The European market potential for baobab oil

The European market offers a lot of opportunities to exporters of baobab oil in developing countries. There is a growing demand for natural ingredients coming from both the conventional and the natural personal care sector. Europe has the largest cosmetics market in the world. There is growing demand from the anti-ageing skincare and sun care segments. Baobab oil is mainly used in these two product segments.

1. Product description

The Adansonia digitata tree which provides the kernel of the baobab seed from which baobab oil is extracted is native to Senegal, Zimbabwe, South Africa, Benin, Sudan, Kenya, Botswana, Madagascar, Angola, Namibia and Zambia. Commercial production of baobab oil mainly takes place in Zimbabwe, South Africa, Senegal and Sudan.

Baobab Oil is obtained from the kernel of the baobab seed. The production of baobab oil begins by cracking the fruit open and separating the seeds from the dry powdery pulp. The seeds are first hammer-milled to remove the hard outer coat from the kernel. They are then placed in a screw expeller and cold pressed from the kernel. The oil is then filtered for purity.

Baobab oil has properties that are ideal for a wide range of cosmetic products, encouraging companies to use it in their products. Baobab oil properties include:

• High antioxidant content, which protects the skin from free radical damage;
• High levels of Omega-6 to omega-9 fatty acids, which have anti-inflammatory effects;
• Vitamins, sterols and minerals content, which are all essential for maintaining healthy skin.

Other properties of baobab oil include its ability to:

• Rejuvenate skin cells and wound healing;
• Protect the skin from excessively high and low temperatures;
• Stay moist for a long time;
• Be an excellent moisturiser for the skin.

Table 1: Fatty acid composition of Adansonia digitata commercial oil

Fatty Acids	Chemical Name	Percentage Detected (%) +- standard deviation
Pelargonic acid	Nonanoic acid, methyl ester	0.05+-0.07
Myristic acid	Tetradecanoic acid, methyl ester	0.1+-0.14
Palmitic acid	Hexadecanoic acid, methyl ester	28.5+-0.42
Palmitoleic acid	7-Hexadecenoic acid, methyl ester, (Z)-	0.25+-0.07
Heptadecanoic acid	Heptadecanoic acid, methyl ester	0.17+-0.04
cis-10-Heptadecenoic acid	cis-10-Heptadecenoic acid	0.58+-0.02
Linoleic acid	9,12-Octadecadienoic acid, methyl ester, (E,E)-	0.18+-0.03
Stearic acid	Octadecanoic acid, methyl ester	5.85+-2.05
Oleic acid	9-Octadecenoic acid, methyl ester, (Z)-	25.66+-0.95
Linoleic acid	9,12-Octadecadienoic acid, methyl ester, (Z,Z)-	35.75+-0.35
Linolenic acid	9,12,15-Octadecatrienoic acid, methyl ester, (Z,Z,Z)-	0.5+-0.00
Elaidic acid	9-Octadecenoic acid methyl ester (E)-,	2.8+-0.00
Arachidic acid	Eicosanoic acid, methyl ester	0.7+-0.28

Source: Science Direct

The main applications of baobab oil in the cosmetics industry are in body oils, face creams, moisturising lotions, massage oils, sun care products, bath oils, anti-ageing creams, face masks, shampoos, conditioners and nail moisturisers. Baobab oil is traded under the HS Code 15159090.

Figure 1: Examples of baobab oil products in the European cosmetics market

Source: Various

2. What makes Europe an interesting market for baobab oil?

Europe is an attractive market for baobab oil because of growing demand for natural ingredients from cosmetics companies. They are moving to safer ingredients as consumers look to avoid synthetic ingredients in cosmetic and personal care products. The growing use of baobab oil in anti-ageing and sun care products also presents an opportunity for exporters of baobab oil in developing countries.

The European cosmetics market is the largest in the world. According to Cosmetics Europe, the market was valued at EUR 78.6 billion in 2018. Natural ingredients are increasingly used in cosmetic products. Since they are considered safer for human health and the environment, European consumers are choosing personal care products with cleaner formulations.

This trend is generating demand for natural and organic personal care products in Europe. Figure 2 shows that the European market has been increasing at a steady rate. Ecovia Intelligence research shows the European market was valued at EUR 3.6 billion in 2018.

Demand for natural and organic personal care products is expected to continue to grow in the coming years. Consumers are increasingly seeking personal care products without contentious synthetic chemicals. Natural and organic personal care products are also being promoted by the media as well as by bloggers and celebrities. At the same time, the millennials (born between 1981 and 1996) and Generation Z (born between 1996 and 2010) are seeking greener and more sustainable personal care products.

One of the main segments in the personal care industry that uses baobab oil is anti-ageing products. According to Market Data Forecast, the European anti-ageing products market was worth USD 14.8 billion in 2019. The market is projected to grow at a compound annual growth rate of 5.17 percent until 2024 to reach USD 19.1 billion.

The ageing population in Europe is generating demand for anti-ageing products. According to Eurostat data, the share of the population over 65 years increased in Europe between 2008 and 2018. The share of population over 65 increased in Italy from 20.2 percent in 2008 to 22.6 percent in 2018, in Greece from 20.1 percent in 2008 to 21.8 percent in 2018, in Portugal from 17.7 percent in 2008 to 21.5 percent in 2018, in Finland from 16.5 percent to 21.4 percent in 2018 and in Germany from 20.1 percent in 2008 to 21.4 percent in 2018. Ireland and Luxemburg have the lowest shares, with 13.0 and 14.3 percent respectively.

As European consumers get older, they start seeking anti-ageing skin care products. Some of the most common products are face creams, eye creams, serums and face masks. Important segments are anti-wrinkle products, anti-pigmentation products and anti-stretch mark products.

Baobab oil also has applications in sun care products, thus providing a prospective segment to enter. The global sun care market was valued at USD 11.65 billion in 2018. The market is projected to show a compound annual growth rate (CAGR) of 7.85 percent and be worth USD 17.0 billion in 2024. The European sun protection products market is expected to grow by a compound annual growth rate (CAGR) of 6.1 percent between 2018 and 2024.

The global baobab ingredients industry is expected to grow by 3.5 percent between 2018 and 2024 according to Global Market Insights. It is expected that the market will be worth USD 5 billion by 2024. The European cosmetics industry’s demand for baobab oil is driven by the growing popularity of natural personal care products. Baobab oil is used in specific segments of personal care products, such as anti-ageing and sun care products. According to industry sources, imports of baobab oil to Europe range between 20 tonnes and 40 tonnes.

The main factor preventing growth in the European cosmetics sector is low consumer awareness of baobab oil, preventing more cosmetics companies from using it as an ingredient. Consumer awareness is expected to rise in the future as more personal care companies launch products with baobab oil.

3. Which European countries offer most opportunities for baobab oil?

The most prospective countries for baobab oil are the Western European countries. These include Germany, the UK, France, the Netherlands, Italy and Spain. These countries have the most important markets for cosmetic products in Europe; they also have substantial manufacturing sectors. In countries such as Germany, France and the UK, consumers are also familiar with baobab products.

Germany

Germany has the largest cosmetics market in Europe. According to Cosmetics Europe, the German personal care products market was worth EUR 13.8 billion in 2018. The German natural and organic cosmetics market was valued at EUR 1.3 billion, having a share of more than 9 percent of the total cosmetics market. The demand for natural and organic personal care products is set to continue. The main reason is the growing demand for natural & organic products in Germany.

The German population is also getting older. According to the Spiegel Magazine, the median age of Germany’s population was just under 40 years in 1995. However, it was more than 44 years in 2017. According to Statista, the German anti-ageing products market was worth USD 1.5 billion in 2016. The increasing life expectancy of the German population is expected to boost sales of anti-ageing products.

Important German suppliers of baobab oil include The Essence of Africa, Terra Elements, Shea Thomme, AOT Organic Products, Biopurus and Africrops. German personal care companies that use baobab oil in their products include Apeiron, Martina Gebhardt and Guhl (KAO Group). Personal care products with baobab oil are sold by specialist retailers, as well as drugstores, pharmacies and mainstream retailers. Traders such as Henry Lamotte import baobab oil.

Suppliers of baobab oil in developing countries should target German buyers. Awareness of baobab in Germany is among the highest in Europe.

France

France has the second-largest personal care products market in Europe. In 2018, the market was worth EUR 11.4 billion. The French cosmetics manufacturing sector is the largest in Europe. The French natural and organic personal care products market was worth EUR 720 million in 2018. Consumer demand for natural and organic personal care products is expected to grow in the future, especially since many conventional brands are launching natural and organic lines.

 The French anti-ageing products market is the second largest in Europe according to Statista. It was worth around USD 1.1 billion in 2016. France has an ageing population. Life expectancy has increased by 2 years for men and 1.2 years for women over the past 10 years according to the latest figures from the French statistics agency. This presents an opportunity because baobab oil can be used in anti-ageing cosmetics.

Brands that have personal care products with baobab oil include Florassance, Nina B Cosmétiques & Nature, De Saint Hilaire, Emma Nöel, WAAW, Huiles & Sens, Ladrôme Laboratoires and Laboratoire Haut-Ségala. The French beauty retailer Sephora also uses baobab oil in private label products. Ingredients companies such as Biocosmethic and Naturochim are important suppliers of baobab oil to personal care companies.

France has a prospective market for exporters of baobab oil in developing countries. The popularity of baobab oil is growing in France, as more cosmetics companies launch products.

The UK

The UK cosmetics market was worth EUR 10.9 billion in 2018, making it the third largest in Europe. The UK natural cosmetics market was valued at EUR 360 million in 2018. Despite the UK having one of the largest markets, the uncertainty caused by Brexit (Britain’s exit from the European Union (EU)) casts questions about future developments, particularly when there is a lack of certainty about a future trade deal with the EU, with a no-deal Brexit potentially leading to disruption of supply chains.

 Important cosmetics companies that use baobab oil include Green People, Akoma Skincare, Naissance, Phyto Hair Care, Aromatic Natural Skin Care and Lush.

A potential no-deal Brexit creates uncertainty for suppliers of baobab oil. It may result in disruption of supply chains for natural ingredients. It may take some time to re-negotiate trade deals with developing countries.

Italy

 The cosmetics market in Italy was worth EUR 10.1 billion in 2018, according to Cosmetics Europe. The natural and organic personal care products market has been growing at a healthy rate and was worth EUR 425 million in 2018. The Italian cosmetics market has a large number of domestic brands. Many are small companies that mainly focus on the Italian market. The large number of Italian companies means there are potentially more customers/users of baobab oil in the country.

One of the important suppliers of baobab oil to the Italian market is Baobab Fruit Company. The Baobab Fruit Company also supplies finished products on the Italian market. Other personal care brands that use baobab oil in their products include Allegro Natura, La Saponaria, Essenthya, Aessere, Eterea, Verdesativa, Phitofilos and Mater Natura.

The Netherlands

The Netherlands is an important entry point for natural ingredients to Europe. Tradin Organic is one of the most important traders in Europe. Other market players include personal care companies Chi and Natural Heroes. The mainstream retailer Kruidvat and drugstore Etos also market products with baobab oil under their private labels.

Suppliers of baobab from developing countries should target Dutch importers which usually re-export to other European countries. It is likely that the Netherlands will remain an important export destination for baobab oil in the future, as it is an important entry point for raw materials into Europe.

Spain

The Spanish personal care market was valued at EUR 7 billion in 2018. Natural and organic personal care products are also becoming popular in Spain. Aterimar is a leading importer of baobab oil in Spain. Other market players include the personal care companies Maese Pau and Terpenic Labs.

Exporters of baobab oil should target Spanish importers. Spanish consumers are becoming more aware of baobab and there is growing demand for natural personal care products.

In conclusion, the most prospective countries for baobab oil are Western European countries. European consumers, especially those in Germany, the UK and France, are becoming more aware of baobab oil. Most products using baobab oil in Europe are natural personal care products. Demand for baobab oil is expected to continue to increase in the coming years. The main restraint to higher growth is relatively low consumer awareness of baobab.

4. Which trends offer opportunities on the European baobab oil market

The popularity of natural and organic personal care products is increasing across Europe. There is also a growing demand for certified natural and organic ingredients, such as baobab oil. The ageing population is generating demand for anti-ageing products, presenting an opportunity to exporters of baobab oil in developing countries. However, the coronavirus crisis has caused some disruption in the supply of natural ingredients, including baobab oil.

Growing demand for natural and organic cosmetics

Europe has high consumer demand for natural and organic personal care products. Consumers view natural and organic products as safer since they are free from synthetic chemicals that are harmful to their health. This is one of the major drivers for the use of natural ingredients in cosmetics, such as baobab oil. The European natural and organic personal care products market is expected to continue to grow in the coming years.

The same development is occurring in the sun care sector. Studies have shown that conventional sunscreens can be harmful to marine life as well as human health. Consumers are looking for more natural sunscreens. An example of a company using baobab oil in sun care products is BIO:VÉGANE Skinfood; its Organic Baobab Moisturiser SPF 10 uses baobab oil to protect the skin.

This trend is encouraging European cosmetics companies to use certified natural and organic baobab oil. Thus, certified natural and organic baobab oil presents an opportunity to suppliers of baobab oil in developing countries.

Exporters of baobab oil should look to obtain natural and organic certification, such as NaTrue and COSMOS. NaTrue has over 60 members in more than 30 countries worldwide; it has over 6,000 products certified with the NaTrue label. In spring 2020, over 17,000 products in 60 countries were certified according to the COSMOS ORGANIC or COSMOS NATURAL standard. In addition, over 7,000 ingredients and 6,000 raw materials have the COSMOS CERTIFIED logo.

It is important to inform European buyers if you have certified ingredients. Baobab Fruit Company Senegal is a Senegalese company exporting NaTrue certified baobab oil to the European market.

Increasing demand for anti-ageing cosmetics

Due to its rich antioxidant content, baobab oil is used by the cosmetics industry in anti-ageing personal care products. Europe has an ageing population which is spending more on cosmetic products. The European anti-ageing products market was worth USD 14.9 billion in 2019; it is expected to grow at a compound annual growth rate (CAGR) of 5.1 percent to reach USD 19.4 billion in 2024. The growing use of baobab oil in anti-ageing cosmetics presents an opportunity.

Baobab oil suppliers should try to highlight its characteristics when marketing to cosmetics and personal care companies. As well as high levels of antioxidants, baobab oil has omega-6 omega-9 fatty acids, vitamins, sterols and minerals which are important active properties for anti-ageing cosmetics. It helps moisturise and protect skin and rejuvenates skin cells.

COVID-19 creates challenges for exporters of baobab oil

The global coronavirus pandemic has created a number of challenges for exporters in developing countries. The challenges exporters face are likely to remain for the foreseeable future as different states and governments around the world attempt to tackle COVID-19 with various measures.

Import and export restrictions on goods and quarantine and lockdown measures imposed by governments are key challenges exporters face, as they disrupt global supply chains. For example, some port authorities have forced ships carrying goods to observe 14-day quarantine periods whilst lockdown measures limit economic activity, such as agricultural production and processing. Prices of exporting goods have increased, with the cost of airfreight rising because of flight cancellations. Industry sources have also reported that shipping and transit costs of exporting baobab oil have increased considerably.

Ways to prepare for challenges created by COVID-19 include visiting the website of and contacting government ministries of trade in your country. They are likely to have the latest information about COVID-19 measures and may be able to provide export assistance. Other ways to prepare include speaking to logistic providers and determining the impact of the coronavirus on exporting goods before agreeing terms with European buyers, as well as speaking to buyers and keeping them updated.

This study has been carried out on behalf of CBI by Ecovia Intelligence.

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