Shea Butter Market by Type (Unrefined and Refined), Application (Cosmetics & Personal Care, Food & Beverages, and Pharmaceuticals), and Regional Analysis (North America, Europe, Asia-Pacific, and LAMEA): Global Opportunity Analysis and Industry Forecast, 2021-2028

Shea Butter Market

The shea butter market is estimated to be valued at $2,281,864.90 thousand by 2028, surging from $ 799,928.40 thousand in 2020, at a noteworthy CAGR of 14.0%.

Market Synopsis

Inclination of millennials towards the use of vegan cosmetic products is expected to accelerate the shea butter market growth.

However, high cost of shea butter is likely to restrain the market growth.

According to the regional analysis of the market, the Europe shea butter market accounted $338,369.70 thousand in 2020 and is projected to register a revenue of $978,920.00 thousand by 2028.

Shea Butter Overview

Shea butter is extracted from shea nuts largely grown in shea tree. Shea butter is fatty component of the shea nuts and is widely used in various fields such as cosmetics, personal care, pharmaceuticals, and nutraceutical industries. Shea butter offers many benefits of using it as an ingredient in cosmetic products, like it provides extra miniaturization to the dry skin, and repairs the damages and dry skin. Also, it is used in confectionery industries for production of chocolates.

COVID-19 Impact on the Shea Butter Market

Prevalence of COVID-19 pandemic, since 2019, has had a negative impact on the growth of the shea butter products market. As the government of the countries, across the world, have imposed strict transportation restrictions, the shea butter manufactures were unable to procure shea nuts, a raw material for shea butter products manufacturing. This factor has decreased the shea butter market growth. Also, sales of shea butter products have been seriously affected as many shops and convenience stores were completely shut amid lockdown. Moreover, the companies were also shut down due to which the production of shea butter products decreased. This has further led to a major decline in the market shares of shea butter products.

Inclination of People towards Shea butter Products is Projected to Drive Shea Butter Market

Increasing use of shea butter products such as lip balm, soap bar, and body lotion among the millennials owing to inclination of people towards vegan, plant based cosmetic products is expected to drive the shea butter market size in the predicted timeframe. Trend of using shea butter in cosmetic products has increased in the past few years due to its many advantages like high moisturizing effect, and capability to heal and nourish dry skin. Also, shea butter offers many medicinal benefits like it helps protect the skin from any inflammatory sensations and reduces skin allergies. Thus, it is widely used in pharmaceutical industries for the manufacturing of skin ointments. Thus, these factors are expected to increase the shea butter market share in the forecast time period.

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High Cost of Shea Butter is Likely to Restrain the Market Growth

Although shea butter is gaining popularity in confectionery industry for the manufacturing of chocolates, its high cost is anticipated to hinder the market growth of shea butter in the coming years. Shea butter is very expensive ingredient as it is largely exported from Africa with high taxes and also its processing methods are very costly. Also, the presence of many cheap substitutes of shea butter in the market like palm butter is further anticipated to restrict the shea butter market growth.

Increasing Demand for New Shea Butter Products will Serve Various Opportunities for the Manufacturing Industries in the Market

Continuous innovation and launches of new shea butter products are expected to provide a boost to the growth of the market in the near future. Shea butter manufacturing companies are spending a lot of their budget on their research and development activities to meet the demands of their customers and introduce natural cosmetic products made from shea butter. For instance, according to a news published on Premium Beauty News, an online news portal, on October 15, 2021, Faber-Castell Cosmetics, Germany based company, has introduced a new range of airtight wood pencils containing natural ingredients like shea butter which offer natural textures in makeup. Such factors are likely to boost the market growth in the future.

To know more about Shea butter market opportunities, get in touch with our analysts here.

Source: Research Dive Analysis

The unrefined sub-segment is predicted to have the fastest growing market share in the global market and register a revenue of $1,680,499.60 thousand with an increase from $599,027.30 thousand in 2020. This growth is projected to increased demand for unrefined shea butter in the cosmetic industry for manufacturing high quality products like lotion, body cream, and lip balm. As unrefined shea butter is directly extracted from shea nuts and is not chemically processed, it contains large number of beneficial ingredients that help in preventing dry skin. Thus, this factor is likely to boost the shea butter market growth even further.

Source: Research Dive Analysis

The cosmetics & personal care sub-segment of market is projected to have the fastest growth and surpass $215,091.90 thousand by 2028, with an increase from $73,243.20 thousand in 2020. This growth is attributed to increased preference for using shea butter by the industry for manufacturing high quality and vegan cosmetic products. Shea butter has anti-aging properties that has attracted large number of people. Also, it has anti-inflammatory properties due to which it is widely used in lotions and body creams. These factors are likely to generate shea butter market growth.

The food & beverages sub-segment of market is projected to have the highest market share and it is projected to reach $2,022,945.20 thousand by 2028 in a time frame of 2021-2028. This growth is attributed the fact that, the shea butter is widely used in the confectionery industry for the manufacturing of chocolate. Cocoa butter is the most important ingredient in the chocolate industry. But due to its limited supply and high prices, industry players have switched to a less expensive shea butter alternative in place of cocoa butter.

Source: Research Dive Analysis

The Market for Shea Butter in Europe to be the Most Dominant

The Europe shea butter market accounted $338,369.70 thousand in 2020 and is projected to register a revenue of $978,920.00 thousand by 2028. The shea butter market share growth is in Europe region because the region has well established confectionery industries where shea butter is widely used as an alternative to cocoa butter for manufacturing chocolates. Also, the region has rich presence of cosmetic industries where shea butter is used as a base ingredient for product development. These factors are likely to drive the shea butter market in future.

The Market for Shea Butter in Asia-Pacific to have Fastest Growth

The Asia-Pacific shea butter market accounted $143,187.20 thousand in 2020 and is projected to register a revenue of $440,399.90 thousand by 2028. The regional growth is attributed to the presence of countries like Japan and China, where the demand for natural and vegan skin care products is high. Also, in developing countries like India, the demand for shea butter and its products is growing due to high beneficial effects of shea butter on skin and influence of western skin care routine on the women youth. Such factors are responsible for high growth of shea butter market in the region.

Competitive Scenario in the Shea Butter Market

Product launches and acquisitions are common strategies followed by major market players.

Source: Research Dive Analysis

The companies involved in the shea butter market are Empower Village LLC., Bulk Apothecary, Baraka Shea Butter, Vink Chemicals GmbH & Co. KG, The Savannah Fruits, Clariant, Jedwards International, Inc., Akoma Cooperative Multipurpose Society, Ghana Nuts Company Limited, and The Organic Shea Butter Company.

Porter’s Five Forces Analysis for the Global Shea Butter Market

• Bargaining Power of Suppliers: The suppliers in the shea butter market are high in number. Several companies are working on product innovation and development.
  Thus, the bargaining power suppliers is high.
• Bargaining Power of Buyers: Buyers are high in number and have huge bargaining power, they demand best services at low prices. This increases the pressure on the manufacturing companies to offer the best service in a cost-effective way. Thus, buyers can freely choose the product that best fits their preference. 
  Thus, the bargaining power of the buyers is high.
• Threat of New Entrants: New companies entering the market are adopting new shea butter product launches in the market in minimum time frame. 
  Thus, the threat of the new entrants is high.
• Threat of Substitutes: Presence of many cheap alternatives in the market other than shea butter like palm butter is likely to shift the customer’s preference towards different products. 
  Thus, the threat of substitutes is high.
• Competitive Rivalry in the Market: The competitive rivalry among industry leaders is rather intense, especially between the global players. These companies are launching their new products in the international market and strengthening the footprint worldwide.  
  Therefore, competitive rivalry in the market is high.