Pharm, Herbal, Consumer Products Drive Plant-Based Chemicals

Demand for plant-derived chemicals in the US is projected to advance 9.2% per annum, including price increases, to $2.9 billion in 2003. Gains will be propelled by strong growth for bulk botanical extracts used in herbal supplements and the continuing discovery of new chemicals and pharmaceuticals derived from plants. Further advances will be driven by continued consumer interest in natural ingredients for value-added cosmetics, toiletries, foods and beverages and the marketing appeal these products have to manufacturers. These and other trends are presented in Plant-Derived Chemicals, a new study from The Freedonia Group, Inc., a Cleveland-based industrial market research firm.

Botanical extracts will continue to register the best growth, nearly 15% annually, based on their use in the fast growing nutraceutical sector, and will become the leading plant-derived chemical type by 2003, with sales of over $1.1 billion. Strong growth will also be registered by other plant derivatives, especially those with pharmaceutical applications. The use of plant-derived chemicals is currently limited primarily to consumer-related markets where their higher price is offset by strong consumer preferences for natural products.

The best opportunities will be in newly developed products, especially those with health or appearance benefits. Thus strong growth is predicted for extracts used in herbal supplements such as St. John's Wort and saw palmetto, medicinal extracts like paclitaxel (used to treat cancer, AIDS and other diseases), and various other plant derivatives such as psyllium, plant sterol, enzymes and plant acids. Most of these products will register double-digit growth through 2003.

Nutraceutical and pharmaceutical markets themselves are expected to experience double-digit growth through 2003, based on the continuous introduction of new products, the renewed emphasis of pharmaceutical companies on plant-based drug discovery and the movement of herbal supplements from a niche market to mainstream use by US consumers. However, food and beverages will remain the largest use of plant chemicals (at least through 2003) due to the significant use of essential oils and other plant extracts as flavors and colors, especially in the large soft drink industry, and the importance of plant gums such as xanthan and alginates in thickening and texturing foods, especially in the growing number of low-calorie applications.

For more information: Corinne Gangloff, The Freedonia Group, Inc., 767 Beta Drive, Cleveland, OH 44143-2326. Tel: 440-684-9600. Fax: 440-646-0484. Email: pr@freedoniagroup.com.