The market for Europe Industrial and Institutional Cleaning Chemicals is expected to grow at a CAGR of over 5% during the forecast period. Major factors driving the market studied are accelerating demand from the healthcare industry and rising demand from the food industry. On the flipside, health hazards caused by cleaning chemicals and unfavourable conditions arising due to COVID-19 outbreak are the major restraints, which are expected to hinder the growth of market.
- Emerging use of bio-based cleaning chemicals is expected to offer various lucrative opportunities for the growth of market.
- In terms of the market type, manufacturing sector in food and beverage processing is expected to account for the largest share.
- Based on country, Germany is expected to dominate the regional market.
Key Market Trends
Increasing Demand from Food and Beverage Processing
- The food processing industry demands uncompromising standards of safety, sanitation, and hygiene, which makes the use of cleaning chemicals widely popular in the food processing plants.
- The cleaning chemicals used in the food and beverage industry range from additives, sanitizers, and disinfectants, floor cleaners, and manual cleaning products, to industrial-grade cleaners, like aluminum safe cleaners, chlorinated cleaners, foaming cleaners, heavy-duty aid cleaners, heavy-duty caustic cleaners, CIP and soak cleaners, spray cleaners, and others.
- Besides, antifoams/de-foaming agents are used to eliminate foam from manufacturing, food preparation, and treatment processes, to provide efficient operations and a safe working environment.
- Concerns surrounding food safety, increasing food insecurity, and the consumers’ demand for higher quality and sustainability are some of the factors that have been influencing the performance of the food processing industry. The consumption of processed food remains to be as high as 80% of the total domestic production.
- The food and beverage industry is one of the largest manufacturing sectors, contributing to the European economy. This region hosts around 294 thousand companies in the food and drinks industry. Owing to the presence of a large number of manufacturing companies and facilities, the demand for cleaning chemicals is expected to grow during the forecast period.
- The food and beverage industry in the region has been growing significantly, throughout the past decade. According to the Statista market forecast, the food and beverage industry in this region garnered a revenue of USD 17.5 billion in 2019, up from USD 15.86 billion in 2018, having witnessed a growth of around 10.34%. The revenue is estimated to reach around USD 24.98 billion by 2024.
- However, due to the COVID-19 pandemic, coupled with lockdowns in some major parts of the region, since early 2020, the manufacturing plants and facilities have been shut down, to cope with the situation and to help reduce the spread of the virus. This has reduced the consumption of cleaning chemicals in the manufacturing facilities. Thus, the market for industrial cleaning chemicals is expected to witness a negative impact in 2020, especially in the food and beverage segment.
- Hence, all the above-mentioned factors are expected to affect the industrial and institutional cleaning chemicalsmarket in Europe.
Germany to Dominate the Market
- The German economy is the largest in Europe, and the fifth-largest in the world. In 2019, the German economy grew by about 0.6%, which was its weakest growth rate in the last six years. The economic growth of the country is affected by various factors, such as trade tensions leading to reduced exports and tariff disputes triggered by the US government. However, the country is expected to rise above such fluctuations in its economic performance, over the forecast period.
- At present, like the other European countries, Germany is facing a chronic health issue due to the COVID-19 pandemic, and this is causing economic damage to the nation. Germany is listed among the highly affected countries. However, unlike other European countries, Germany has a low mortality rate, of around 0.3%, which is a silver lining for its economy.
- The GDP of the country is expected to shrink by 7% in 2020, according to the IMF’s predictions, owing to the negative effects of the COVID-19 pandemic. However, the IMF expects the economy to bounce back strongly, witnessing a growth rate of about 5.2% in 2021.
- In Europe, Germany has the largest healthcare market. The annual expenditure on healthcare in the country is estimated to be more than EUR 375 billion, excluding fitness and wellness. With certain demographic changes and high rates of digitalization, the country has been investing in mobile healthcare facility, which is providing a platform for further expansion of the healthcare sector.
- Additionally, due to the COVID-19 pandemic, the government is actively participating in promoting the usage of sanitizers and cleaning chemicals as a preventive measure. Despite the lockdown, the cleaning chemical manufacturing plants have been operating across the country, to meet the increasing demand during this pandemic.
- The country’s food and beverage industry is the fourth-largest industry, which holds a promising outlook for the future. The industry is characterized by its small- and medium-sized enterprise sector, which has over 6,000 companies.
- The food and beverage market in the country witnessed a growth of 9.72% in 2019, reaching a value of USD 1,924.7 million. It is estimated to reach USD 2,812.5 million by 2024.
- The COVID-19 pandemic has resulted in a widespread lockdown, which has led to the shutting down of various industrial and manufacturing facilities for a long period of time. This, in turn, is expected to have a negative impact on the market, due to the reduced consumption of cleaning chemicals in the industrial sector.
- Overall, all such factors are expected to affect the industrial and institutional cleaning chemicals market in the country through the forecast period.
The industrial and institutional cleaning chemicalsmarket in Europe is consolidated, with few players accounting for a significant share of the market demand. Some of the major players in the market include Procter & Gamble, Henkel AG & Co. KGaA, BASF SE, Clariant, and 3M, among others.
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