The global industrial hemp market size was estimated at USD 3.9 billion in 2017, expanding 14.7% within two years.. Growing demand for hemp-based food products, including cooking oil, dairy alternatives, flour, and salad dressings is expected to drive market growth. Also, the rising demand for bakery products such as bread and cookies is expected to drive the market.
The industry is witnessing growth on account of increasing consumer awareness pertaining to benefits associated with hemp products. The product is a rich source of omega-3 and omega-6, amino acids, and proteins. These nutrients aid in insulin balance, cardiac function, mood stability, and skin and joint health, which is expected to complement industry growth. Commercial cultivation of the product is restricted in several countries across the globe, on account of which, the industry is largely dependent on import of raw fibers, seeds, and finished products. As of 2017, around 36 countries grew industrial hemp, in accordance with provisions specified by the department of agriculture in respective countries.
Regulators, such as the Controlled Substances Act of 1970, Agricultural Act of 2014, or the 2014 Farm Bill, U.S. Drug Enforcement Agency (DEA), and Industrial Hemp Act 2017 set legislative procedures and allowed THC content in cultivation, processing, marketing, distribution, and consumption. This has majorly influenced industry growth. Processing facilities extract required components from raw hemp with the help of processing and manufacturing equipment. However, low yield availability, lack of harvesting innovations and processing facilities, and difficulties in transporting the product in highly regulated markets are factors hampering market growth.
The political link between industrial hemp and marijuana has resulted in several restrictions on hemp cultivation, processing, distribution, and consumption across the globe. However, increasing liberalization and legalization for hemp cultivation with THC content not more than 0.3 in several countries is expected to have a positive impact on market growth.
The hemp seeds segment is likely to expand by 17.1% within two years, in terms of revenue. This growth is attributed to rising demand for oil, seed-cakes, and various food and nutraceutical items. Nutraceutical products are known for their high fatty acid content and nutritional value. Seeds comprise about 35.0% oil, which contains roughly 80.0% essential fatty acids and 20.0% crude protein.
Fiber accounted for 40.4% of the revenue in 2017 on account of high demand from the textile industry for manufacturing of yarns, spun fibers, and range of consumer and industrial textiles. Hemp fibers are robust, contain high amount of hemicellulose, and have a high absorbent capacity, which makes it useful for the textile industry.
Shivs are the inner core part of stalks harvested from industrial hemp crop and cost half the value of fiber owing to which, it is majorly used in several application industries. Shivs are majorly used in animal bedding and manufacturing of construction and insulating materials, Rising consumer demand for green buildings owing to increasing environmental pollution is expected to drive the shivs segment over the forecast period.
Growing awareness regarding dietary advantages of seed and seed oil derived from the crop and extensive use in cosmetics and personal care industries indicate that the product has higher potential as an oilseed crop than as a fiber. Furthermore, increasing demand for hemp-based technical products, including oil paints, varnishes, biofuel, solvents, and coatings is expected to drive market growth.
The textile industry is one of the largest consumers in the industrial hemp market as it is used in manufacturing apparel, fabrics, denim, fine textiles, and others. It is also used in manufacturing several industrial textile products such as twine, rope, nets, canvas bags, tarps, carpets, and geotextiles. This application segment is expected to grow on account of high strength offered by fibers.
The personal care industry is expected to register a revenue-of 15.9% from 2018 to 2025 on account of high fatty acid content of the product. Body care products containing seed oil reduce skin discomfort by soothing and restoring dry or damaged skin and also help slow down aging process, which is likely to drive demand.
Industrial hemp is an agricultural product and widely used in the animal care industry. Seeds derived from the crop are high in protein content as well as nutritional value and are used in animal feeds and as bird seeds. Shivs and leaves are primarily used in animal bedding, mainly for poultry and horses, owing to low dust and high absorbent property of shivs. This is likely to drive market growth over the next few years.
The automotive industry is projected to expand at a revenue of 13.6% over the forecast period on account of stringent regulations regarding usage of harmful synthetic materials. Different automotive, ground transportation, and aerospace products such as auto parts (i.e., headliners), interior bus panels, and composite parts are manufactured from fibers. This is anticipated to fuel market growth in the coming years.
North America is expected to grow 6.9% in terms of revenue as it is a significant consumer of seed- and fiber-based products, primarily used in food and beverages, textile, and personal care industries. Growing geriatric population and rising concerns about skin diseases and UV protection are expected to drive demand for hemp oil from the personal care industry in the region.
Europe is the third-largest market in terms of volume as well as revenue. Product demand in this region is driven by the growing application of fibers derived from the product in the manufacturing of construction materials, fiberboards, and auto parts. Germany is one of the largest consumers of fiber composites due to its wide scope of application in automotive panels.
In terms of revenue, Asia Pacific is expected to register a 15.9% from 2018 to 2025 due to increase fiber consumption in manufacturing of biodegradable textiles for consumer and industrial applications. Presence of significant supplier countries, including China, India, Australia, and South Korea, is expected to have a positive impact on the region’s growth.
The Central and South America market is driven by a rise in consumption of oil derived from the product for pharmaceutical and food and beverage industry. High use of hemp-based foods and supplements owing to increased health issues such as cardiovascular diseases (CVDs) and other pressing issues is expected to propel growth.
Industrial Hemp Market Share Insights
Companies are focused on increasing cultivation and the number of processing facilities in countries where the plant can be grown legally. Major players in the industry are investing heavily in research and development activities to achieve high yields. These players can penetrate large markets and offer diverse varieties of hemp-derived products to end-use industries. Players involved in the market produce variable quantities and qualities of the product, as well as variants, in terms of seed size and oil composition. Potential yield and processing methods and technologies used for processing, along with the cost of production and returns, play a significant role in driving competition.