The global market for neem extracts, which are used as moisturisers and emollients in cosmetics, is estimated to be worth US$1.32bn by 2020 according to market research.
The forecast, generated by US consulting firm Grand View Research, predicts rising demand from the personal care sector as well as the market for biofertilizers.
Neem extracts, derived from neem trees growing in the Indian subcontinent, are said to be becoming increasingly popular among manufacturers as they not only meet rising consumer demand for natural cosmetics but offer an alternative to companies affected by stringent government regulations on the use of chemical fertilizers.
Cosmetics brands which currently use neem extracts in their products include: Sundari; Dr Hauschka; Nature’s Alchemy; Lavera; Himalaya; Organix South; and Vatika Naturals.
The neem extract market demand in personal care products accounted for less than 15 percent of market revenue in 2013, compared to the biofertilizer market, which accounted for 70 percent. However, the segment is expected to witness the fastest growth on account of gaining importance of herbal cosmetics and beauty products especially in Asia Pacific and Europe.
Asia Pacific was the largest neem extract market in 2013, accounting for more than 40 percent of global revenue.
Increased R&D expenditure by health care companies towards new technology development coupled coupled with increasing use of neem based products in North America and Europe is expected to augment market demand.
Europe is also predicted to witness growth on account of increasing adoption of neem based fertilizers and herbal beauty products in the personal care segment.
The predicted growth of the global market is sizable, given that it was worth US$410m in 2012.