HEMP FIBER MARKET SIZE AND SHARE ANALYSIS - GROWTH TRENDS AND FORECASTS (2023 - 2030)

The Hemp Fiber Market size is expected to reach US$ 23.57 Billion by 2030, from US$ 5.76 Billion in 2023, at a CAGR of 22.3% during the forecast period. Hemp fiber is extracted from the stalk of the hemp plant and has gained popularity as a sustainable and durable natural fiber. Hemp fiber is used in textiles, pulp & paper, composite materials, insulation, animal bedding, and other applications owing to its strength, durability, absorbency, and antimicrobial properties. The market is driven by legalization of hemp cultivation, rising demand from textile industry, increasing construction activities, and surging demand for hemp oil.

The hemp fiber market is segmented by source, product type, application, end-use industry, and region. By product type, the market is segmented into fibers, shivs, seeds, stalks, and others. The fibers segment accounted for the largest share of the Hemp Fiber Market in 2022. Hemp fibers are increasingly being used in textiles and apparels owing to characteristics such as natural elasticity, high absorbency, antimicrobial properties, and sustainability.

Hemp Fiber Market Regional Insights:

• North America is expected to be the largest market for hemp fibers during the forecast period, accounting for over 38% of the market share in 2023. The growth of the market in North America is attributed to the legalization of industrial hemp cultivation and rising hemp-based product launches.
• Asia Pacific is expected to be the fastest growing market for hemp fibers, accounting for over 22% of the market share in 2023. The growth of the market in is attributed to low farming costs, rising demand from the textile industry, and increasing legal cultivation.
• Europe is expected to be the second largest-growing market for hemp fibers, growing at a CAGR of over 24% during the forecast period. The growth of the market in Europe is attributed to favorable government policies, rising demand from automotive industry, and demand for hemp fiber in construction industries.

Figure 1. Global Hemp Fiber Market Share (%), by Region, 2023

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Hemp Fiber Market Drivers:

• Legalization of Industrial Hemp Cultivation: The legalization of industrial hemp cultivation in many countries is a major driver for the hemp fiber market. Hemp was banned for decades due to its relation to marijuana, despite having very low levels of THC. However, in recent years, many countries like the U.S., Canada, and European countries have legalized hemp cultivation realizing its industrial benefits. This has significantly increased the supply of hemp fibers and enabled commercial cultivation. For instance, the 2018 Farm Bill in the U.S. federally legalized hemp cultivation providing a boost to American hemp companies. Legalization has also resulted in product innovation, attracting investments in the sector.
• Favorable Government Policies Promoting Natural Fibers: Favorable government policies and initiatives promoting the use of eco-friendly and biodegradable natural fibers in industries like textiles and automotive are driving hemp fiber adoption. Governments across the world are taking initiatives to reduce dependency on non-renewable sources and shift to sustainable materials. For instance, the European Union’s policies and initiatives like the European Green Deal emphasize on a sustainable circular economy. Such policies encourage the use of hemp fiber as a renewable, reusable, and biodegradable alternative to synthetic fibers.
• Growing Adoption in Textiles and Apparels: The textile industry is one of the largest consumers of hemp fiber. Hemp fiber usage in textiles and apparels has been growing significantly in recent years. Brands like Patagonia, Levi’s, and Calvin Klein are using hemp in their products. Hemp fiber possesses properties like anti-bacterial, breathability, and moisture wicking which make it suitable for apparel and home furnishings. Hemp’s sustainability and skin-friendly nature also appeal to environmentally conscious consumers, further driving its demand. The global textile industry’s focus on sustainability is expected to boost hemp adoption.
• Increasing Use of Natural Fibers in Automotive Industry: Hemp fibers are finding increasing application as a lightweight reinforcement fiber in the automotive industry. Automakers are turning to hemp and other natural fibers like flax, jute to reduce vehicle weight and meet sustainability targets. Hemp composites are used to make door panels, headliners, seatbacks, underfloor protection, and other components. Mercedes Benz, Lotus, and other carmakers already utilize hemp composites in vehicles. The shift towards electric vehicles and focus on lightweight materials to enhance range is expected to spur the hemp demand.

Hemp Fiber Market Opportunities:

• Rising Demand for Hemp Based Bioplastics: Hemp fiber’s use in bioplastics and biopolymers presents major growth opportunities. Hemp-based bioplastics are renewable, biodegradable, and ecologically sustainable alternatives to synthetic plastics. With growing environmental concerns over plastic pollution, the hemp bioplastics demand is rising for use in packaging, containers, bags, and other plastic products. Companies are ramping up production capacities to meet the demand. Governments are also promoting adoption of bioplastics through supportive policies and bans on single use plastics. For instance, according to the European Union (EU) 2020 report, the market share for bioplastics in the packaging industry rose from 1% in 2019 to over 3% in 2021.
• Increasing Utilization in Construction Materials: Hemp fiber's use in construction materials is rising driven by demand for green building materials. Hempcrete made using hemp hurds is gaining popularity as a lightweight insulator for walls and roofs. It enhances energy efficiency in buildings. Hemp fiber insulation offers superior thermal and acoustic insulation. Increasing investments in green buildings and infrastructure in the Europe, North America, and Asia Pacific regions to achieve net zero targets will spur utilization in eco-friendly construction materials.
• Product Development & Innovation: Significant opportunities exist for product innovation and development to expand hemp fiber applications. R&D is focused on developing new hemp-based food and beverages, textiles, and intermediate materials for industries. For instance, hemp biomass can enable biorefining and production of fuels, chemicals, and bioenergy. Hemp seeds offer potential to develop meat and dairy alternatives. Such product development along with technological advancements will result in new and innovative uses, thereby driving the market growth.
• Growth in Emerging Economies: Emerging economies across Asia Pacific, Latin America, Middle East, and Africa present immense opportunities for future market growth. These regions have low production and utilization levels currently but are expected to drive future demand. Factors like favorable policies, investments in end-use sectors and increasing awareness of hemp benefits will support widespread adoption. Increasing middle class population, rapid urbanization, and industrialization will also propel hemp the market growth as economies become more sustainable.

Hemp Fiber Market Trends:

• Shift Towards Organic Hemp Fiber: Organic hemp fiber production is a major trend driven by growing consumer demand for organic and natural products. Consumers are increasingly seeking products made from organically grown hemp fiber sourced through environmentally sustainable practices. This has compelled producers and brands to certify their hemp cultivation and manufacturing processes. Companies are partnering with organic farmers and leveraging Blockchain to add transparency to their supply chain. The trend reflects rising eco-consciousness among consumers and industries. For Instances, According to data from the United States Department of Agriculture's Economic Research Service, certified organic cropland for hemp production in the U.S. grew from 3,100 acres in 2019 to 15,400 acres in 2022. States like Colorado, Oregon, and Montana have witnessed major growth in their organic hemp acreage.
• Online Retailing Driving Distribution & Sales: The emergence of online retail channels is a key trend shaping distribution and sales in the hemp fiber market. Consumers are increasingly purchasing products like hemp apparel, food, personal care and supplements through online platforms. To leverage this, manufacturers are partnering with leading e-commerce firms like Amazon and Ebay to enhance their digital presence and sales. Online channels provide wider reach to manufacturers, especially smaller players. Digital marketing, promotions, and consumer engagement on social media platforms further drive online sales. For instance, as reported by the US Environmental Protection Agency, the sale of hemp-based paints and sealants grew by nearly 30% from 2020 to 2022 through major e-retailers. This is indicative of the positive impact online avenues are having on the commercialization and market expansion of different hemp products.
• New Product Development: The hemp fiber market is witnessing high emphasis on research, product innovation and new product development. Companies are investing in R&D to utilize hemp fibers and seeds to develop innovative products and expand use cases. For instance, hemp fiber use in new categories like hemp sunglasses, luggage, and furniture is rising. Hemp seeds are being used to develop plant-based meats, milk, yogurt, and cheese. Cosmetics incorporating hemp oil/extracts are also being launched. Such efforts to diversify product portfolio cater to shifting consumer preferences for sustainable goods.
• Mergers and Acquisitions: The hemp fiber market has witnessed increasing mergers and acquisitions activity in recent years. Large companies are acquiring smaller players to expand production capacities, geographical presence, and product portfolio. Recent M&A deals include Canopy Growth’s acquisition of Supreme Cannabis, Gale Pacific’s acquisition of Canadian hemp processor The Willamette Valley Company. Such consolidation activities allow companies to gain competitive advantage and bolster market position. Acquiring niche technology/expertise is also an incentive for strategic acquisitions. For example, in 2022 Smurfit Kappa, one of the largest paper manufacturers in the world, acquired France Papier, a major hemp pulp producer in Europe. This gives Smurfit Kappa a major supply of hemp pulp for its paper production.

Hemp Fiber Market Restraints:

• High Processing Costs: The high costs associated with hemp fiber processing limit faster and widespread adoption in industries. Hemp stalks undergo a complex, multi-step process including decortication, carding and spinning before fibers can be utilized in textiles and composites. Establishing these capital-intensive facilities requires significant investments, especially for smaller players. Lack of processing facilities creates supply bottlenecks. The labor intensive harvesting and processing adds to overall costs. Mechanization and innovative technologies can help reduce processing costs. For instance, according to 2020 estimates by the European Industrial Hemp Association (EIHA), the overall production costs for hemp fiber ranged from 800-1200 Euros per ton depending on factors like farm size, geographic location, use of machinery etc. This placed hemp fiber at a disadvantage compared to synthetic fibers and traditional natural fibers whose processing costs are relatively lower.
• Performance Limitations in Some Applications: Hemp fiber possesses advantages of sustainability, durability, and renewability. However, its properties may not meet performance requirements for certain technical applications. For instance, hemp fiber reinforcement provides moderate mechanical properties compared to glass fibers. This can limit the adoption of hemp composites in automotive and construction applications with demanding strength and structural requirements. Improvements in breeding and production methods can enhance hemp fiber properties to make it more competitive.
• Availability of Substitute Fibers: Hemp faces stiff competition from substitute natural fibers like flax, jute, and kenaf as well as synthetic fibers. Flax fibers match hemp fibers in strength and are softer. Jute is cheaper to produce and widely available. Synthetic fibers also offer higher durability and technical properties. This results in fluctuations in demand and affects market prices for hemp fibers. Developing newer applications where hemp offers unique advantages compared to other fibers will minimize threat from substitutes.
• Ambiguous Regulatory Landscape: Despite growing legalization of industrial hemp, ambiguous regulations concerning hemp cultivation, processing, and sales restrict market growth in many countries. Complex licensing norms, limitations on sales channels for hemp products and lack of clarity on imports/exports create roadblocks. Conflicting federal and state laws also cause confusion among farmers and manufacturers. A unified regulatory framework and policies supporting hemp production can significantly bolster market growth.

Counterbalance- Describe the legal structure that controls the production and processing of hemp in important markets, taking note of regional variations in the laws. Examine the potential effects of regulatory changes on the market, including growth-promoting or restriction-imposing effects.

Analyst’s Views

The global hemp fiber market has significant potential for growth over the coming years. As global awareness around sustainability increases, hemp fiber which is a very sustainable and eco-friendly material could see rising demand. Hemp fiber is affordable to produce and has several applications across industries like textiles, construction materials, automotive interiors and more. North America currently dominates the hemp fiber market but Europe is expected to be the fastest growing market. Some key drivers for the hemp fiber market include the material's versatility, growing environmental concerns and favorable government regulations promoting hemp cultivation. However, lack of modern large-scale hemp processing infrastructure could hamper market growth initially. Another challenge is public misconception around hemp's association with its cannabis variety. The market may also face constraints from traditional material producers trying to curb hemp fiber adoption. On the opportunities side, developmental research toward advanced hemp composite materials and partnerships across the value chain have potential to significantly boost the market. In summary, while lack of processing capabilities and public perceptions present near-term restraints, the hemp fiber market outlook is bullish owing to rising environmental awareness and product versatility across industries. Investments in research, innovation and partnerships will be crucial to realize the market's full potential over the long run. Europe is an important region to track closely given initiatives supporting hemp cultivation.

Recent Developments:

New product launches:

• In September 2022, Ananda Food announced the launch of Ananda Hemp Extract Oral Spray to expand its nutraceuticals product portfolio. The hemp extract spray is claimed to help in stress management and exercise recovery. Ananda Foods Ltd. is an Australian-owned company with a focus on hemp seed production. The company takes pride in its products and has over 20 years of experience working alongside Australian farmers to ensure the production of high-quality hemp products.
• In June 2021, Hempfusion Wellness launched CBD 5:1 tinctures in a raspberry lemon flavor to expand its existing product line of tinctures. The new tincture combines full spectrum CBD with CBG and CBN. HempFusion Wellness Inc. is a leading health and wellness supplement company that specializes in the manufacturing, marketing, and sale of hemp-based CBD and probiotic products.
• In May 2020, Canopy Growth Corporation launched First & Free, a hemp-derived CBD product line including oils, softgels and creams. The product range is THC-free and caters to health, wellness and self-care needs. Canopy Growth Corporation, formerly Tweed Marijuana Inc., is a cannabis company based in Smiths Falls, Ontario, Canada. In April 2019, Canopy was the world's largest cannabis company, based on the value of all shares, or market capitalization.

Acquisition and partnerships:

• In March 2022, HempFusion announced a partnership with earthday.org to sponsor the brand's regeneration campaign focused on environmental sustainability. HempFusion Wellness Inc. is a leading health and wellness supplement company that specializes in the manufacturing, marketing, and sale of hemp-based CBD and probiotic products. Earth Day Network Inc., also known as EARTHDAY.ORG, is a 501(c)3 nonprofit organization and the standard-bearer for Earth Day. It is the world's largest recruiter to the environmental movement, working with over 75,000 partners in more than 190 countries to drive positive action for the planet.
• In February 2021, Canopy Growth Corporation completed the acquisition of Supreme Cannabis Company to expand its product portfolio and distribution. Canopy Growth Corporation, formerly Tweed Marijuana Inc., is a cannabis company based in Smiths Falls, Ontario. In April 2019, Canopy was the world's largest cannabis company, based on the value of all shares, or market capitalization. The Supreme Cannabis Company, Inc. was a global diversified portfolio of distinct cannabis companies, products, and brands. Since 2014, the company had emerged as one of the world's most premium producers of recreational, wholesale, and medical cannabis products.
• In January 2020, Charlotte’s Web announced a distribution partnership with The Vitamin Shoppe for its hemp CBD topical creams, gummies and oil tinctures. Charlotte's Web Holdings, Inc. operates as a holding company. The company, through its subsidiaries, provides wellness products such as capsules, liquid, and topical items for phytocannabinoids , terpenes, and flavonoids diseases. Charlotte's Web Holdings serves customers worldwide. The Vitamin Shoppe is an American, New Jersey-based retailer of nutritional supplements. It also operated three stores in Canada under the name VitaPath from January 2013 until March 2016.

Figure 2. Global Hemp Fiber Market Share (%), by Application, 2023

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Top Companies in the Hemp Fiber Market:

• HempFlax
• Cavac Biomateriaux
• BaFa
• Hemp Planet
• Dunagro
• American Hemp
• Hempline
• Hemp Inc
• Ecofibre
• GenCanna
• Hemp Oil Canada
• Hemp Poland
• Plains Industrial Hemp Processing
• Colorado Hemp Works
• MH Medical Hemp
• Hempco
• Hempfield Farms
• Hemp Tech
• Tilray
• Canopy Growth

Definition: The hemp fiber market refers to the market for fibers derived from the industrial hemp plant. Hemp fibers are extracted from the stalk and bast of the hemp plant and have gained popularity as a sustainable, durable, and renewable natural fiber source. Key applications of hemp fibers include textiles, pulp & paper, composite materials, insulation, animal bedding, and construction materials. The global hemp fiber market has witnessed significant growth owing to the legalization of industrial hemp cultivation in many countries, rising ecological awareness, and increasing demand from industries such as textiles, automotive, and construction for environmentally friendly materials. Key factors driving market growth are the rising use of natural fibers over synthetic ones, favorable government policies, product innovation, and increasing legal cultivation of industrial hemp.