Hot Melts: A Dynamic, Growing Market
Asia-Pacific is the largest geographical region for hot-melt adhesives, was estimated to be worth $2.9 billion in 2015.
Changing consumer trends taking hold at different rates globally will make hot-melt adhesives a dynamic market expected to grow to more than $7.5 billion by 2021, according to a recent report from Smithers Apex. The report estimates the global market for hot-melt adhesives to be worth $5.45 billion as of 2015; it is expected to reach $7.57 billion by 2021 at an overall compound annual growth rate (CAGR) of 5.6%.
Hot-melt adhesives’ fast setting time makes them suitable for a number of consumer goods, produced or assembled on high-speed production lines. These end-use segments include packaging, personal hygiene products, construction, bookbinding, labelling, tapes and automotive.
“Many of these consumer goods products are driven by economic growth and personal income, population growth and birth rates, as well as lifestyle choices and consumer trends,” said Line Willis, the report’s author. “As a result, hot-melt adhesives demand and market opportunities are very different between the geographical regions, and even between individual countries.”
The global hot-melt adhesive market is a mixture of mature regions with modest growth rates and high market penetration, and some fast-growing regions with a rapid increase in hot-melt adhesives demand due to economic growth, increased personal wealth, and demographic changes. Historically, the largest geographical market for hot-melt adhesives has been North America, closely followed by Western Europe. This picture has changed in the last decade, due to the rapid economic growth and industrial expansion in China. As a result, the Asia-Pacific is now the largest geographical region for hot-melt adhesives, estimated to be worth $2.9 billion in 2015 and forecast to reach $3.71 billion in 2021.
Another trend linked to cost cutting that affects hot-melt demand is reduction in consumption, or the coat weight of adhesives applied to each individual article. Adhesive dispensing equipment suppliers have begun offering tools to significantly lower the coat weight of hot-melt adhesives applied to each item in an effort to reduce adhesive consumption. This trend is witnessed in all major hot-melt applications, including packaging, labeling and personal hygiene products.
The largest market by end-use applications is packaging, which continues to grow due to lifestyle and demographic changes. Smaller single packs of consumer food are on the rise due to changes in family structures, with less of the traditional nuclear family and increasing single-person households. The smaller single pack is also driven by lifestyle changes and the desire for convenience, with the trend of consuming drinks and food “on the go.” The consumer food segment within packaging is less vulnerable to economic downturns in comparison to most other consumer goods products. The hot-melt adhesive market for the packaging sector was estimated to be worth $1.69 billion in 2015, and forecast to be worth $2.34 billion by 2021.
Other areas that will be significant for the hot-melt adhesives market to 2021 include personal hygiene products, also referred to as nonwovens. While market penetration in advanced economies is very high for disposable hygiene products, less advanced economies
have in many cases as low as 15% market penetration in baby diapers, presenting a growth opportunity that will in turn impact the use of hot-melt adhesives.
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