Industry research
Scope
US
Companies
54
Table of contents
What does the Chemical Distribution market landscape look like in the US?
The North American chemical distribution market is highly consolidated with the top 5 distributors: Univar Solutions, Brenntag (DE), Tricon Energy, Kolmar Group (CH) and Azelis (BE), capturing ~54% of the market in 2023. Notably, several larger global chemical distribution players, primarily based in Europe and Asia, dominate the North American space. Herein, some of these large players focus exclusively on either commodity chemicals (e.g. Tricon Energy) or specialty chemicals (e.g. Azelis). The specialty segment exhibits relatively lower levels of consolidation compared to the commodity segment because of its focus on niche markets and customized products, which require more tailored distribution networks. Large players continue to consolidate through acquisitions and innovate by leveraging AI and machine learning to track inventory, enhance logistics and reduce supply chain disruptions.
What is the level of investor activity in the US Chemical Distribution industry?
Investor-led interest has been limited, with ~17% of identified assets being backed by financial sponsors (as of February 2025). Deterring factors for investors include (i) stringent federal regulations that raise compliance costs and operational burdens, (ii) fluctuating raw material prices, (iii) supply chain complexities, (iv) increasing distributor diversification by chemical manufacturers driving down prices and (v) ongoing consolidation by large chemical distributors, pressuring bottom-line margins for smaller distributors. On the flip side, potential sponsor interest stems from (i) the increased outsourcing of logistics, inventory management and technical training to third-party distributors, (ii) rising tariffs on imports of chemicals, which reduce dependence on overseas sources (e.g. China) and (iii) growth in demand for chemicals driven by significant infrastructure development.
What are the key ESG considerations in the US Chemical Distribution industry?
ESG topics in the US chemical distribution market primarily revolve around environmental and social challenges. Environmental concerns include waste management, hazardous material handling and eco-friendly packaging. Herein, incumbents aim to address these issues by using energy-efficient equipment, recycling packaging, procuring renewable energy and using electric trucks. Social issues primarily relate to the safe handling and management of harmful chemicals throughout the supply chain. To address this issue, incumbents provide regulatory safety training and conduct customized on-site inspections.
Technavio (January 2025) estimates that the global third-party chemical distribution market generated ~$315.7bn in revenue in 2024 and expects it to reach ~$472.4bn by 2029 (+8.4% CAGR 2024-2029)
BCG (September 2023) valued the global specialty chemical distribution market at ~€218.0bn in size in 2022 and forecasts it to reach ~€251.0bn by 2027 (+2.8% CAGR 2022-2027)
Chemical manufacturers increasingly outsource logistics, inventory management and technical training to third-party distributors to enhance efficiency and reach new markets, driving demand for chemical distributors. To illustrate, ~75% of North American chemical manufacturers surveyed by BCG plan to increase their reliance on distributors between 2023-2026 (BRW Now, February 2024; BCG, September 2023)
Reshoring and nearshoring trends will drive increased demand for US chemical distribution as manufacturers seek localized supply chains. This will enable distributors to secure long-term contracts and benefit from growth in key hubs (e.g. Mexico). According to Kearney (Kearney, April 2023), there is a shift in industrial manufacturing away from China to Mexico, with ~96% of CEOs surveyed evaluating the potential to reshore their operations (ICIS, May 2024)
Significant infrastructure development, fueled by US federal investments such as the ~$1.2tn infrastructure bill, drives increased demand for chemicals such as adhesives, coatings and sealants. For chemical distributors, this surge in demand translates into expanded market opportunities and the potential for increased sales volumes (Alliance for Chemical Distribution, January 2025; Global X, November 2024)
The increasing diversification of distributor portfolios by chemical manufacturers is expected to lower prices, which could, in turn, impact margins for chemical distributors. To illustrate, ~61% of chemical manufacturers surveyed by BCG plan to diversify their distributor base between 2023-2026 (BCG, September 2023)
Fluctuating raw material prices and supply chain complexities disrupt cost management and inventory stability for US chemical distributors, thereby reducing operational efficiency and profitability (Adhesives & Sealants, September 2024; Elchemy, December 2022)
The ongoing consolidation of large chemical distributors and the rise of manufacturer-to-customer sales models will intensify competition, squeeze smaller players out of the market or erode their market share. As a result, distributors' bargaining power diminishes and bottom-line margins are under increasing pressure (Coatings World, September 2024; PWC, May 2023)
With the full report, you’ll gain access to:
Detailed assessments of the market outlook
Insights from c-suite industry executives
A clear overview of all active investors in the industry
An in-depth look into 54 private companies, incl. financials, ownership details and more.
A view on all 83 deals in the industry
ESG assessments with highlighted ESG outperformers
