LONDON–(BUSINESS WIRE)–SpendEdge has been monitoring the global Fatty acid market and the market is poised to experience spend growth of more than USD 5 billion between 2017-2022 at a CAGR of over 5% during the forecast period. Request Free Sample Pages.
Read the 89-page research report with TOC and LOE on “The Global Fatty Acid Market, Pricing Outlook in Geographies that include APAC, North America, South America, and MEA, and insights into best practices to optimize procurement spend.”
This perceived spend growth will be primarily attributed to the exponential demand growth in the end-user industries that are soaps and detergents, personal care, food and beverage, and construction sectors. The market in APAC is set to witness a substantial spend growth owing to the increase in demand in the processed food and beverage market across the emerging economies such as China, India, Indonesia, Bangladesh, and the Philippines. Additionally, the region also boasts one of the largest areas for the cultivation of raw materials of fatty acids.
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Insights into market price trends:
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Factors such as the global demand-supply ratio and climatic conditions will cause extreme volatility in the prices of raw materials such as palm oil, coconut oil, and tallow. This will act as a major attribute to suppliers’ manufacturing cost which will ultimately impact buyers’ procurement expenses in the fatty acid market.
- Despite the fact that the adoption of automation will reduce suppliers’ reliance on manpower, the growing enforcement of labor laws and increasing minimum wages worldwide will have an impact on personnel costs for suppliers of fatty acids.
What are the strategies that buyers must adopt to optimize procurement spend in this market?
Strategic partnerships with suppliers will play vital roles in unlocking avenues to save costs for buyers during the contract period. Insights into some of the strategies that buyers must follow while negotiating and during the contract period with suppliers are given below:
Partner with suppliers who directly engage with growers and avoid intermediaries
Buyers are advised to engage with suppliers who exhibit strong alliances with growers. This will facilitate buyers with improved cost savings, as suppliers are prioritized by growers in terms of delivery, pricing, and samples. Suppliers will have a higher bargaining power in influencing growers on quantity, type, and area of the crops grown. Buyers are advised to include contract clauses that provide an upper limit on product price to minimize the risk of fluctuations in market prices of raw materials.
Assess value-adds offered by suppliers to improve production processes
Buyers can obtain cost-savings and process improvement ideas by leveraging the industry knowledge and R&D expertise of suppliers to improve production processes. For instance, Cargill offers optimizing services that aid buyers by providing consulting services for improving food and beverage production processes and helps buyers in conserving water, energy, and raw materials.
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Some of the key topics covered in this report are:
- Fatty acid market spend segmentation by region
- Total cost of ownership analysis in the fatty acid market
- Regional spend opportunity for fatty acid suppliers
- Fatty acid suppliers cost structure
- Fatty acid pricing models analysis
- Fatty acid procurement best practices
- Category management objectives
- Cost saving opportunities in the fatty acid market
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