Four years ago, consumers around the world couldn’t get enough of laundry detergents, hand soaps and body washes. Covid-19 concerns had everyone washing their clothes and hands, rinsing countertops, and wiping down door handles and even reusable grocery bags! All that cleaning was good news for surfactant suppliers, as these ingredients play key roles in dirt and soil removal.

More recently, however, there’s been a pullback, or at least a slowdown, in consumer demand for household and personal care cleansers. As a matter of fact, according to recent Circana data, most of the gains in cleaning staples like shampoos, soaps and laundry detergents, can be attributed to price increases (see chart).

Inflation provided a lift in dollar sales, but unit sales remained relatively flat or even declined as wallet-weary shoppers kept closer tabs on spending. Last month, DA Davidson launched a price-tracker database that keeps tabs on 70 SKUs at 16 retailers every week. Since DA Davidson began compiling price data in February 2023, prices rose on 38% of the products tracked, 29% declined and 33% remained stable. Since February of 2024, however, only 26% of product prices increased and 30% decreased. There is good news on the inflation front. The consumer price index (CPI) increased just 0.2% in July, putting the 12-month inflation rate at 2.9%—its lowest since March 2021.

Regardless of the CPI and the broad economy, industry observers say the surfactant industry is built to weather economic downturns.

“I agree that it has been a challenging market over the past few years,” said Kayleigh Foster, head of marketing, HC and I&I cleaning solutions, North America at BASF. “However, I don’t fully agree with the sentiment that demand is universally declining across consumer product categories.”

In the household cleaning products sector, BASF has observed an improvement in consumer demand in 2024.

“This uptick suggests that while consumers are mindful of inflation and economic pressures, their prioritization of cleanliness and hygiene remains strong,” said Foster.

Coast Southwest continues to see strong demand for surfactants from its diversified customer base, said Jarrod A. Kaltenbach, VP-surfactants.

“That likely speaks to the breadth of our surfactant lines. Manufacturers look to us to be a one-stop shop for their surfactant needs. Having been affected by supply irregularities over the last few years, customers want predictable product availability, plus formulation advice and innovative ingredients.”

Others agree.

“It’s not that bad!” said Neil Burns, founder of Neil A. Burns, LLC. “Remember, the vast majority of tonnes of surfactants end up in consumer staple products and so there is some built-in recession resistance. Having said that, a slowdown seems to be in the cards.”

Burns noted that Stepan’s most recent Q2, 2024 results for surfactants showed volume and EBITDA growth but sales decline on lower prices and mix. P&G’s results for FY’24 were OK but mixed and so the company has been signaling caution looking ahead.

“For bright spots, I continue to look to the US vs Europe or China and I look to industrial markets, especially agriculture and perhaps construction-related, including CASE, should the almost certain lower interest rates eventuate in the Fall,” he added.

Burns knows plenty about the surfactant industry. After spending decades in the business and holding key positions at leading suppliers, he formed Neil A. Burns, LLC. His company works with senior management teams and boards in the chemical industry to create value. His monthly blog is read by more than 3,000 subscribers around the world. In addition, Burns produces conferences and training courses devoted to surfactants. His next in-person event is 10th ICIS Asian Surfactants Conference, November 20-21, 2024. For the first time, it will be held in Kuala Lumpur, Malaysia—a country well-known for its palm kernel surfactant production.

“I’ve been producing my conferences for 14 years now and it seems like today there are more new products and companies and developments to talk about than ever before,” explained Burns. “I look forward to seeing many old friends and many new ones in KL in November!”

Burns pointed out that outside of China, whose struggles are well documented, Asia continues to be a high growth, high investment market and, in certain areas, such as K-Beauty, J-Beauty and biosurfactants. And while there has been bad press around palm, especially in the EU, Malaysia and Indonesia continue to make strides in sustainability and product stewardship. RSPO (Roundtable on Sustainable Palm Oil) and MSPO (Malaysian Sustainable Palm Oil) have a lot of credibility in the market, according to Burns, who added that recent investments in the region are not just in palm derivatives.

“For example, see the recent PCC/Petronas JV investment in ethoxylation in Malaysia to name but one,” he said.

That joint venture began producing nonionic surfactants and polyether polyols last Fall.

“While some regions are performing well, global market dynamics remain complex, with varying performance influenced by local economic conditions and consumer purchasing behavior,” noted Foster.

A Mixed Bag

As the Circana data attests, some categories are performing better than others. Foster noted that single-unit dose formats, such as laundry pods and dishwasher tablets, have shown robust growth.

“These products offer convenience and precise dosing, reducing waste and appealing to busy consumers,” she said.

Conversely, hard surface cleaners have underperformed, primarily due to comparisons with the high demand during the covid-19 pandemic. The pandemic led to an unprecedented surge in demand for disinfectants and hard surface cleaners, and as the pandemic pressures eased, demand normalized.

Andrew Miller, senior marketing manager, oral, body and hair care solutions, North America at BASF, said categories like cosmetics and beauty products have underperformed as consumers have reduced their spending on non-essential items and shifted toward more basic personal care products.

The shift toward more basic products may have received a boost from the US Food and Drug Administration (FDA), of all places. Last month, the FDA advised consumers that there is a lack of evidence to show that over-the-counter antibacterial soaps are better at preventing illness than washing with plain soap and water. The information was shared in a consumer update titled: “Skip the Antibacterial Soap; Use Plain Soap and Water,” which was posted online.

FDA went one step further, stating that data also suggest “antibacterial ingredients could do more harm than good over the long-term.”

“Following simple handwashing practices is one of the most effective ways to prevent the spread of many types of infection and illness at home, at school and elsewhere,” said Theresa M. Michele, MD, of the FDA. “We can’t advise this enough. It’s simple, and it works.”

And it’s a bit confusing, too. FDA issued a final rule in 2016 under which most antibacterial active ingredients, including triclosan and triclocarban, could no longer be marketed in nonprescription consumer antiseptic wash products. Those products included liquid, foam and gel hand soaps; bar soaps; and body washes.

In the consumer update issued last month, FDA noted that the 2016 rule didn’t apply to benzalkonium chloride, benzethonium chloride and chloroxylenol.

“Manufacturers are developing and planning to submit new safety and effectiveness data for these ingredients,” FDA shared in the update.

The Agency also included the following statement about other products:

“The FDA’s final rule covers only consumer antibacterial soaps and body washes that are used with water. It does not apply to hand sanitizers, hand wipes or antibacterial soaps used in health care settings, such as hospitals and nursing homes.”

The American Cleaning Institute (ACI) said it was disappointed at the recent consumer guidance. ACI and a group of member company manufacturers of antibacterial soaps and ingredients continue to comply with stringent safety and efficacy requirements set by FDA in the 2016 final rule for consumer antiseptic hand washes, through a multi-year, multi-million-dollar research effort.

“The timing of this consumer update is mysterious, given that there haven’t been any new advisories or findings by FDA that would prompt such a random piece of advice,” said James Kim PhD, SVP-science and regulatory affairs, ACI. “The agency’s public statements could sow consumer confusion about the amount of scientific data and research that manufacturers have submitted over the years on product safety and effectiveness.”

According to Kim, while FDA’s final rule is requiring human clinical efficacy trials to demonstrate that antibacterial soaps reduce the incidence of infectious disease (demonstrating prevention), a lot of research such as in vitro efficacy assays and smaller clinical studies have already been completed and/or published.

“If these products were actually unsafe, companies would take them off the market,” he said, adding that antibacterial soaps are used in healthcare and institutional settings for a reason.

“What FDA ignores is that much of today’s healthcare has moved out of hospital medical facilities and into homecare settings, where there are indeed individuals who are immuno-comprised and/or otherwise ill and may need beneficial over-the-counter antiseptic products,” he explained.

The ACI executive said manufacturers stand behind the product science, research and data submitted over several decades to FDA.

“We urge the agency to refrain from issuing further prejudicial statements as we continue to conduct and share research on these beneficial products,” concluded Kim.

Bio, Bio-Based or Both?

Whether for personal care or home care, formulators seek more sustainable options. That has them formulating with biosurfactants and/or bio-based surfactants. Both have been in the news.

Kaltenbach said Coast Southwest is very excited to be distributing the Holisurf line of biosurfactants from Holiferm, a UK-based business that has engineered a unique fermentation process to produce biosurfactants for a wide range of personal care applications.

Burns told Happi that he recently counted 26 companies involved in the manufacture and sale of biosurfactants made via fermentation.

“Maybe the space is getting crowded although, as I noted in my blog just recently, we are far from peak bio even if some of these companies will not make it all the way,” he said. “The actual installed capacity is minute in this space compared to the market and as long as companies can continue to make headway on cost, growth will be there.”

Burns urged readers not to overlook novel biobased surfactants built on fatty acids and/or carbohydrates. For example, Integrity Biochem built a successful business in the oilfield area and is branching out into personal care and other markets. And while it’s not technically an innovation in chemistry, Burns applauded biomass balance products marketed by CEPSA and others.

“Without biomass balance, most consumer product sustainability goals would be very hard if not impossible to meet by 2030 as promised,” he noted.

Right the First Time

Regardless of product type, Coast Southwest strives to have the right surfactant at the right time with the right quality for customers’ applications. Kaltenbach told Happi that Coast Southwest has the industry’s preeminent flaking capability for the manufacture of high-active personal care surfactants.

The Coast Southwest Paso Robles, CA plant manufactures amides and condition agents including Endamide CIPA surfactant, a naturally-derived nonionic amide used for creating high viscosities and dense luxurious foams in a cost-effect way. Another new ingredient is Enditeric C surfactant, which is a cocamidopropyl betaine that is a key building block for many sulfate-free formulations. Enditeric C is designed to meet today’s consumer demands of low-irritation formulas. Enditeric C Surfactant is the market standard exhibiting low color and low by-products to allow customer formulations to meet the today’s demanding regulatory landscape, according to the company.

Capital Expenditures

Surfactants have always been a cornerstone of Coast Southwest’s business. Kaltenbach notes Coast Southwest is uniquely positioned as both a distributor and manufacturer and the company’s goal is to have the broadest product line in the industry. He explained that the Paso Robles facility, which was acquired a year ago, is proving to be extremely complimentary to Coast Southwest’s nearly 40-year history of leadership in surfactant chemistry.

“The past 12 months are unique in Coast Southwest’s history with the official opening of a new state-of-the-art corporate headquarters in Irving, TX, which includes investments in a new distribution center and expanded laboratory space,” said Kaltenbach. “We added significant surfactant manufacturing by purchasing the Paso Robles, CA plant formerly owned by Lubrizol. “We gained the capability to make sulfates, amphoterics, flaked amides, conditioning agents, esters and quats.”

BASF has made substantial investments specifically focused on expanding its surfactants capabilities to meet the needs of customers. It already announced increased production capacity for alkoxylates in Europe, as well as alkyl polyglucosides in Asia-Pacific and North America, said Foster.

“Additionally, we are investing in the growth of our biomass-balance surfactants,” she told Happi. “This initiative aligns with our commitment to sustainability by incorporating renewable raw materials into our production processes. BASF’s EcoBalanced portfolio provides customers with options that support their environmental and performance goals.”

EcoBalanced range for the detergent and cleaning industry as well as industrial formulators will include 20 biomass-balanced products, whose manufacturing process involves replacing the fossil raw materials used at the beginning of the production chain with renewable materials obtained from organic waste and other sources. Mirroring the principle of green electricity, the renewables proportion is attributed to the respective sales products using a certified mass balance method. Depending on the product, the product carbon footprint (PCF) of items in the EcoBalanced series may shrink by up to 100%, according to BASF. But at the same time, these products perform just as well as conventional counterparts.

What Lies Ahead?

Like battleships and ocean liners, it takes time for the surfactant market to change course. While he doesn’t endorse them, Burns mentioned several companies that are doing some novel things in the category. For example, the aforementioned Integrity Biochem is growing rapidly with novel chemistry, including overseas with a capability contracted in Europe. Ruby Bio is making glycolipids but with a novel composition of matter, different from sophorlipids or rhamnolipids. Potion Ai is a formulating tool built on AI. It is taking off in the cosmetics formulator community enabling incredibly rapid progress from concept to shelf. For now, the tool is free to registered formulators.

“I also like what BASF is doing with its Surfactant Navigator and related tools,” said Burns. “I should also mention a feedstock—alpha olefins that is seeing renewed interest for surfactants. AOS may make a comeback. Let’s see!”

Miller explained that BASF’s primary focus is on developing solutions that excel in performance for new applications.

“By understanding the evolving needs of our customers, we can tailor our products to meet their performance and sustainability requirements,” he said. “We believe in providing effective and efficient solutions that not only fulfill current demands but also anticipate future trends.”

Foster noted that today’s consumers are balancing multiple factors when making purchasing decisions. They want products that perform well, are increasingly more sustainable, and offer good value for money.

“This is why I am optimistic about the future of our industry: the ongoing focus on sustainability and innovative performance presents many opportunities for growth,” she concluded.