LACTIC ACID MARKET ANALYSIS

The global lactic acid market size was valued at US$ 3,124.0 million in 2022 and is anticipated to witness a compound annual growth rate (CAGR) of 8.2% from 2023 to 2030. The global Lactic acid market is expanding at a rapid pace due to rising demand in various food applications around the world. The market is also driven by the use of lactic acid in the creation of Polylactic Acid (PLA), which is a biodegradable and compostable thermoplastic that is used in food packaging, automotive and textile industries among others. Additionally, technological improvements in lactic acid production is a major factor driving the market expansion.

Global Lactic Acid Market: Regional Insights

Based on geography, the global lactic acid market is segmented into North America, Europe, Asia Pacific, Latin America, and Middle East & Africa.

North America is expected to dominate the lactic acid market during the forecast period, owing to the large consumer base of packaged foods in this region. The US is one of the largest consumers of lactic acid in the world. Additionally, the country has numerous lactic acid producers and manufacturers. Moreover, the US is home to companies such as ADM and LG Chem that are involved in lactic acid production for the production of plant-based plastics.

Europe is another significant market for lactic acid, with Germany, France, the U.K, and the Netherlands being major exporters of processed cheese. The country is also home to major players in the lactic acid market such as BASF SE, Corbion, Henan Jindan Lactic Acid Technology Co., Ltd, and Futerro.

The Asia Pacific lactic acid market is growing at the fastest rate, owing to the government support and advent of new technologies in this region. The region is also witnessing the development of a Circular Economy Action Plan to reduce the use of non-biodegradable plastics. The market is also growing in this region owing to the strong growth of food and beverages industry.

Figure 1. Global Lactic Acid Market by Region, 2022

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Global Lactic Acid Market Drivers:

Growing demand from end user industries to propel market growth

Lactic acid is one of the most widely recognized organic acids with a wide range of industrial applications. It is used in the culinary, chemical, and pharmaceutical industries. It also serves as a preservative for food & beverages including pickled vegetables, cured meat and sausages, baked goods, and fermented dairy products. It is also used as a chemical intermediate for the production of various medicines.

Increasing demand from personal care industry to augment market growth

Lactic acid can also be found in some liquid cleaners and is used as a descaling agent for kettles, because of its ability to dissolve calcium carbonate deposits from water. It's also being used more frequently in antibacterial hand soaps and dish detergents as a replacement for Triclosan, which can be harmful to the environment. This ingredient is highly beneficial for skin and hence is used for producing various personal care products. In addition to this the global lactic acid market is growing significantly due to increased use of it as an industrial sanitizer and as a metallurgical cleaner.

Global Lactic Acid Market Opportunities:

Wide application of lactic acid is expected to provide potential market opportunities. Lactic acid is a natural compound with probiotic properties which makes it useful in the food and pharmaceutical industry. It is a versatile chemical that is produced by the fermentation of various bacteria species. It is used in a variety of ways from its use in making pickles to its curing properties in meat and fish industry. This acid is also widely used in cosmetics and pharmaceutical products due to its ability to prevent the growth of microorganisms.

Increasing application of lactic acid in manufacturing of polymer is expected to bring bright market opportunities. Besides its usage in the pharmaceutical and food industries it is also increasingly being used in the manufacture of polylactic acid (PLA). PLA is an eco-friendly, biodegradable and compostable thermoplastic which is manufactured by using lactic acid as raw material. This increase in the demand for this product is expected to drive the growth of the global lactic acid market.

Global Lactic Acid Market Trends:

Growing number of mergers and acquisitions in market

Companies in the lactic acid market are focusing on mergers and acquisitions to strengthen their production capacities and product portfolio. For instance, in April 2019, Corbion and Total signed an agreement to build a new lactic acid plant with a capacity of 100,000 tons per year in Europe. In addition, Cargill’s NatureWorks recently appointed IMCD (a prominent distributor of food ingredients and specialty chemicals) to distribute its full Ingeo PLA bioplastic portfolio in New Zealand and Australia.

Major players investing in R&D activities to innovate new technologies

The market is highly competitive and consolidated with the major players investing in R&D activities to innovate new technologies. This enables them to reduce the overall environmental impact of their manufacturing process as well as produce higher quality products with lower costs.

Global Lactic Acid Market Restraints:

High production cost to hamper market growth

High production cost is a key factor limiting the market growth. The lactic acid production process involves expensive raw materials and high energy consumption, which results in low margins for manufacturers.

Fluctuating price of raw materials to restrict market growth         

Lactic acid is produced by the fermentation of carbohydrates such as lactose, glucose, and fructose. Any fluctuation in the prices of raw materials (including sugar and tapioca starch) significantly increase the lactic acid prices. Moreover, in the last few years, climate changes and global warming and have severely impacted cultivation, due to irregular rainfall, which, in turn, has affected the overall crop yield.

Figure 2. Global Lactic Acid Market by Raw Material, 2022

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Global Lactic Acid Market Segmentation:

The global lactic acid market report is segmented into raw material, end use, and region

Based on raw material, the market is segmented into Corn, Sugarcane, Cassava, and Other Crops. Out of which, Corn is expected to dominate the global market over the forecast period as it is renewable, cheap, and abundant in nature. According to a study published by NC State University in 2017 on “BioResources”, approximately 90% of the commercially accessible lactic acid is manufactured by submerged fermentation of corn.

Sugarcane segment is also expected to witness significant growth in the near future and this is owing to the increasing use of sugarcane in production of bioplastics and this segment contributes enormously to the biochemical and food industries.

Based on end use, the market is segmented into Food & Beverages, Industrial, Pharmaceutical, Agriculture, Personal Care, Polylactic Acid, and Others. Out of which, Personal Care is expected to dominate the global market over the forecast period. It is used in the manufacture of various skin care products such as anti-aging creams and hydrating lotions. The growing emphasis on personal grooming is also expected to push the lactic acid market.

Food & Beverages segment is also expected to witness significant growth in the near future. Lactic acid has wide application in the food industry, it helps in increasing the shelf life of milk, baked, and dairy products. It is also widely used in the meat and poultry industry to preserve these products.

Global Lactic Acid Market: Key Developments

In 2019, Galactic restructured its presence in Asia Pacific with the opening of Galactic Import/Export and Galactic Biochemical facility in China and constructed Galactic Japan facility. This move is expected to contribute to the supply of lactic acid in Asia Pacific

In July 2022, SBC Skincare introduced their new Lactic Acid Resurfacing Facial Wash; made with Lactic Acid, an AHA Blend of apple, papaya, orange and pineapple, Glycerin and B5.

In May 2018, Galactic developed concept sheets for two clean label solutions including Galimax Ferment CP and Galimax Ferment CP GF, to prolong the shelf life of bakery products by blocking the growth of molds & yeasts. The aforementioned solutions from Galimax range are obtained from natural fermentation

In October 2020, Futerro launched its initial fully integrated polylactic acid plant in Bengbu (Anhui) Province of China. Annual production capacity of the plant for polylactic acid is 30,000 tons, which is expected to significantly contribute to lactic acid consumption for the production of PLA

Global Lactic Acid Market: Key Companies Insights

The global lactic acid market is highly competitive. This is attributed to continuous launch of new technologies due to ongoing R &D and efforts by value chain participants. Moreover, key players are adopting various business growth strategies in order to expand their presence on regional as well as global basis. Some of the key players in the global lactic acid market are Futerro, BASF SE, Galactic, Henan Jindan Lactic Acid Technology Co. Ltd., Musashino Chemical (China) Co., Ltd., Corbion, thyssenkrupp AG, Dow, Cellulac, and Jungbunzlauer Suisse AG

*Definition: Lactic acid can be found in many foods, including milk, cheese, sourdough bread and some fermented/sour milk products such as yogurt and kefir. It is a colorless, syrupy acid that's formed when bacteria convert glucose to energy in the absence of oxygen.