Day 19 Supply chain transformation

[TREND 19] Transformation of Supply Chains

[TREND 19] Transformation of Supply Chains

Day 19 Supply chain transformation

The COVID-19 pandemic has caused trade disruptions. One example is the global pharmaceutical industry, which is dependent on China’s exports, as the country is the largest producer of pharmaceutical ingredients. With the virus’ outbreak in China and lockdown impositions, followed by international transportation restrictions, the raw material supply for pharmaceutical drug production from China slowed. This issue has the potential to disrupt pharmaceutical manufacturing in many countries. A large share of medications sold in the United States is produced in China and India, while almost 80% of the United States’ API demand is met by these two countries. As one of the world's largest producers of generic medicines (producing 20% of global generics supply), India imports almost 70% of its APIs from China; therefore, disruption in its supply chain could result in drug supply shortages.​

Furthermore, COVID-19 led to a disruption in the supply of ingredients, particularly imported ones. This led to an increase in prices of ingredients. For example, in the Middle East, the price of PCMC increased by 25%-30% as distributors were struggling to procure PCMC till Q3 2020. ​

The shortages in supply and increasing demand for select products is causing some shock to supply chains. The pandemic made companies more aware of the problems they are facing with their supply networks. While re-shoring of, for example, pharma (API) manufacturing started before the pandemic, the supply chain issues during the earlier days of the pandemic prompted more (Western) companies to look at options for bringing manufacturing back to the West. In addition, governments are now actively promoting re-shoring/local manufacture of certain essential drugs/APIs. The Indian government is planning to boost local API production in India. To facilitate that plan, it has made land and a massive budget available. The government is actively trying to persuade companies to relocate from China to India. ​

As the pandemic has revealed many vulnerabilities in supply chains and raised doubts about globalization, de-globalization and localization could be the natural next steps. The challenge for companies would be to maintain the low cost now expected from consumers and ensured by competition.

#klinetrends #kline2020countdown #supplychain #manufacturing

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Day 18 Chemical carbon

[TREND 18] Chemical Industry transitioning to a Low-​Carbon Economy

[TREND 18] Chemical Industry Transitioning to a Low-​Carbon Economy

Day 18 Chemical carbon

The chemicals industry is shifting toward more carbon-neutral operations implementing circular economy initiatives for more energy-efficient processes while looking into better ways of reducing CO2 emissions. This is further supported by the European Commission who released a chemicals strategy for sustainability in October 2020 as part of the European Green Deal.

“The main goal is to specialize in a portfolio of chemicals that are low-energy in their production, that do not create health or environmental risks, and that can themselves be safely reused and recycled.” The European Plastics Strategy targets the entire lifecycle of plastics and not just the waste management phase. This is expected to drive circular solutions which spread the costs across the product life cycle and supply chain. Businesses including BASF, Clariant, Repsol and others have been investing in sustainability innovation, working to identify ways to produce high-performance materials from recycled waste. Plastics chemicals reprocessing technologies are being developed and promoted as contributing toward recycling chemicals; this includes pyrolysis technologies to convert plastic waste. Developments toward increasing material composability are also taking place. Firms like Polymateria have achieved the biodegradable benchmark set by British standards of plastics breaking down into harmless wax which contain no microplastics or nanoplastics.

Moreover, there is a push towards developing renewable energy sources, carbon-neutral initiatives, and an integrated life cycle that would develop and implement digitalization strategies to enable carbon reduction and accountability and the chemicals industry has been at the forefront of innovation, developing chemicals and materials to enable breakthrough technologies.​

Historically, sustainability was driven by process-risk concerns; however, in more recent years, sustainability funds have outperformed other funds. Several institutions are developing standards to help investors measure ESGs. These institutes include the Sustainable Accounting Standards Board (SASB) and the Global Reporting Initiative (GRI).​

Another push comes from young future leaders who are demanding to work with sustainably driven firms. Employers need to address this demand by promoting sustainable achievements and continuously improving their sustainability initiatives.​

Consumer trends have a significant impact on the drive for sustainability. Consumers are better-informed, and the younger generation is demanding more openness and accountability. The implementation of blockchain across the consumer product value chains will hold product developers accountable for sourcing sustainable raw materials. This will require the investment community to redevelop its strategies.​

The COVID-19 crisis has led to reduced manufacturing utilization, plant shutdowns, and calls for reduced pollution and cleaner air. As the world eventually rebounds from the pandemic, economies will pick up and drive production, arguably at a higher recovery rate than witnessed after the financial crisis of 2008.​

#klinetrends #kline2020countdown #chemicalindustry #chemical #sustainability #innovation
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Day 21 plant based meat

[TREND 21] Buzzwords in Food: ‘Plant-Based’ and ‘Cultured’ Meats

[TREND 21] Buzzwords in Food: ‘Plant-Based’ and ‘Cultured’ Meats

Day 21 plant based meat

Plant-based meat analogs are gaining attention globally, due to the rise of environmental concerns associated with livestock production and the perceived negative health impacts of red meat. The plant-based meat market is strongest in the United States. Meanwhile, significant opportunities abound in Europe and in Asia; in fact, Starbucks revealed that it is partnering with global plant-based leaders Beyond Meat, Omnipork, and Oatly to launch a brand-new, plant-based menu in China.​

How can plant-based meat analogs “behave” like meat? Appearance, texture, juiciness, and flavor are some meat characteristics that industrials are trying to replicate with varying degrees of success. Soy, wheat, and pea are the most widely used proteins. Extrusion processes are highly versatile and established production techniques aim to improve sensorial properties. Upcoming technologies like shear cell and 3D printing might also change the dynamic of the emerging plant-based meat analog market.​

Will cultured meat be a part of our future diets? Following the opening of a “test restaurant” in Israel, Singapore pushed boundaries by becoming the first country to approve lab-grown meat in the form of chicken bites from San Francisco-based startup Eat Just Inc. Cells taken from “source” chickens are cultured in a laboratory, creating potentially endless supplies of muscle and fat tissue. Advocates for the technology argue that if cultured meat can become affordable, it will be revolutionary―and not just in its potential to end, or at least significantly, cut back the meat trade. Millions of startup investment dollars have been poured into developing lab-grown meat.​

#klinetrends #kline2020countdown #plantbased #sustainability #foodindustry #vegan #foodandbeverageindustry

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Day 20 Indies

[TREND 20] Indies Disrupting Beauty and Food & Beverages Industries

[TREND 20] Indies Disrupting Beauty and Food & Beverages Industries

Day 20 Indies

Indie brands such as WLDKAT, PAPR Cosmetics, and Ojook continue to enter the beauty market, often focusing on niche, underserved categories such as deodorants and oral or body care. These categories play into the wellness trend that is rising as a result of an increased focus on self-care during the pandemic.​

The indie beauty market, in general, has leveraged the Internet to best reach the consumer. While recent years showcased the importance of using brick-and-mortar to scale, the COVID-19 pandemic proved that brands valuing safety and community were reigning supreme in the market. By identifying the key places to connect with their target market, either through social listening, Zoom calls, or even SMS marketing, indie brands have worked harder than ever to reach the consumer and create relationships.​

Moreover, indie brands that continue to resonate with consumers often have strong brand identities focused on initiatives. These include sustainability, clean ingredients, transparency, cheeky slogans, and body positivity. In the food and nutrition industry, indie brands that promote health and claim to boost immunity are in demand due to the pandemic. Beyond this, food indies lead the way through unique brand positioning, innovative products, sustainable packaging, and distribution expansion; as a result, they are witnessing strong double- and triple-digit growth.​

#klinetrends #kline2020countdown #nutrition #indiebeauty #personalization #beauty #personalcare #skincare #cosmetics #science #foodandbeverageindustry
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Natural and organic beauty market

[TREND 17] Transition to Clean Beauty and Vegan Cosmetics

[TREND 17] Transition to Clean Beauty and Vegan Cosmetics

Natural and organic beauty market

Historically, brands that are truly natural and organic have collectively outpaced the growth of ones that are simply “nature inspired” (i.e., those that have a natural positioning but are formulated mainly with synthetic ingredients). However, the nature-inspired sector is now poised to outperform the rest of the market for the first time, thanks to the rise of clean beauty. ​

Consumers seem to care less about if the ingredients are natural or not and instead care more about where those ingredients come from and whether or not they are safe. And, more than ever, they expect the brands they buy to stand for something.​

Some of the most successful brands and retailers of late are those that have clean formulations, i.e., those that are mindfully created and produced without the use of potentially harmful ingredients. This has evolved to adjacent themes grounded in sustainability and ethical sourcing. One key theme that gained prominence in 2020 is vegan cosmetics, which takes being cruelty-free to the next level by not only never testing products on animals but also creating formulations that do not contain any animal-derived ingredients such as honey, collagen, or lanolin.

#klinetrends #kline2020countdown #cleanbeauty #beauty #vegan #crueltyfree #cosmetics #naturalproducts #organic

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Bio-Lubricants

[TREND 16] Bio-Lubricants Business Scrutinized

[TREND 16] Bio-Lubricants Business Scrutinized

Day 16 biolubricants

In a response to tightening carbon neutral policies, the contribution of bio-lubricants is now being scrutinized from a life cycle assessment perspective (their from-cradle-to-grave carbon footprint reduction effect). Bio-lubricants constitute a small fraction—less than 2%—of the finished lubricants market globally. However, the average growth rate for bio-lubricants is expected to be above the general trend for finished lubricants. ​

Given the stringent environmental protection policies, along with a strong market pull from a segment of environmentally conscious customers, North America and Europe are the largest bio-lubricants-consuming regions. Both markets tend to adhere to regulations and have high sustainability standards. Additionally, Europe displays a higher willingness to pay a premium if the same performance is provided. This is something that market participants refer to as the “feel-good factor.” ​

Tighter environmental regulations and technological advancements will be key factors shaping the global bio-lubricant market of the future. Improving the technical performance of bio-lubricants will enhance the cost-benefit trade-off of using these products in place of their mineral counterparts. Changing consumer attitudes coupled with “rebuild better” governments initiatives in the aftermath of COVID-19 will also impart momentum to this market.

#klinetrends #kline2020countdown #lubricants #biolubricants #futurefuels #biofuels #biodegradable
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biological crop protection, bopesticides, bopfertiilizers

[TREND 15] Bio Crop Protection

[TREND 15] Bio Crop Protection

biological crop protection

The agrochemical industry has been experiencing a boom in the use of biological-based ingredients for biopesticides as well as the biostimulant and biofertilizer markets.

The global agricultural biologicals market is projected to grow at a CAGR of 13.7% by 2025. It is still too early to determine whether the current pandemic situation will affect such positive projections, as it will take a longer time for the full effects to be seen. However, leading agrochemical manufacturers have already made many investments in developing their biologicals portfolios.

Biological ingredients benefit from the situation because, while many chemical products need to be imported across the world, it is entirely possible for many countries to begin to develop biological inputs domestically. Ingredients such as botanical extracts, humic substances, fungi, and bacteria have the potential to be developed through some countries’ internal laboratory resources and can help develop their domestic supply. There is also an interest in the use of nanotechnology associated with biological inputs and the rise of robotics for its best application and distribution in the field.

#klinetrends #kline2020countdown #sustainableagriculture #biopesticides #biological #cropprotection #fertilizers #pesticide

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MA activity

[TREND 14] Unabated M&A of 2020

[TREND 14] Unabated M&A of 2020

MA activity

While merger and acquisition (M&A) activity was expected to decline from 2019 levels, the impact of the coronavirus in early 2020 slowed it substantially―in some cases, stalling in-process transactions. However, the second half of 2020 is seeing a robust increase in the level of M&A activity. ​

Trade tensions, geopolitical events, and slowing economies caused by the COVID-19 pandemic have had nominal effect on M&A activities in select industries, including deals in the tech space. ​

One of the most notable deals in the beauty industry in 2020 is the strategic partnership between KKR and Coty, which involved the sale of a 60% majority stake in Coty’s Professional Beauty and Retail Hair Business, including the Wella, Clairol, OPI, and ghd brands. Following L’Oréal’s recent acquisition of Thayers Natural Remedies as well as Shiseido’s and LVMH’s purchases last year of Drunk Elephant and Tatcha, respectively, the naturals personal care market has also become a hotbed for future acquisition targets. Several indies in this space, including Lola Cosmetics, Simple Organic, We Love the Planet, and Cannuka, are showing exceptional sale increases.​

The chemicals industry is seeing an increase in activity this year. While the industry experienced a slowdown in organic sales growth across most segments in all regions, many companies have taken this time to consider transactions for business transformation. The year 2020 has witnessed deals closing across the specialty chemicals sector, particularly in the ingredients value chain. Deals have ranged from EQT Partners’ acquisition of Schuelke and IFF’s acquisition of DuPont’s Nutrition and Biosciences to Cargill’s acquisition of creates further acquisitions opportunities.​

An increase in the number of deals is also seen in the agrochemicals market. In October, Syngenta Group announced the acquisition of Valagro, a leading biologicals company. This investment positions Syngenta Crop Protection as one of the key global companies poised to shape the rapidly growing biologicals market. This market is expected to nearly double in size over the next five years. Meanwhile, American Vanguard Corporation announced that its subsidiary, AMVAC Chemical Corporation, acquired the Agrinos group of companies. Agrinos is a privately owned technology leader in biological crop inputs. ​

#klinetrends #kline2020countdown #mergersandacquisitions #privateequity #investmentbanking #mergersacquisitionsdivestitures #diversityandinclusion #agriculture #chemicals #agrochemicals #beauty

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Precision Ag and Agbots  and agrochemicals

[TREND 13] Precision Ag and Agbots

[TREND 13] Precision Ag and Agbots

PRECISION AG AND AGBOTS  and agrochemicals

C-19 has highlighted the benefits of rising technologies such as drone applications as opposed to farm labor; as a result, those technologies could see more investments toward Precision Agricultural systems. Drones are also being tested for application of pesticides, providing exact measurements applied to direct target crops, which will be especially beneficial for vegetation management in hard-to-reach locations.​

Improved tablets, phones, and other connected equipment help farmers translate data into actionable insight that will guide their decisions from growing season to harvest. ​

Sensors play a critical role in agriculture by enabling real-time analysis and trace ability of farm machines and crop states. Crop sensors advise when and where to apply fertilizers, the correct measures needed, and the health of the crops in the field.​

Automation helps agriculture through the use of micro robots and large-scale robotics in evaluation and maintenance of the crops. Ag technology that falls under automation includes robotic farm swarms—the use of many ag robots, which have multiple microscopic sensors that predict, extract, monitor, and cultivate crops. Agbots also fall under this category—robots that automate some of the agricultural processes, such as soil maintenance, irrigation, harvesting, ploughing, fruit picking, weeding, and planting.​

Precision ag continues to be refined to the utmost for maximizing crop yields. The newest term in this developing field is “Hyper-Precision.”​

AgTech investment is on the rise in 2020—the AgTech gold rush has continued since Monsanto first purchased Climate Corp. for $1 billion. Areas to watch are the rise of unmanned aerial vehicles, variable-rate seeding services, field mapping, yield monitor analysis, and satellite imagery.​

#klinetrends #kline2020countdown #agriculture #agtech #robotics #innovation #cropprotection

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Industrial robotics

[TREND 12] New Technologies: AI and Robotics

[TREND 12] New Technologies: AI and Robotics

New Technologies AI and robotics

Automation and robotics cost management solutions will increase over the next decade.​

In response to infectious diseases, and particularly COVID-19, the use of robots is growing dramatically as they help fight coronavirus by replacing humans to deliver groceries, sanitize hospitals, and monitor patients.​

Many companies are now implementing new digital technologies like sensors, algorithms, and other advanced tools. Major oil companies are increasingly turning to aerial drones and underwater robots to examine oil platforms and other offshore equipment for safety inspections and emergency response. BP now has Boston Dynamics’ Spot, a robotic dog, deployed on one of its offshore facilities with the goal of improving employee safety and reducing the company’s carbon footprint by utilizing sensor packages such as methane emission-sensing cameras and audio sensors. ​

In agriculture, drone spraying technology and fully automated drone systems for data gaining, processing, and analysis are gaining momentum. In 2020, Bayer entered into an agreement with XAG, a Chinese agricultural technology pioneer, to commercialize and promote digital farming solutions in Southeast Asia and Pakistan. Syngenta is teaming up with the world's largest consumer drone maker, DJI Technology.​

Robotics offer new opportunities for the lubricants industry. Particularly, industrial lubricants will see a significant boost. New industries, such as hydrogen, robotics, and bio-technology, are set to replace some of the lost volume in conventional industries. Industrial output will recover in line with the recovery of export markets.​

Automation in professional cleaning, including auto-scrubbers for floors, electrostatic sprayers, and UVC lights, are increasingly efficiency when cleaning and disinfecting large areas or surfaces in industrial and institutional settings.​

#klinetrends #kline2020countdown #robotics #industrialautomation #automation #innovation

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