Regional Market Outlook on Sorbitol
European sorbitol production is expected to increase by approx. 5% in 2018, since the major producers, such as Cargill, Roquette, and Beneo, are investing in expanding capacities to meet the ongoing demand.
Sorbitol is a highly consolidated market, dominated by Roquette and other global suppliers. Global production of sorbitol is estimated to grow by 10% during 2016–2018.
- Sorbitol accounts for 59 percent of the total polyol production (3.301 MMT) in the world
- Pharmaceuticals and cosmetics segments drive demand in the EU, with major suppliers, like Roquette, headquartered in this region. France, Germany and the UK are the major consuming regions
- French Roquette Freres is the largest producer of sorbitol, with several other international production bases with its production capacity of 0.59 MMT/year. Cargill, Roquette, and Beneo are expecting an additional capacity of 12 Th MT, 18 Th MT, and 9 Th MT, respectively, by 2019
Demand by End-use Applications
Buyers from personal care industry have higher bargaining power compared to other sectors, since they utilize more than 30% of the sorbitol produced.
The market for sorbitol is growing, mainly driven by increased demand for toothpaste, cosmetics, and food & beverages.
- Sorbitol is used in humectant, sweetener, bulking agent, stabilizer, softener and emulsifier, and surface-active properties
- The majority of demand arises from the toothpaste and food & beverage industries
- Oral care products, like toothpaste, represents the largest consolidated market base for sorbitol producers, and is a top-priority industry
- Use in toothpaste, food and confectionary, and in the manufacture of Vitamin C accounts for approx. 75% of the global demand
- Sorbitol demand from these end-use industries is the permanent driver of the market, however, launch of new products in food sector, such as Starburst (Mars-Wrigley), Gumipod, New Galatine (Katjes), Trebor Ranges (Mondelez) in Q4 2017, accelerated its demand recently
Price Trend Analysis
Sorbitol price could witness a downfall in the future, since demand is expected to be balanced by the capacity expansion of leading players and anticipation of short survival of the incremental impact of new product launches in the sorbitol market.
Increased number of new product entries with sweeteners, such as Starburst (Mars-Wrigley), Gumipod, New Galatine (Katjes), Trebor Ranges (Mondelez) as a result of new market trends of sugar free, less calories, etc., increased the demand for sorbitol and other sweeteners in 2017.
- The recent price augmentation was mainly due to supply shortage for an unforeseen demand, due to new product launches in the FMCG industry
- This high demand started as of September 2017, as Q4 is the main product launch time in the FMCG industry in Europe. Number of launches in Q4 is approximately 5 times of the number of launches in Q3
- The new product launches, which influenced the sorbitol market, is expected to short live, since these product launches with sweeteners were mostly used as product news by the FMCG players to strengthen their brands and market positions
- In addition, growth in demand is expected to be balanced with capacity investments by the large European players and sufficient raw material availability
Increase in new product launches in the confectionery sector in the last quarter of every year could influence the sorbitol prices in this period. Thus, sorbitol prices in the first and last quarter of every year is likely to be supported by strong demand from new product launches compared to other quarters of the year.
As manufacturing capacity and capability of suppliers are very critical parameters in the sorbitol industry, important players in the market tend to invest in advance to stay competitive in the market.