The Shea Butter Market is estimated to be valued at US$ $2.32 Bn in 2023 and is expected to exhibit a CAGR of 7.1% over the forecast period 2023 to 2030, as highlighted in a new report published by Coherent Market Insights.
Market Overview:
Shea butter is a fat extracted from the nut of the African shea tree. It has emollient properties and is used in skin care and cosmetics. Shea butter contains fatty acids that moisturize and soothe the skin. It is commonly used in lotions, creams, and balms to treat wrinkles, blemishes, eczema, and other skin conditions.
Market key trends:
The increased demand for natural and organic ingredients in cosmetic and personal care products is driving the growth of the shea butter market. Consumers are increasingly preferring products containing natural ingredients over chemical-laden creams and lotions. Shea butter's healing and moisturizing properties make it a popular natural ingredient in cosmetic formulations. The growing popularity of organic cosmetics is therefore generating high demand for shea butter. Furthermore, shea butter has anti-aging properties that help reduce signs of aging like fine lines and wrinkles. The rising aging population demanding anti-aging skin care is another factor fueling market growth. Continuous promotional activities by key players regarding the benefits of shea butter are also boosting the market.
Porter's Analysis
Threat of new entrants: The shea butter market requires high initial investments and established distribution channels, limiting threat of new entrants.
Bargaining power of buyers: Buyers have moderate bargaining power due to availability of substitutes like cocoa and mango butter.
Bargaining power of suppliers: Suppliers have moderate bargaining power due to seasonal availability of raw shea nuts.
Threat of new substitutes: Substitutes like cocoa and mango butter pose moderate threat. Competitive rivalry: Intense competition exists among existing players.
SWOT Analysis
Strengths: Superior moisturizing properties and extended shelf life of shea butter make it popular in cosmetics.
Weaknesses: Seasonal availability of raw materials leads to fluctuating supplies. Dependency on weather conditions increases production uncertainties.
Opportunities: Increasing demand for natural ingredients in cosmetics and personal care products offers significant growth opportunities.
Threats: Local political instability and uncertain climatic conditions in producing countries pose threats to steady supplies.
Key Takeaways
The global Shea Butter Market Demand is expected to witness high growth, exhibiting CAGR of 7.1% over the forecast period, due to increasing demand for natural and organic personal care products.
Africa dominates the global production of shea butter, with Ghana and Burkina Faso contributing over 80% to global supplies. The European market accounted for the largest share in 2023 and is expected to retain dominance until 2030 due to extensive use of shea butter in personal care and chocolate industries.
Key players operating in the shea butter market are IOI Loders Croklaan, Ghana Nuts Company Ltd., and The Savannah Fruits Company. IOI Loders Croklaan is a major supplier in Europe with integrated sourcing and refining operations. Ghana Nuts processes over 30,000 tons of shea nuts annually and exports to Europe and Asia. The Savannah Fruits Company focuses on empowering women collectors in northern Uganda through sustainable sourcing and fair trade practices.
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