New Zealand Phenoxyethanol Market SIZE AND SHARE ANALYSIS - GROWTH TRENDS AND FORECASTS (2024 - 2031)

New Zealand Phenoxyethanol Market Analysis

The New Zealand Phenoxyethanol market size is expected to reach US$ 3.00 Bn by 2031, from US$ 1.90 Bn in 2023, exhibiting a CAGR of 6.23% during the forecast period. The Phenoxyethanol market in New Zealand has been witnessing steady growth over the past decade. Phenoxyethanol is widely used as a preservative in personal care and household products such as cosmetics, detergents, and cleaners owing to its bactericidal and fungicidal properties. The rising cosmetics industry in the country along with growing awareness about personal hygiene among New Zealand consumers has significantly boosted the demand for phenoxyethanol.

New Zealand Phenoxyethanol Market Drivers

• Growing personal care industry: The personal care industry has seen tremendous growth in New Zealand over the past few years. With more people focusing on their health, beauty and hygiene, the demand for a variety of personal care products has surged exponentially. This rise in demand has translated into immense opportunities for preservation ingredients that help extend the shelf-life of products without compromising on quality. Phenoxyethanol in particular has emerged as one of the leading preservation solutions owing to its effective broad-spectrum efficacy against bacteria, yeasts, and molds. It is being widely incorporated across a wide array of personal care formulations including skin creams, lotions, hair conditioners, makeup, sunscreens, and more. Consumers today are well informed and prefer natural based products that still pack the punch. Phenoxyethanol fulfills this need perfectly as it allows products to retain their freshness and consistency without requiring the use of harsh chemicals. As per the Ministry of Health of New Zealand, skincare topped the list of personal care spending followed by hair care in 2021. With market opportunities expanding, phenoxyethanol stands to benefit as the preservation method of choice to infuse wellness within self-indulgence for Kiwis.
• Increasing demand for preservatives: The demand for preservatives has seen significant rise globally over the past few years due to increased awareness around food safety, hygiene and longer shelf life of products. Phenoxyethanol is widely used as a preservative in cosmetics, personal care and household products due to its effective broad-spectrum antibacterial and fungicidal properties. With growing New Zealand cosmetics and personal care industry, the demand for phenoxyethanol as a stabilizing and preserving agent has surged in the country.
• According to UN Comtrade data, the imports of beauty/make-up preparations and skin care preparations in New Zealand increased by 15% from 2020 to 2021. This rising demand for various cosmetic products coupled with stringent regulatory compliance around product quality and preservatives is propelling the phenoxyethanol market growth in New Zealand. Many personal care brands are opting for phenoxyethanol over traditional preservatives such as parabens due to increasing consumer preference for clean label products with natural formulations.

New Zealand Phenoxyethanol Market Restraints

• Strict environmental regulations: Strict environmental regulations have significantly impacted the growth of New Zealand's Phenoxyethanol market in recent years. Phenoxyethanol is used as a preservative in cosmetics, personal care products and other household cleaning items. However, it is also known to have mild toxicity if ingested and able to penetrate the skin. These regulatory changes necessitated revisions to formulations, additional safety and efficacy testing as well as labelling changes across thousands of cosmetic items and household cleaners containing phenoxyethanol. This resulted in major compliance costs and disruptions for companies. Some firms decided to remove phenoxyethanol completely or find alternate preservatives due to the regulatory complexities and costs involved. According to a 2021 report by New Zealand's Ministry for the Environment, the import volume of phenoxyethanol declined by an estimated 15% year-on-year following the classification changes. The shift away from phenoxyethanol, coupled with strict standards, has significantly curbed the growth potential of this market in New Zealand in line with the country's stringent environmental protection goals.
• Availability of substitutes: The availability of substitutes is presenting a major challenge for the growth of New Zealand Phenoxyethanol market. Phenoxyethanol is mainly used as a preservative in cosmetics, personal care and household products due to its effective bactericidal and fungicidal properties. However, there is a growing consumer demand for “safer” products that are free of chemical preservatives. This growing health consciousness among consumers has boosted the demand for natural and plant-based preservatives. The rising demand for natural alternatives is a major concern for phenoxyethanol producers and suppliers. If the trend continues, they may lose huge part of their customer base to the natural preservative producers. Moreover, stringent regulations in various regions also support the shift towards natural ingredients. For example, the European Union has imposed restrictions on the level of phenoxyethanol allowed in leave-on cosmetic products due to safety concerns. Such regulations incentivize companies to find safer substitutes. Therefore, the availability of natural and plant-based substitutes poses a serious challenge to the growth trajectory of New Zealand Phenoxyethanol market in the coming years.

New Zealand Phenoxyethanol Market Opportunity

• Investment in research and development: Investment in research and development could provide tremendous opportunities for growth in the New Zealand Phenoxyethanol market. Phenoxyethanol is widely used as a preservative in personal care products like cosmetics, shampoos, and lotions. As customers increasingly demand natural and safer ingredients, focusing R&D on bio-based and plant-derived preservative alternatives could meet this demand. Researchers in New Zealand are well-placed to leverage the country's natural resources and develop innovative green chemistries for this segment. Sustained investments in advanced research capabilities will be integral to sustaining leadership in the Phenoxyethanol market over the long term. It can unlock innovative pathways for industry players to cater to rising consumer consciousness and participate in shaping global sustainability priorities, thereby propelling overall Market
• Product innovation and new product launches: Product innovation and new product launches present tremendous opportunities for growth in New Zealand's phenoxyethanol market. As consumers increasingly demand natural and sustainable products, manufacturers are innovating to develop variants made from plant-based or organic sources. This allows them to tap into the country's strong health-conscious demographic and growing concerns about chemicals in personal care. The shift to natural preservatives is projected to accelerate. According to Statistics New Zealand, consumers prioritizing environmental sustainability increased from 56% in 2019 to 65% in 2021. This reflects rising climate change worries compounded by COVID-19. Younger Kiwis in particular demand greener products and are willing to pay more for them. By innovating new-to-market preservative solutions from renewable feedstocks, phenoxyethanol formulators stand to attract and retain and expanding demographic as traditional petroleum-derived variants gradually lose favour.

Analyst View Point:

The phenoxyethanol market in New Zealand is projected to experience moderate growth over the next five years. The personal care industry will continue to be a major driver of demand as phenoxyethanol is commonly used as a preservative in cosmetic and beauty products. Rising disposable incomes are allowing consumers to spend more on premium skincare and haircare products. Additionally, increasing health awareness and focus on natural ingredients may surge the demand for phenoxyethanol due to its natural source from green tea and cranberries.

However, stringent regulations around formaldehyde-releasing preservatives present a challenge for market players. Also, high R&D costs for developing natural alternatives could hamper the market expansion. The growing trend of do-it-yourself crafts and natural remedies at home poses threat to some extent. The Auckland region currently dominates the Phenoxyethanol market in New Zealand due to presence of cosmetic brands and will maintain lead.

On the positive side, rising adoption of Phenoxyethanol in home cleaning products and air care applications provides new avenues. Furthermore, rapid urbanization and busy lifestyles are driving the working women population to spend more on premium beauty and personal hygiene products. The market is also expected to get support from increasing awareness about preservatives and their importance in product longevity. Key players could gain by focusing on smaller

New Zealand Phenoxyethanol Market Trends

• Increasing demand for organic preservatives: The demand for organic and natural preservatives has been steadily increasing over the past few years in New Zealand and around the world. Consumers are more aware of the ingredients in their cosmetic and personal care products and are seeking out options that do not contain harsh chemicals. This shift towards organic alternatives is having a major impact on the phenoxyethanol market in New Zealand. As organic and natural cosmetic brands become more mainstream in New Zealand, there is much greater consumer push for natural preservative options. Companies are responding to keep up with these demands. For example, Flourish, a natural bath and body brand in New Zealand, stated that it does not use any synthetic preservatives like phenoxyethanol and only rely on organic plant-based preservatives instead. This shift to organic preservatives by major brands is a strong indicator of changing consumer sentiment. It is significantly affecting the market for phenoxyethanol as alternatives gain popularity. The increasing demand for organic preservatives is compelling the phenoxyethanol suppliers in New Zealand to invest in research and development of natural preservative solutions to meet this market evolution. They need to innovate and provide customers with natural options that are just as effective as traditional synthetic versions in order to remain competitive. This transition will likely continue reshaping the phenoxyethanol industry in the upcoming years.
• Focus on sustainability and eco-friendly products: The growing focus on sustainability and eco-friendly products is having a significant influence on the New Zealand phenoxyethanol market. Consumers are increasingly concerned about the environmental impact of the products they use and purchase. There is a strong demand for personal care items and cosmetics that are free from harsh chemicals and have more natural or plant-based formulations. Phenoxyethanol is a synthetic preservative commonly used in cosmetics and personal care products to extend shelf life. However, some studies have highlighted potential health risks associated with prolonged exposure to phenoxyethanol. The growing sustainability movement and increased scrutiny of product ingredients has made many consumers wary of chemical-sounding names like phenoxyethanol. They prefer items with straightforward, natural formulations they can easily understand. This shifting perspective is prompting companies catering to the New Zealand market to invest in novel preservative technologies and cleaner formulas. The trend towards eco-friendliness is expected to continue gaining momentum, keeping the pressure on brands to reduce reliance on synthetic preservatives and chemicals of concern. This will likely impact phenoxyethanol usage and sales over the coming years.

Figure 1. New Zealand Phenoxyethanol Market Share (%), by Application, 2024

Recent Developments in New Zealand Phenoxyethanol Market

New Zealand Phenoxyethanol Market Segmentation