Gum Turpentine Market Trends
Category Intelligence on Gum Turpentine covers the following
- Information relating to market, supply, cost, and pricing analysis
- Hard to find data on cost and TCO models, supplier details, and performance benchmarks
- Macroeconomic and regional trends impacting cost, supply, and other market dynamics
- Category-specific negotiation and sourcing advice
Industry Outlook & Drivers
Gum Turpentine Global Market Outlook:
Market Size (2019): $29.5 billion (expected to grow at a CAGR of 6–7 percent from 2019 to 2022)
Cost Drivers: Turpentine, raw material cost (43 percent)
Key Market Drivers (2019):
• Rapidly rising income and increased per capita spending on personal grooming
• Rising demand for natural fragrances, due to health impact
Key Market Constraints (2019):
• High initial and R&D costs in the Flavors & Fragrance (F&F) business
• Weather fluctuations
• Labor shortage
Porter's Analysis on Gum Turpentine
Supplier Power
- Suppliers to fragrance houses have low power, as this industry is fragmented
- Increase in regulation cost, coupled with erratic supplies of natural ingredients, involves a huge cost in mechanizing and accumulating inventory, which will eventually reduce the profit margins of fragrance houses
Barriers to New Entrants
- Technical capabilities and access to raw materials are the key risks for new entrants in the fragrance industry
- Complying several government regulations on safety and sustainability also prevent new entrants to sustain in the market in the long term
Intensity of Rivalry
- The fragrance industry is highly consolidated with the top 10 fragrance houses, which hold around 80 percent of the total supply
- High competition, coupled with maturing markets, is intensifying the rivalry
- Suppliers are attempting to achieve competitive advantage through technological innovation
Threat of Substitutes
- Switching cost will be high, as most fragrances are formulae patented by FMCG clients
- As the personal care fragrance industry is highly dominated by synthetic ingredients, threat of substitution from natural products is low
Buyer Power
- Consumer companies have to completely depend on unique fragrances manufactured by fragrance houses
- Quality and sustained supplies remain the key factors, which reduces switching among suppliers
