The global Shea Butter Market is estimated to be valued at US$ 2.32 Bn in 2023 and is expected to exhibit a CAGR of 7.1% over the forecast period 2023 to 2030, as highlighted in a new report published by Coherent Market Insights.
Shea butter is extracted from the nut of the African shea tree. It has various beneficial properties such as moisturizing, nourishing, healing and anti-aging properties. It nourishes and hydrates the skin without clogging pores. It aids in reducing scars and other skin imperfections. Shea butter is used in cosmetic products such as lotions, creams, soaps and food products such as chocolate. Due to its emollient properties, shea butter enhances the texture and stability of cosmetic formulations.
Market key trends:
One of the key trends in the shea butter market is the increasing demand for organic and natural ingredients in personal care products. Consumers are increasingly preferring products containing natural ingredients over chemical-based products due to rising health awareness. As shea butter contains beneficial fatty acids and vitamins, its demand is increasing from personal care and cosmetic manufacturers. Moreover, the multi-functional properties of shea butter makes it suitable for use in various applications such as lotions, creams, soaps, etc. This wide range of applications is also contributing to the growth of the global shea butter market.
Threat of new entrants: The threat of new entrants is moderate as the shea butter market requires significant capital investment to establish processing units and supply chain. However, the abundant availability of raw shea nuts in African countries provides opportunities for new players.
Bargaining power of buyers: The bargaining power of buyers is high due to the presence of multiple suppliers. Buyers can negotiate on price and switch between suppliers easily.
Bargaining power of suppliers: The bargaining power of suppliers is low to moderate due to the presence of a large number of raw shea nut suppliers. Suppliers have less differentiation.
Threat of new substitutes: The threat of substitutes is low as Shea butter has unique properties and health benefits. There are limited substitutes having similar functional and nutritional value.
Competitive rivalry: moderate as the market is fragmented with many regional and local players.
The global Shea Butter Market Demand is expected to witness high growth, exhibiting CAGR of 7.1% over the forecast period, due to increasing demand from cosmetics industry. Shea butter is widely used in lotions, creams and other personal care products due to its moisturizing and skin healing properties.
Regional analysis: Africa dominates the global shea butter market, with West Africa being the major producer. Ghana accounts for over 60% of global shea butter production. Other major producers include Nigeria, Burkina Faso, Ivory Coast and Benin. Nigeria and Ghana are the fastest growing markets in Africa driven by increasing industrial processing and exports of shea butter.
Key players operating in the shea butter market are IOI Loders Croklaan, Ghana Nuts Company Ltd., and The Savannah Fruits Company. IOI Loders Croklaan is a leading Dutch-based company producing and supplying shea and cocoa butter on a global level. Ghana Nuts Company Ltd. is the largest shea processor and exporter from Ghana.