Global Market Outlook on Aerosol CMO
Technologically capable suppliers (filling and formulation) are fragmented globally, with presence in Europe and North America.
Industry has to set the priorities right, cost vs. technological innovation, while keeping a tab on logistics cost, when choosing their supply market.Due to the demand for aerosol products, the supply market remains competitive, giving industry an upper hand, with respect to sourcing. Choosing what is important will steer the sourcing strategy between a global and a local one.
The demand for packaging products using aerosol technology is persistently increasing, for the reasons of ease and convenience of usage, especially in the personal care segment. The global aerosol market is expected to reach $6.6 billion by 2023, growing at a rate of around 4–5 percent.
Market Outlook: Europe
Consolidation of production to a single supplier among key markets, such as Germany, France, Switzerland and Spain, can accentuate the bargaining power of Industry. Europe, being a mature supply market, also ranks high in parameters of innovation and supply assurance.
- The aerosol production market has been stabilizing since 2014, with 2016 production hitting 5.6 billion
- Demand from the personal care industry has been the highest
- The product under industry’s portfolio, such as sunscreen, falls under the personal and cosmetics industry, and thus has a competitive supply base in Europe
Market Outlook: China and Brazil
International firms have a footprint in Brazil, yet the market lacks established suppliers, who have tamed the system.Despite seeming like a low-cost destination, many industry prefer countries, such as Mexico, when cost is the major factor for supplier selection.The personal care industry as an end-user segment forms 12 percent of the total demand. Hence, supplier’s experience in personal care/cosmetic products is to be evaluated before supplier selection, as industrial aerosol filling is highly popular in this market.
- The market is plagued with raising labor costs and fluctuating supply & costs of raw materials, thereby forcing many suppliers to import input materials, such as cans and propellants, adding to the layer of costs