The global industrial hemp market size is projected to grow from USD 4.6 billion in 2019 to USD 26.6 billion by 2025, recording a compound annual growth rate (CAGR) of 34.0% during the forecast period. Rising awareness among the consumers about the benefits of industrial hemp, increasing legalization to cultivate industrial hemp across different countries, and growing application scope of industrial hemp in diverse industries such as textile, pharmaceutical, food, beverages, personal care products, construction & material, furniture, and paper is driving the market for industrial hemp.
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Hemp fiber dominated the market for industrial hemp, by type, in terms of value, in 2018. Hemp fiber is majorly used in the textile and pulp & paper industry, due to its long and robust fibers as compared to cotton. Furthermore, being a renewable source material, its application has been increasing in many diverse industries such as construction, animal bedding, agriculture, furniture, and automobile. Additionally, its usage to obtain biofuels and bioplastics has been expected to increase its demand in the coming years.
CBD hemp oil is projected to be the fastest-growing type, owing to its role in preventing conditions such as anxiety, depression, pain, and acne. Furthermore, the growing application of CBD hemp oil in personal care products, health supplements, and food & beverages is expected to drive the market for this type.
The industrial hemp market, by application, was dominated by the food segment in 2018, owing to the wide application of hemp seeds and hemp seed oil, due to their rich vitamin, protein, and omega-3 fatty acid content. Hemp seeds are consumed raw or are being used as a topping in cereals, smoothies, and yogurt. Rising consumer awareness about the benefits of consuming hemp-based products is driving the market for its application in food.
The market for industrial hemp from a conventional source dominated in 2018. Industrial hemp is mainly cultivated for fibre for the textile and paper industry. Furthermore, low prices of conventionally obtained hemp as compared to organic source and their growing application of in construction & material, automotive, and furniture industries are expected to drive its market in the coming years.
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The Asia Pacific market accounted for the largest share in 2018. This dominance is attributed to the extensive production and consumption of hemp fibre in the textile and paper industry. Furthermore, the booming market for cosmetics and personal care products in the Asia Pacific region and legalization of industrial hemp in food supplements is estimated to drive market growth. The European region is projected to grow at the highest CAGR, owing to an increase in consumption of hemp seeds as food as well as their full application in other food products such as smoothies, yogurt, cereals, and bars, especially in countries such as Germany and the Netherlands. Moreover, the rise in awareness among consumers about the nutritional benefits of consuming hemp is further expected to fuel the demand for hemp-based food and personal care products. Furthermore, increasing legalization of industrial hemp in the European region in the coming years is expected to drive the industrial hemp market.