The New Zealand Phenoxyethanol Market is estimated to be valued at USD 5.87 Mn in 2024 and is expected to reach USD 8.66 Mn by 2031, growing at a compound annual growth rate (CAGR) of 5.8% from 2024 to 2031.

The phenoxyethanol market in New Zealand is expected to witness moderate growth owing to its efficient antimicrobial properties.

Market Driver – Growing Personal Care Industry

The personal care industry in New Zealand has been witnessing significant growth over the past few years. With increasing disposable income and health awareness among consumers, demand for high-quality personal care products such as cosmetics, skin care creams, hair care products etc. has witnessed a considerable surge. As people are more inclined towards using natural and organic personal care items, the demand for phenoxyethanol as a preservative in these products has also risen steadily.

Phenoxyethanol is widely used by personal care manufacturers due to its excellent preservative properties as well as ability to extend the shelf life of products. It is effective against bacteria, yeasts and molds and is popularly being used across a wide range of cosmetic formulations including lotions, creams, hair colorants and sunscreens. With the personal care sector in New Zealand expanding at a brisk pace, stimulated by changing lifestyles and rising health consciousness post-COVID, it has led to higher consumption of natural cosmetic items which require preservatives like phenoxyethanol.

Market Driver – Increasing Demand for Preservatives

The rising awareness among consumers about importance of using cosmetic and personal care products with natural ingredients is driving significant demand for preservatives obtained from natural sources. Phenoxyethanol is gaining popularity as preservative derived from natural sources like green tea and glycerin. Phenoxyethanol is being widely used as preservative in products like lotions, creams, makeup and hair care items due to its ability to kill or inhibit growth of bacteria, yeasts and molds.

This increasing consumer preference for natural ingredients is a major factor fueling the growth of phenoxyethanol market in New Zealand. Various cosmetic brands have started emphasizing on labels that showcase natural or plant-based formulations to attract health-conscious buyers. Growing trends like zero-waste and clean beauty have further encouraged use of preservatives like phenoxyethanol extracted from green tea and glycerin in personal care items. According to estimates by World Health Organization, sales of natural and organic personal care products grew over 13% between 2018 to 2021 globally. This rise in demand for natural cosmetics is directly benefiting phenoxyethanol market in New Zealand.

Market Challenge – Strict Environmental Regulations

Strict environmental regulations surrounding phenoxyethanol usage is placing limitations on the growth of New Zealand's phenoxyethanol market. Phenoxyethanol is widely used as a preservative in cosmetic and personal care products due to its effective antimicrobial properties. However, it has been restricted for use in baby products in many regions due to potential safety concerns.

New Zealand has implemented stringent limits on the concentration of phenoxyethanol permitted in products for young children and infants. Only up to 1% concentration is allowed, whereas the international standard permits usage of up to 5%. This regulatory threshold set by New Zealand's Environment Protection Authority is more conservative compared to other developed nations like the United States, United Kingdom, and European Union. As a result, many international cosmetic brands seeking to export products to NZ are forced to explore alternative preservative options or develop dual formulations to meet local norms.

The recent trend shows that more than 15% of personal care launches in NZ in 2021 had listed 'phenoxyethanol-free' as a key product attribute according to the ingredient database maintained by the EPA.

Market Opportunity – Investment in Research and Development

Investment in research and development could provide a significant opportunity for growth in the New Zealand phenoxyethanol market. Phenoxyethanol is widely used as a preservative in cosmetics, personal care products, and pharmaceuticals due to its bactericidal and fungicidal properties. However, with rising health consciousness, consumers are increasingly seeking natural and plant-based preservatives that are less likely to cause sensitivity or irritation.

Significant R&D efforts towards discovering new natural preservative alternatives or developing hybrid natural-synthetic preservatives could help companies in this market develop more innovative and sustainable products that meet evolving customer preferences. This will help protect market share from substitutes. Companies may also explore modifying existing phenoxyethanol formulations to make them more compatible with natural and organic ingredients. Successful R&D endeavors will allow companies to command a premium and strengthen their brands as being environmentally responsible.

Data from New Zealand Ministry of Business, Innovation & Employment shows that business expenditure on R&D as a percentage of GDP increased from 1.31% in 2015 to 1.49% in 2019, indicating growing investments.     

Insights, By Product Type: Phenoxyethanol P5 Drives Product Type Segment Growth

Phenoxyethanol P5 contributes the largest share of 55.2% in the New Zealand phenoxyethanol market in terms of product type. This is largely due to P5's versatility and functionality across a wide range of end uses.

Phenoxyethanol P5 is commonly used as a preservative in personal care and cosmetic products due to its effectiveness against bacteria, yeasts and molds. It is valued by personal care formulators for its transparent appearance and mild odor. Unlike some alternative preservatives, P5 does not negatively impact the look or smell of finished products. This makes it well-suited for use in a variety of personal care items ranging from lotions and creams to color cosmetics and hair care.

Phenoxyethanol P5 also finds application in household cleaners and industrial and institutional cleaners. It is an important component of many multipurpose, glass and bathroom cleaners due to its degreasing abilities and preservative properties. P5 helps ensure such products have a long shelf life without spoiling. It is economically priced yet effective, retaining consumer and business buyer interest.

The functionality of phenoxyethanol P5 extends to agrochemical applications as well. It is used as an inactive ingredient in some pesticide formulations to enhance penetration, spread and rain-fastness on treated surfaces.

Insights, By Application Type: Home and Personal Care Fuels Largest Application Segment

Within the New Zealand phenoxyethanol market based on application, the home and personal care segment holds the highest share of 37.3%. This predominance stems from phenoxyethanol's critical role in preserving the hygienic qualities and extended shelf life of numerous daily personal care items.

Personal care formulations requiring phenoxyethanol's preservative properties include lotions, creams, shower gels, shampoos, conditioners, moisturizers and cosmetics like foundations, eyeshadows and lip products. As people maintain busy lifestyles, the ability of such frequently used products to remain fresh between uses becomes more valued. Phenoxyethanol helps ensure this requisite freshness.

Homecare items where phenoxyethanol finds use as a preservative encompass hard surface cleaners, glass cleaners, toilet cleaners, air fresheners and more. Kiwis strive to keep their households clean and smelling pleasant. Phenoxyethanol plays a key role by allowing cleaning products to retain their efficacy even after multiple applications over time.

Aesthetic factors also buoy the home and personal care application segment. Phenoxyethanol is compatible with many formulas, retaining an invisible presence that does not negatively affect end product attributes like smell or looks. It allows items to be designed and marketed as "natural" or with other desired qualities.

The major players operating in the New Zealand Phenoxyethanol Market include BASF SE, Clariant International Ltd, Galaxy Surfactants Limited, Jiangsu Jiafeng Chemical Co. Ltd., and Haihang Industry Co. Ltd.

• September 2023, Dow, a leading company providing wide range of products and services in various sectors, collaborated with LanzaTech, a carbon recycling company, to launch a readily biodegradable cleaning solution EcoSense 2470 Surfactant that utilizes circular carbon capture. This solution meets sustainable standers by incorporating innovative carbon capture technology.
• In July 2022, Specialty chemicals company, LANXESS completed the acquisition of the microbial control business unit of the U.S. group International Flavours & Fragrances Inc. (IFF). Through this acquisition, LANXESS added two production sites to its network in St. Charles, Louisiana, and Institute, West Virginia, both in the U.S. The new business will be integrated into the material protection products business unit of LANXESS. The acquisition will strengthens LANXESS position in the industrial preservatives business.
• In July 2021, Rossari Biotech, a speciality chemicals manufacturer, announced the acquisition of Tristar Intermediates. Moreover, Rossari Biotech will occupy Tristar Intermediate’s business spans in preservatives, aroma chemicals, and home and personal care additives with high-tech distillation facilities.

*Definition: Phenoxyethanol is used as a preservative in various personal care products. Phenoxyethanol is also known as glycol ether or phenol ether. In fragrances, perfumes, cleansers, and soaps, phenoxyethanol is used as stabilizer, preservative, or antibacterial in order to prevent products from losing their effectiveness or spoilage. Phenoxyethanol is used as a fixative for cosmetics, perfumes, and soaps. It is also used as preservative in cleaning & furnishing home care products, pharmaceutical products, ink, toner, and colorant products.

• By Product Type
  • Phenoxyethanol P5
  • Phenoxyethanol P25
• By Application Type
  • Home & Personal Care
  • Paints & Coatings
  • Dyes & Inks
  • Pharmaceuticals
  • Others