The lactic acid market has been witnessing significant growth over the past few years owing to its increasing applications across various industries like food & beverage, personal care, pharmaceutical, and biodegradable plastics. Lactic acid or 2-hydroxypropanoic acid is an organic acid produced during the breakdown of carbohydrates and is widely used as an acidulant to impart a tart taste to foods and beverages. It has garnered huge popularity as a key component in the production of fully biodegradable and compostable polylactic acid (PLA) plastic. The growing environmental concerns and stringent regulations regarding plastic waste have augmented the demand for biodegradable plastics like PLA, thereby driving the sales of lactic acid.

The global lactic acid market is estimated to be valued at US$ 3,124.0 million in 2024 and is expected to exhibit a CAGR of 8.2% over the forecast period of 2023-2030.

Key Takeaways

Key players operating in the lactic acid market are Futerro, BASF SE, Galactic, Henan Jindan Lactic Acid Technology Co. Ltd., Musashino Chemical (China) Co., Ltd., Corbion, thyssenkrupp AG, Dow, Cellulac, and Jungbunzlauer Suisse AG. Futerro and Corbion captured over 35% of the global market share in 2022.

The demand for lactic acid from the biodegradable plastics industry has grown manifold over the past decade owing to stringent environmental norms. PLA plastic's demand is projected to increase at over 9% annually until 2030.

Technological advancements including enzyme immobilization technology and fermentation process development have enhanced lactic acid production yields. Advanced bioengineering techniques are helping reduce production costs and drive wider market penetration.

Market Trends

Growing preference for eco-friendly products: Stringent environmental protection laws and changing customer preference toward sustainable products are propelling the demand for biodegradable plastics like PLA made from lactic acid.

Rising vegan population: The vegan revolution has bolstered the market for plant-based chemicals and polymers. Lactic acid-based PLA is an ideal substitute for conventional plastics in food packaging and textiles industries.

Market Opportunities

Increasing lactic acid consumption in personal care: Lactic acid and its derivatives find myriad uses in cosmetics and skincare formulations owing to mild exfoliating and moisturizing properties. This paves opportunities for lactic acid producers.

Emerging applications in biodegradable electronics: Researchers are developing novel methods to produce biodegradable electronic devices by replacing conventional plastics with PLA. This emergence opens new avenues for lactic acid producers.

Impact of COVID-19 on Lactic Acid Market
The COVID-19 pandemic has significantly impacted the growth of the lactic acid market. The lockdowns enforced to curb the spread of the virus led to temporary shutdowns of manufacturing facilities, disrupting supply chains. This adversely affected the production and sales of lactic acid in 2020. However, as lactic acid finds extensive usage in the pharmaceutical industry for manufacturing several medicines and drugs, the demand saw an uptick during the pandemic. The increasing demand for personal hygiene and cleaning products also boosted the utilization of lactic acid in these applications.

In the pre-COVID era, the lactic acid market was growing at a healthy pace due to rising consumption in the food and beverage segment. It was widely used as an acidulants and preservative in various packaged foods. The market was also witnessing strong gains from the increasing demand from the textile industry where lactic acid is used for dyeing and finishing of textiles. However, during the peak of pandemic in 2020, the demand from food and beveragesector declined significantly as people avoided dining out. The textile industry also witnessed depressed sales affecting lactic acid consumption.

Going forward, as supply chain disruptions are addressed and economic activities resume post lockdowns, the lactic acid market is expected to get back on the growth trajectory. The demand from pharmaceutical applications will continue to rise with increasing focus on healthcare. The food and beverage sector will also rebounce backed by reopening of restaurants and resumption of normal food consumption patterns. The companies will need to focus on expediting production and improving supply networks to cater to rising demand. Sustainable production practices should also be emphasized to account for environment and social costs of operations.

Europe region generates highest value for Lactic Acid Market
Europe accounts for the largest share of the global lactic acid market in terms of value. The region dominated with over 35% of the total market revenue in 2023. This can be attributed to flourishing food processing and pharmaceutical industries in European countries.

The widespread usage of lactic acid in dairy products, baked goods, meat products along with its utilization in manufacturing several medicines has boosted the consumption levels. Countries like Germany, France, UK and Italy have emerged as major European markets. Strong focus on R&D to explore novel applications of lactic acid along with support forsustainable production from EU regulatory bodies has propelled the European market. The regional market is set to continue its leading position with growing demand from end-use industries.

Asia Pacific represents the fastest growing region for Lactic Acid Market
Asia Pacific market for lactic acid has been expanding at the fastest pace in recent years. It is projected to maintain its status as the fastest growing regional market during the forecast period of 2023-2030. Burgeoning population, rising disposable incomes, growing health awareness and increasing industrialization are some key factors fueling the Asia Pacific market growth.

Countries like China, India and other Southeast Asian economies have emerged as major consumers of lactic acid due to well-established food processing and manufacturing industries. The government push for sustainable business operations is also encouraging lactic acid usage in these developing nations. In addition, improvement in living standards is elevating the consumption of packaged foods, personal care items where lactic acid finds extensive utilization.