6 Trends Affecting Chemical Industry in 2024 and 2025 - Ep 180

Join Victoria Meyer, president of Progressio Global and host of the chemical show. As she speaks with executives across the industry and learns how they are leading their companies to grow, transform, and push industry boundaries on all frontiers. Here's your host, Victoria Meyer.

And it's really around the economics of supply demand and the economics of the chemical industry. And the reality is that is only one part of the picture. Today I'm talking about more of those trends and topics that are affecting the chemical industry. In fact, I've got six of them that I'm talking about today.

And by the way, we're going to be touching on some of these things and discussing opportunities and solutions at The Chemical Summit, which is coming up on October 8th and 9th in the Houston area.

If you have not already registered, you're going to want to do so because we're going to be discussing this on stage and in the audience, and you'll have a chance to learn from your peers, other business leaders and strategists and marketers across the industry about how they are taking some of these trends. And applying them to their business.

So, um, something you don't want to miss, but back to today's episode, what I'm talking about today is the six trends that are driving the chemical industry in 2024 and in 2025. So first out of the gate. Supply chain dynamics. I've said this before. I'm going to say it again. This is the decade of supply chain. And I think what's really important about this is supply chain used to be highly repeatable. You figured out what that supply chain was.

You figured out what your logistics arrangements were, whether it was domestically U S Europe elsewhere, whether it was internationally cutting across the water. That's not true anymore. There are so many factors that are, are shifting our global supply chains and local supply chains. Could be tariffs, could be port strikes and rail strikes and we're certainly seeing effects of both of those in 2024. Shifting global shipping environment and just the maritime environment due to geopolitics.

Shifting marine requirements due to regulations. So supply chain has always been, you know, okay. It's not always been a dynamic field, but I'm going to tell you that supply chain today more than ever is a dynamic part of the chemical industry, right? Decision making, resiliency, all of those things are critical. That is one of the key trends that's driving the chemical industry today.

And actually one of the topics that we've got a panel on, uh, around Navigating Uncertainties: Strategies for Building Resilience in your Supply Chain. It's going to be a good one. Um, the second key trend that's influencing the industry today is Shifting Customer Engagement Mechanisms. This is particularly true in a post COVID world and a TikTok driven world, right? So let's just think about this. The way that we engage customers has changed dramatically. And the reality is.

It is continuing to change. I think many companies, many business leaders, many sales professionals are still trying to figure out what is the best way to communicate, engage, align with customers. The old folks, I'll group myself in that category, we're looking for something different.

And certainly the next generation, when we think about who are our up and coming leaders and individual contributors, and the people that are working on both sides of the table in an organization, they are highly influenced by digital. In fact, they are digital natives, right? So if you think about millennials, They've really only known a digital world. Um, and so these digital natives are using Instagram, TikTok, and YouTube on a daily basis.

Um, I'm going to be honest, I am not a digital native and I'm using these things on a daily basis as well. Maybe not TikTok. I'm not really a TikTok girl, but Instagram, YouTube, absolutely. I am using social media, you are probably using social media to engage with business partners, friends, figure out what you want to buy, get some ideas about the news, right? So everything has transformed. Has your customer transformed? Has your customer experience transformed?

Do you even know how your customer wants to engage? How you want to engage with your customers? Where that value is in this new digital post COVID, TikTok-ified world, if I can use that word, right? Is that a word/ I'm making it up. Um, and in fact, we've got a couple of great speakers on that as well. So Melina Palmer, who you've heard on The Chemical Show before, she's talking about What your Customers Want and Can't Tell You.

And then one of the great topics that we've gotten, I think it's so critical is around Savvy Segmentation, right? Here's the reality. One size does not fit all your customers have different needs. And what's the best way to have a highly satisfied customer, a great customer relationship, great customer value is to figure out what those customers want and serve them in the right way. And that is not serving everyone the same way all the time.

It is figuring out what your customers want and aren't telling you and then how you're going to serve them. So. Another great topic. Another great trend, really relevant, um, in the industry today. And I'm excited to learn from the speakers on the stage. And I'm excited to hear from people in the room that are going to be talking about how this is playing out in their business, how they're adapting, what they're thinking about for the future. It's a good one.

The third trend is Shifting Global Economics and Geopolitics, right? So if we just take a step and look at what's going on, uh, in the U S everybody knows we have a presidential election coming up that is going to influence the industry one way or another. Maybe not as directly as some people think, but it's certainly seems to have put a bit of a pause in what's happening across the world. Um, so And it's going to have an influence going forward. Right?

So we've got Europe that we've certainly seen is heavily influenced by green policies, the Russia Ukraine war, numerous elections, right? In fact, if you look across the world, major election in almost every Region country around the world. 2024 is a big year. 2025 is the year it all gets implemented. The new administrations, new policies, et cetera. Maybe not the new policies, right? That takes a little bit longer, but still it is there and it's happening. Um, the China economy.

So again, if we get back to, to global economics and geopolitics, and we talked a lot about that last week with John Richardson. So again, if you have not listened to that episode, go find it. Um, John Richardson and I talked on episode 179 about just the shifting, uh, economics and economies for the chemical industry. You're going to want to listen to that. But we know this what's going on in China affects the rest of the world.

The Chinese economy is not as resilient demand growth has stagnated. Although. They continue to build. Um, and we are facing a period of oversupply. So there's different strategic reasons for that. Um, it's certainly, uh, a topic of conversation and figuring out maybe some ideas, some scenarios about what's going on in this world. Global economics and geopolitics is critical as well as what are the things that the chemical industry, you as a chemical business leader should think about.

We've got Jason Schenker who is an economist and a futurist who is going to knock your socks off. Um, I just had a conversation with him today. He knocked my socks off. It was great. The fourth theme and trend that I'm seeing in the industry and that we're all seeing is Digitization and AI, right? It's evolved though, like this is, we've been talking about digitization and AI. Are you guys tired talking about that yet? I don't know. We're living in a digital world.

So what I think is really interesting is how we're evolving to data-driven decision making, um, topic of conversation at last year's Chemical Summit. This year, we're talking about how it's accelerated over the past year. Right. How are companies really tackling this. AI a year ago. I think back to 2023 and we were fearful of AI. Today, we're still worried about it, but you're using it.

And if you think you are not using it, go do a Google search because the first answers that Google gives you a lot of times is their AI based, um, assessment of what the answer is, right? So it's no longer just a straightforward search mechanism. They're providing an AI solution. If you use your Microsoft products, right. Microsoft CoPilot is very popular, um, across the board and they're really rolling that out. There's a lot of AI that's taking place in our R&D and innovation.

There's AI taking place in our businesses. I think one of the ways that we're figuring this out, and if I combined the digitization and data and AI together, it's really around an acceleration of analysis and answers, um, which if used right, can only be good for us. And that's one of the topics we'll be talking about as well. So digitization and AI. The fifth trend, Talent and Culture. Labor is challenging. It's eased a little bit, but we've got ongoing labor challenges.

When I talk to business leaders, they're like, we're worried about talent. How do we hire talent? How do we develop talent? How do we ensure that we have the business and the talent and that what goes hand in hand with that is the culture that we want in our organization. We're still facing this post COVID world. Everybody figured out that they could work from home. Um, a lot of businesses are back in the office. A lot are still hybrid. Some are fully remote.

The digital tools that we've got enable that it makes it a little bit more challenging. Um, It can make it more challenging to build connections. It can make it more challenging to build culture. So this area of talent and culture in an evolving world is going to be critical and it's a trend that's driving business leaders when they think about what is the business of the future and how do they achieve success through and with their talent, their people and their culture.

So that's trend number five. Trend number six. Innovation and Regulation, it's a trend that goes hand in hand because let's be honest, we are seeking tons of innovation, whether it be green and bio based chemistry, whether it be around recycling, whether it's around energy, whether it's around business processes. We are also hampered at the same time by regulation so that regulation is driving innovation. But if it's not.

Um, on the back end quick enough to approve new products and processes and help create those innovations that the industry needs and that businesses and government and people are asking for, um, That goes hand in hand. I think about, some of the trends that we're seeing and, and the PFAS is a great example of a regulation that's hit globally, but I think there's also some regulations that are getting applied differently across the globe. And these apply to marine transportation, right?

Um, that's something that's going to come up. These apply to products and innovation. And so. You know, one of the things that plays into this whole aspect of innovation and regulation is, is one, have the right culture, being ready to roll. Um, and then three is really this impact of strategic relationships and strategic relationships are so critical across the industry with the new innovative technologies that are coming to bear. If you look at.

Anyone that's getting being successful in commercializing green chemistry, bio based chemistry, advanced recycling. These are happening through partnerships, consortiums and more. Um, so we are going to be talking about the Impact of Strategic Relationships on Business Growth. And it's on business growth. It's on innovation and it's on really partnering to figure out how to make those regulations work for you.

So, you know, those are my six topics, six trends that are affecting the chemical industry in 2024 and 2025. Right. I'm going to repeat those for you. Um, Supply Chain Dynamics, right? So moving from a repeat of highly repeatable to much more dynamic supply chains. That's one. The second one is Shifting Customer Engagement Mechanisms, right? Our customers want to be treated differently. They want to be engaged differently and we're figuring that out from a business perspective.

The third one is Shifting Global Economics and Geopolitics. We are not in a period of instability. I would not say that, but we're certainly in a period of, um, Change right change and stress on our global economics and geopolitical systems. And so business leaders across the globe are working on figuring these things out. And frankly, responding to them, developing scenarios, figuring out how that take that forward.

Um, and that's 1 of our key trends that we're seeing in 2024 and moving into 2025 for the chemical industry. Digitization and AI. And frankly, it's the embracing of digitization and AI. I think, um, up until, you know, let's just say through 2023, there was a little bit of resistance. I see 2024 into 2025, the trend in this is embracing it, figuring out how to make it work for you, um, and taking it forward. Talent and culture, um, and readying our workplace for the future.

Because if I, if you look back on the things that we've already talked about, all of those things influence the talent and culture that our companies need to be successful. Um, and then trend number six, which is Innovation Influenced by Regulation. Um, and it's influenced and hampered by and supported by regulation. Um, but we are certainly in a period of deep innovation to help drive sustainability to help meet the chemical industry needs of the future.

Um, and it's the industry needs because it's the way the industry ties into the rest of the world. Right? So, uh, you know, the, the ACC talks about the chemical industry and chemicals touching 98 percent of the products. Globally, you're 96 percent like you guys know this, you and I know this and the rest of the world is really coming to know. This is that the chemical industry is driving the future of the world.

And so we need to have that innovation and supportive regulations and that is an ongoing trend and focus area that I think we're going to be seeing. So that's it. I would love to hear if you have any additional trends that you are watching, that you think we should be watching and that I should be watching and talking about. Um, would love to hear from that.

And, uh, you know, if you want to gain some more insights, share some wisdom, find out how your peers are engaging and talking about these trends and topics and applying them to their business, join us at The Chemical Summit. We'd love to see you there. Thanks for listening today. Keep listening, keep following, keep sharing, and we will talk with you again very soon.