what’s hot in the chemicals, materials & food industry

What’s Hot in the Chemicals, Materials & Food Industry

Trends, Opportunities, and Challenges Through the Eyes of the Key Participants in the Trends, Opportunities, and Challenges Through the Eyes of the Key Participants in the

Chemicals, Materials & Food IndustryChemicals, Materials & Food Industry

Brian Balmer, Industry PrincipalBrian Balmer, Industry Principal

Chemicals & MaterialsChemicals & Materials

1515thth May, 2014May, 2014

Today's Presenter

Dr. Brian Balmer,

Industry Principal

Frost & Sullivan

2

• 14 years' research experience at Frost

& Sullivan

• Company expert on renewable

feedstocks

• Contributor to the company's Mega

Trends vision

Key Perspectives on Growth in the Chemicals, Materials & Food Industry for 2014

2Light-weighting is once again the focus of attention in transportation applications of chemicals & materials

3Construction & utilities applications see the

1All the leading hot topics are linked to personal well-being issues, such as food production, nutrition, health and personal care

3

4

Companies are getting competitive, investing again in innovation that will enable growth within relatively mature markets such as construction chemicals

3Construction & utilities applications see the broadest range of interests

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A key trend in the future will be a continued growth in interest in health & well-being, and especially an increasing concern over how chemical companies can help to feed the world

Source: Frost & Sullivan analysis

MethodologyClients were asked to list their areas of interest across all five program areas in the

Chemicals, Materials & Food sector

The need to enhance functionality & performance

Improvements in health & wellness

Chemicals & Materials inConstruction & Utilities

Chemicals & Materials in Food, Drugs & Cosmetics

Chemicals & Materials in Transportation

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Globalisation of people, products and processes

Development of a low carbon economy

Construction & Utilitiesin Transportation

Food & Beverage Ingredients

Personal Protective Equipment (PPE)

Chemicals, Materials & Food

Chemicals, Materials & Food—What Participants Saw as Hot Topics in 2014

Rank Market Topic% of Respondents

Nominating as Hot Topic

1 Active Ingredients in Personal Care 20.4%

2 Food Processing Sector Growth Opportunities 18.1%

3 Nutricosmetics & Nutraceuticals 17.3%

4 Construction Chemicals 17.0%

5 Mega Trends for Agro Chemicals and FDC 15.5%

6 Materials for Energy-Efficient Buildings 15.0%

Chemicals, Materials & Food: Identification of Hot Topics, Global, 2014

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7 Food and Beverage Processing Equipment 13.7%

8 Biofertilizer and Biopesticides 13.7%

9 Lightweight Materials in Transportation 13.5%

10 Crop Protection Chemicals 13.0%

11 Flexible Packaging 13.0%

12 Shale Gas Chemicals 12.5%

13 Changing Dynamics in Food and Beverage Logistics 12.0%

14 Coatings and Materials for Waste & Potable Water Pipeline Maintenance 11.2%

15 = Adhesives and Sealants in Transportation 9.4%

15 = Battery Materials for Electric Vehicles 9.4%

Note: respondents were invited to select up to three hot topics in each of the program areas which they track.

Most respondents tracked 1 or 2 of the 5 program areas in the CMF group. Source: Frost & Sullivan analysis

Chemicals, Materials & Food—Hot Topics by Program Area

• Active Ingredients in Personal Care received the greatest number of votes as a hot topic across all of CMF.

• If we look instead at the popularity of each topic solely amongst respondents for the relevant program area, then "Lightweight Materials in Transportation" ranks number 1.

Program Area Number 1 Topic% of Respondents


Chemicals, Materials & Food: Hot Topics Within Each Research Program, Global, 2014

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Chemicals in TransportationLightweight Materials in Transportation

51.0%

Chemicals in Construction & Utilities Construction Chemicals 49.6%

Food & Beverage IngredientsFood Processing Sector Growth Opportunities

45.5%

PPE PPE in Chemical Industry 43.1%

Chemicals in Food, Drug & CosmeticMarkets

Active Ingredients in Personal Care 40.8%

Note: Percentages are higher than those on the previous slide, because these represent only respondents who

were specifically interested in the relevant program area Source: Frost & Sullivan analysis

Chemicals, Materials & Food—Convergence with Other Industries

Many clients are interested in a range of industries beyond their own

Key Industries Tracked in Addition to Company’s Core Markets, Global, 2014

Client's Industry Cross-interest 1 Cross-interest 2 Cross-interest 3

A&D IPC 26% M&I 26% A&T 22%

A&T A&D 49% IPC 42% EPS 37%

CMF M&I 38% EBT 37% EPS 29%

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CMF M&I 38% EBT 37% EPS 29%

EPS EBT 60% IPC 54% M&I 27%

EBT EPS 36% M&I 35% CMF 34%

HC CMF 38% ICT 36% M&I 34%

IPC M&I 47% A&D 31% EPS 28%

ICT M&I 50% IPC 48% A&D and HC 47%

M&I IPC 30% EBT and A&D 19% CMF 18%

N=1,937

Q5 Please select all the industries you will be tracking in 2014? Source: Frost & Sullivan analysis

Interest in Mega Trends

70%

80%

90%

Percentage of Clients Expressing an Interest in Mega Trends

CMF

All clients

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50%

60%

2013 2014

Note: Chart represents the percentage of clients who said

they were interested, in response to the question: "What is

your interest in Mega Trends?"


Ranking of Mega Trends

Chemical companies often prioritise different mega trends from other Frost & Sullivan clients

Overall ranking across all

clients

Ranking for CMF clients

Commentary

New Business Models: Value for Many 2 1 See following slide

Smart is the New Green 2 = See following slide

Health, Wellness, and Well-Being 2 = See following slide

Ranking of Mega Trends, Global, 2014

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Health, Wellness, and Well-Being 2 = See following slide

Beyond BRIC: The Next Game Changers Next in line

Innovating to Zero Next in line

Future of Mobility 1More concerned with enabling technology

e.g. car pooling models than with

materials

Connectivity and Convergence 3 Relatively little impact on material goods

Future Infrastructure Development Next in line

Social Trends Next in line

Note: ranking based on the question: "Below you will see the list of the nine Mega Trends we just introduced.

Please help us prioritizing these Mega Trends by ordering them of importance for you from one to nine."Source: Frost & Sullivan analysis

The Last Word

This is a word cloud generated from all the open text feedback received from the survey respondents. It shows some important areas that were not included in the pre-designed lists of potential hot topics.

Bio-based chemicals

Regional overviewSustainability

Chemical logistics

Nanomaterials Crop protection chemicalsSugar Sustainable energyFood additives

Industry M&A

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Lubricants

Bio-based chemicals

Semiconductor chemicals

Chemical industry process enhancement

Water treatment chemicals

End-markets

Commodities

Food safety

Healthy foods

Lightweight Composites

Chemical safety & regulations

Coatings

Metals

Pharmaceuticals

Antimicrobial ingredients

Chemical industry management

Fertilizers Mining chemicals

Packaging

PPEPulp and Paper chemicals

Technology trends

Borates

Chemicals trading

Food processing

SummaryMany factors in this survey point to the growing interest in Feeding the World as a Mega

Trend

Functionality and performance

Health and wellness

Food Drugs &

Cosmetics

Chemicals &

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Globalisation Low carbon economy

Construction

& UtilitiesTransportation

Feed the world

Chemicals & Materials


Feed the WorldImpact of mega trend on the chemical industry

Land

Crop Technology

Chemicals Opportunities Other Impacts

Fertilisers

Seeds

Seed coatings

No-till practices and impact on bio-

based feedstocks

Crop strains can be optimised both

for food productivity, and other

markets e.g. bagasse as a

composite fibre

Feed the World as a Mega Trend: Opportunities for Chemical Companies Along the Value Chain, Global, 2014

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Growing

Distribution

Consumption

Processing

Agrochemicals

Water treatment for irrigation

Packaging

Materials for transportation and

infrastructure

composite fibre

Biofuels and food v fuel

Technology to compost and recycle

food and packaging wasteSource: Frost & Sullivan analysis

Feed the WorldHow technology from every Frost & Sullivan research practice has a role to play in feeding

the world

Frost & Sullivan practice Relevance to Feed the World

Healthcare Using food industry infrastructure to deliver healthcare

ICT Using mobile communication technology to improve productivity

Automotive, Transportation & Logistics Reducing waste due to poor domestic transport infrastructure

Aerospace, Defence & Security Tackling food fraud

Feed the World as a Mega Trend: Relevance Across Multiple Industries, Global, 2014

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Energy & Environment Anaerobic digestion of food waste to generate green energy

Measurement & InstrumentationBetter resourcing for agricultural monitoring activities, to support sustainable agriculture, address food security and cope with climate variability."


Feed the World Chemical companies using this as a mega trend or driver of strategy

Company Relevance to company strategy

BASF

"Innovations based on chemistry will play a key role in three areas in particular. [One of these is] Food and Nutrition."

Source: BASF Purpose, Principles and Values statement, Dec 2013

BayerIn addition to the business division Bayer CropScience, "Materials from Bayer MaterialScience, namely rigid PU foam insulation, also play an important role in reducing wastage in crop storage and the cool chain"

Feed the World as a Mega Trend: Presence in the Strategy of Leading Chemical Companies, Global, 2014

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in reducing wastage in crop storage and the cool chain"

Dow Megatrend: "Health & Nutrition"

DSM"DSM has been a proud partner of the United Nations World Food Programme, the largest provider of food aid to the world’s hungry, since 2007. In January 2013 this partnership was extended for three years to 2015."

DuPont Megatrend: "Increasing Food Production"

Evonik Megatrend: "Health & Nutrition"


Next Steps

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For Additional Information

Brian Balmer

Industry Principal

Performance Materials

(44) 1865 398634

[email protected]

Noel Anderson

Vice President - Growth Partnership Services

(44) 20 7343 8389

[email protected]

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Bernard Weber

Sales Director, Europe


(44) 20 7343 8352

[email protected]

Mark Hicks

Sales Director, North America


(1) 210 247 2490

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