contributes to restoring skin hydration,” he explained.

    Humectants used in hand sanitizers and soaps, such as glycereth-26 (Liponic EG-1), have been doing extremely well as they can easily and cost-effectively improve the overall sensorial experience for consumers in such formulations, said Massard. Another strong trend relates to product differentiation. With so many suppliers turning to manufacturing hand sanitizers and hand soaps, there has been a growing need for product differentiation.

    “Vantage has been working with many customers on visual differentiation using our Lipobead range of colored encapsulants,” said Massard. “The colorful capsules are very popular to help make formulations stand out from more basic products.”

    On the surfactant front, sulfate-free and solid formulations are becoming increasingly popular.

    “During our weekly webcasts, we have presented our customers several concepts based on our Metaupon taurate surfactants range in order for them to meet their customers’ expectations with these trends,” he added.

    Innospec’s products are commonly used in rinse-off applications such as shampoo and body wash products—categories that have been pandemic-resistant. Furthermore, there’s been a significant increase in demand for its ultra-mild surfactants for hand wash products especially from customers selling products through big box and grocery stores. Similarly, there’s been gains among customers with a strong online presence or direct to consumer business model. In contrast, there was a drop off in demand from customers and products used mainly in products sold through beauty salons or specialty retail stores.

    “Our home care business has been extremely busy, as the demand for hard surface cleaning has increased due to the pandemic,” explained Pee. “Demand for amine oxides and benzalkonium chloride have been particularly strong; in fact, many of our plants are operating at or near capacity.”

    Like other surfactant suppliers, Shannon reported an increase in demand for ingredients used in cleansers and moisturizers in Croda’s personal care business, prompted by consumers washing their hands more often, as well as an increase in demand for ingredients for household cleaning products.

    “With our broad range of ingredients and flexible manufacturing, we were able to quickly and easily pivot to supplying increased demand for these ingredients,” he said. “We will continue to work with our customers to understand their supply needs and respond accordingly.”

    Increased personal wash and disinfectant protocols stemming from the fight against COVID-19 have boosted demand for Stepan’s anionics and amphoterics going into hand soaps and hard surface cleaners, as well as biocidal quaternaries that are used in sanitizers and disinfectants, said Scott Behrens, VP/GM-global surfactants, Stepan. As of July 2020, Stepan offers 24 US EPA-registered end-use formulations that meet the criteria for applications against emerging viral pathogens, and therefore may be considered for use as hard surface disinfectants against SARS-CoV-2, the novel coronavirus that causes the disease COVID-19. Along with a dedicated biocide team, Stepan has a comprehensive portfolio of over 80 US EPA-approved, end-use formulations that sanitize and disinfect in a wide variety of applications.

    Emily Kalal, Rita Corp., noted that traditional, in-person sales calls are currently non-existent and there’s no sign that will change in the near future.

    “Keeping in touch with our customers is still a high priority and so we are finding our way in this new environment to try and maintain personal contact when it can no longer be in person,” said Kalal.

    “Technology helps in this regard, with the use of Zoom or Microsoft Teams. However, good old-fashioned picking up the phone, we have found, also goes a long way. A lot of people may be feeling isolated now, and for good reason, so keeping in touch is a very important aspect of not only our businesses but frankly our health and safety.”

    Massard agreed that the pandemic has taken a toll on mobility, but it doesn’t mean less contact with customers.

    “In order to support our partners, Vantage has dedicated more resources on virtual events and meetings. If anything, we almost feel we spend more time with our customers than before,” he insisted.

    Vantage has organized almost weekly webcasts globally to support formulators with COVID-19 updates and new inspirations aimed at helping them address the changing habits of consumers during the pandemic, and beyond it.

    “To some extent, the pandemic actually seems to have accelerated some of the changes we had already started to see earlier,” Massard told Happi. “In order to accompany our customers in their transition to cleaner beauty solutions, or vegan formulations, Vantage has issued new guides and literature that will help formulators better navigate the extensive portfolio of ingredients already available to them.”

    In place of in-person technical training, Innospec has held numerous webinars for customers addressing the current trends in new product formulating. Topics have included 1,4 dioxane, formulating new textures, formulating mild hand wash products and formulating salt-free products.

    According to Pee, internal communications has increased and is driving new product development faster than in the past.

    As a startup, Locus Performance Ingredients is in the fundraising and customer growth phase—both of which are based on building strong relationships, explained Staub. The restrictions in face-to-face meetings and opportunities to see facilities in person makes that challenging, and creates the need for strong virtual/digital assets.

    “We will have to rely heavily on videoconferencing, webinars, a highly active social media and online presence and an expedited sampling process, and implement elements such as a Live Chatweb feature for technical and sales questions and an investment in robust application laboratory support,” he said. “It will also put focus on onboarding team members that already have trust-based relationships with key investors and companies, since these are difficult to build with the current global travel limitations. The digital B2B space is also rapidly growing which creates an excellent opportunity to partner with leading players in that space to help expand our reach to personal care formulators.”

    Croda, too, is finding new ways to connect with customers digitally, for even greater customer intimacy. On September 9 and 10, Croda will host its first digital sustainability conference bringing industry leaders, technical experts and sustainability pioneers to present and discuss how to create a positive impact on the world. 

    For their part, BASF executives say they’ve been expediting the push for consumer and business digitalization tools. BASF is adapting to the new reality with more video calls, more digital and on-demand content, and new ways to showcase its ingredients and formulations.

    “Our goal is to continue to make our customers’ brands as successful as possible with safe, reliable products delivered on time, and with performance data to back consumer-relevant claims,” they explained.

    According to Fonesca, both Evonik and its customers are adapting to what is increasingly looking like a more dynamic and safer model for doing business.

    “Surely, in-person customer interactions like conferences and face-to-face meetings will eventually resume, but these will be complemented by acceptability in the use of new digital interaction platforms,” he explained.

    Evonik has been investigating digitalization of our business practices for some time, and the pandemic has accelerated these activities to enable our team to have more video meetings with customers, hold and participate in webinars, and keep the communication with customers ongoing.

    At the beginning of this year Evonik Cleaning Solutions launched a customer digital platform called intoCleaning (intocleaning.evonik.com), which groups together the company’s cleaning solution resources like videos, documentation, sample requests and concepts all in one place. According to Fonesca, the tool has been very helpful to formulators seeking cleaning-related chemical options in the current environment as well as marketing insights that we provide.

    “We are now seeing increased traffic on our website and we are excited to see much more digitalized tools to come to enhance customer relationship,” he said.

    Acme-Hardesty executives predict that virtual meetings, webinars, the art of virtual selling, an increase in marketing activities and technologies that support all of these efforts will stay for the long term.

    “While I do not believe that travel will disappear forever, I do certainly believe that we will end up moving forward with a hybrid model of virtual and in-person interactions,” said Dres-Hajeski.

    According to Anne Gariepy, global marketing communications director at Stepan, with the limited ability to engage in person, there is the need for increased digital marketing and the use of on-line tools, such as enhanced video capabilities and online forums to ensure an easy way for customers to stay abreast of new technologies, news and engage with Stepan. To deliver fast and convenient technical support, Stepan enabled chat on their new website and have set-up virtual collaboration laboratories around the globe. Stepan scientists can collaborate in real time with customers as if they were working in the lab alongside them—offering formulation development support and demonstrations.

    With more companies expanding their reach into cleaning products, both personal care and household, there is increased interest in Coast Southwest’s pre-formulated blends, particularly ones with a natural story and with specialty preservative packages that are free from isothiazolinones and formaldehyde. Using these blends which have optimized ratios of surfactants, makes for quick development of new cleansing products, allowing our customers to get to the retail shelf faster, according to the company.


    What’s New?

    In March, Stepan acquired Logos Technologies LLC’s NatSurFact business, a rhamnolipid-based line of biosurfactants derived from renewable sources. Stepan’s rhamnolipid biosurfactants provide an important new technology across the markets we serve as customers’ sustainability expectations continue to increase.

    “We want to make sure that for the markets we have ambitions to supply and grow into, we’re mindful of the requirements of not only our customers but also the end consumers,” said Stepan’s Chief Technology and Sustainability Officer Jason Keiper. “Stepan is actively developing high-performing, advantageous products as a key pillar of our sustainability commitments.“

    More recently, in July, Stepan Company entered into an agreement with Clariant (Mexico) S.A. de C.V. to acquire Clariant’s anionic surfactant business and associated sulfation equipment located in Santa Clara, Mexico. The transaction is expected to close in the third quarter of 2020.

    “The purchase of Clariant’s surfacant business in Mexico will enhance our ability to support our customers’ growth in the Mexican consumer and functional markets for surfactants,” said F. Quinn Stepan, Jr., Stepan’s chairman, president and chief executive officer.

    As brand-new company, everything at Locus Performance Ingredients was created within the past 12 months—a new team, new product line, new facilities, new offices, new lab and new technology.

    “Our goal is to help improve the surfactant business by providing customized, green biosurfactant ingredients that address the top formulation challenges in the personal care space,” explained Staub.

    Massard pointed out that the Metaupon range of taurate surfactants offered by Vantage is an ideal solution for brands looking at sulfate-free formulations. Vantage has added new technical and marketing positions in the US and Germany to help with growth in this area.

    “Our adaptive innovation applies creative problem solving and rapid execution to help our customers bring their sulfate-free products to market, fast,” he explained. “By actively investing in technical resources and talent, we are committed to supporting our clients with our global reach and local touch.”

    Shannon acknowledged that it is hard to predict the future and what the next normal will look like, but added that Croda’s current strategy of focusing on sustainability and digital engagement will continue to be at the forefront.

    “With our focus on sustainability, we have stated our ambition is to be the most sustainable supplier of innovative ingredients, creating, making and delivering solutions to tackle some of the biggest challenges the world faces,” he explained. “By 2030, we will be Climate, Land and People Positive. COVID-19 may be the challenge of 2020 but creating a sustainable future remains our long-term challenge. We will continue this by expanding our sustainable product offer, such as our 100% bio-based, 100% renewable ECO range of surfactants, and investing in digital capabilities for greater ingredient transparency.”

    At the same time, Croda continues to increase manufacturing for its 100% bio-based, 100% renewable ECO range at its Atlas Point Delaware facility with more than 50 products in the portfolio.

    Over the past two years BASF expanded production capacity for alkyl polyglucosides at sites in Jinshan, China and Cincinnati, OH. Furthermore, there’s ongoing expansion for nonionic surfactants in Verbund site in Antwerp, Belgium. In addition, BASF made upgrades to its surfactant assets in North America to produce the Flex range of low 1,4-dioxane products.

    As previously announced, Evonik is taking steps to build a world-scale plant to supply biosurfactants to customers, and is continuing along this path to create innovative, profitable and sustainable solutions for customers, said Fonesca.

    Acme-Hardesty has made sizeable investment and refocused its efforts as a team to tackle growing need of cleansing products as a result of ongoing pandemic, according to Rishabh Shah, director of technical services. “Our partnership with key principals has enabled us to provide and meet customer demands regarding traditional as well as new innovative surfactant chassis. We offer full bottled up formulation solutions containing solid to liquid surfactants to cater to broader formulation applications and customer needs.”

    Coast Southwest is investing significantly in its surfactants business, which it describes as the cornerstone of its ingredient portfolio. Jarrod Kaltenbach recently joined the company as VP-surfactants, and this quarter, Coast Southwest broke ground on a 105,000-square-foot facility in Arlington, TX that advances our distribution, blending, and manufacturing capability.

    New products, new capacities, new investments—it just proves that even with all the market uncertainty, demand for surfactants will continue. 

    Looking for a new surfactant for your formula? Start here. 
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