Hand sanitizer is one of many products crucial to the healthcare industry’s efforts to manage the COVID-19 pandemic, and like those other products, it’s been in very short supply lately. Even before the coronavirus reached more than a handful of cases in places like Europe and North America, it was becoming hard to find on the shelves as people began to stock up. Now, with the full impact of the virus being felt around the world, hand sanitizer demand is higher than ever and manufacturers are increasing production as much as possible to try and keep up. Meanwhile, companies in related industries are entering the market as well, converting production facilities and processes that might otherwise have been idle during the pandemic.
Global hand sanitizer demand skyrockets
Technavio predicts that the global hand sanitizer market will grow by over $12 billion between now and 2024, with the 2020 growth rate estimated at a staggering 650% as the world fights the coronavirus. North America was the largest market for the product in 2019 and will account for over 30% of global growth over the next 5 years, but growth will be higher in Europe as hand sanitizer manufacturers work to dramatically increase the region’s supply.
Hand sanitizer has been deemed such an important product in the fight against COVID-19 that some cities, states, and institutions have been giving it away for free. For example, New York has been producing hand sanitizer and sending it to local governments, which have been using it in public buildings and distributing it to emergency services, healthcare workers, and citizens. This is contributing to demand not only for the sanitizer itself, but for the supplies needed to make it, as governments and other companies begin to manufacture their own.
Regulators loosen restrictions
In order to increase the hand sanitizer supply for both essential services and the general public, regulatory bodies around the world have been relaxing the requirements needed to produce and sell it. The Food and Drug Administration (FDA) in the US produced guidance documents in late March to allow companies other than traditional drug manufacturers to produce hand sanitizer, as long as they used United States Pharmacopoeia (USP) grade ingredients and adhered to World Health Organization (WHO) recommendations. Health Canada has simplified and expedited the application process for licenses to manufacture and package hand sanitizer, and the UK and other countries are implementing similar measures as well.
Numerous companies enter the hand sanitizer market
The high demand and the less strict hand sanitizer regulations mean that numerous companies have been entering the market in order to donate and sell the product. Distilleries around the world are moving to hand sanitizer production, as they already have access to ethanol and face greatly reduced production and sales of their normal products. Manufacturing sanitizer not only helps communities by making the product more accessible, it also helps these distilleries to keep employing their workers and keep their businesses afloat.
Brewers aren’t the only companies entering the hand sanitizer market. Large and small skin care manufacturers are also joining in, with some including moisturizers, organic ingredients, or other features, while some adhere more closely to the basic recipe recommended by the WHO and other organizations. A cannabis company is also joining the manufacturing effort: Global Cannabinoids has formed a new company, Global Sanitizers LLC, to take advantage of its existing ethanol supply chain. The company has already become a leading bulk and wholesale hand sanitizer supplier in the US. Other cannabis dispensaries are entering the industry as well.
Even a space launch startup is entering the global hand sanitizer market. Scotland-based Skyrora has transitioned its entire manufacturing capacity towards COVID-19 products. Its first project is hand sanitizer, having already produced an initial batch and begun to scale up production to over 10,000 250 ml bottles per week.
Keeping the future in mind
Ramping up production or pivoting sharply into a new industry brings both benefits and risks. While it increases the supply of much-needed products during the coronavirus pandemic, eventually the crisis will end and demand will fall. For small businesses with simpler facilities, the transition back to their previous products and processes may be straightforward, but for larger companies that completely rearrange plants or build new facilities, it will be more challenging to switch gears. While this isn’t a reason to avoid the hand sanitizer market, and can help keep organizations in business when they would otherwise need to close their doors, it does call for companies to plan ahead or risk facing losses down the line.
Ingredients matter
In the shorter term, so many companies entering an unfamiliar industry can pose risks both to them and to their suppliers. While manufacturing regulations have been relaxed, companies need to be aware of the different standards put out by various organizations. The WHO has a recommended recipe and alcohol content, but federal and municipal governments may have different standards. In addition, formulations that meet local government standards may not meet the requirements of hospitals and other healthcare providers. Companies entering this market should be aware of who they intend to sell or donate hand sanitizer to and what their needs are, or they may find themselves with product they can’t move.
From the consumer end, looser hand sanitizer regulations mean some products may not be up to standards. While many countries still have strict regulations on what should go into sanitizer, it can be harder to monitor the quality of products being sold by so many new companies. It’s important to keep an eye on ingredient lists when buying products or accepting donations to ensure that the sanitizer is effective and doesn’t contain harmful additives. Sub-standard products are already on the market: for example, recent tests in Dubai found 6 products that didn’t meet approved specifications and contained methanol, which is highly toxic to humans. The increased supply is beneficial overall, but there is still a need for caution.
Suggested reading: The Challenges of Medical Crowdfunding
What’s next for the global hand sanitizer market?
The global spike in demand for hand sanitizer due to COVID-19 is an opportunity and a saving grace for many businesses. Companies have the chance to put their own twists on the product in order to differentiate themselves when selling directly to consumers, and larger entities with strong supply chains can make a substantial difference to both healthcare institutions and consumers. But while demand may remain high for several months to come, manufacturers should still plan for the future and ensure they can safely downsize or transition back to their previous markets once the crisis ends.
Discover more insights into the global hand sanitizer market with Technavio’s market research report, including:
- CAGR of the market during the forecast period 2020-2024
- Detailed information on factors that will drive hand sanitizer market growth during the next five years
- Precise estimation of the hand sanitizer market size and its contribution to the parent market
- Informed predictions on upcoming trends and changes in consumer behavior
- The growth of the hand sanitizer industry across North America, APAC, Europe, South America, and MEA
- A thorough analysis of the market’s competitive landscape and detailed information on hand sanitizer companies
- Comprehensive details on factors that will challenge the growth of hand sanitizer manufacturers
