Vishal Sapru, Research Manager, Energy & Power Systems, Frost & Sullivan
Alkaline batteries are disposable batteries with zinc and manganese dioxide as electrodes. The alkaline electrolyte used is either potassium or sodium hydroxide. These batteries have a steady voltage offering better energy density and leakage resistance than carbon zinc batteries. This is mainly due to the manganese dioxide anode material, which is purer and denser, thereby reducing the space taken up by internal components. Most of the market participants have shifted their focus on rechargeable chemistries such as nickel metal hydride and lithium-ion. This has resulted in consolidation of the market.
The North American and European regions are the major contributors to the revenues of the alkaline battery market. However, the Asia Pacific and Latin American regions hold strong potential for growth in this market. The main reason behind this is the fact that these regions are in the transitional phase in shifting from carbon zinc batteries. Moreover, the Middle East and Africa hold substantial share in the alkaline battery market and are witnessing an increasing trend in the usage of these batteries.
The alkaline batteries come in various sizes ranging from AAA to AA, C, D, 9 V and others. AAA and AA are suited for low-drain applications whereas AA is used for high-drain applications. C, D and 9 V are suited for high-drain applications as well. Others include micro alkaline button cells, coin cells, AAAA and the like. AA is the most widely used alkaline battery cell size, while the AAA size is the fastest growing. Size C, D and 9 V are used for specific applications which have steady demand. However, other sizes such as micro alkaline coin cells and button cells are used in few industrial and medical applications.
Some of the key challenges faced by the alkaline battery manufacturers include:
Competition from Alternative Chemistries: Alkaline batteries face threat from primary lithium batteries and rechargeable batteries in consumer electronics application. Primary lithium batteries possess higher energy density, thereby offering better performance and lasts longer compared with the alkaline batteries. In many high-drain consumer applications, nickel metal hydride (NiMH) rechargeable batteries are replacing alkaline batteries as they offer better performance and lasts much longer than the disposable alkaline batteries. The impact of this challenge is likely to be medium in the short- to mid-term but is expected to be high in the long term as we will see alkaline batteries being replaced by alternative chemistries.
Increasing Cost of Raw Materials: Disposable batteries witnessed a pressure on manufacturing cost owing to the increase in the price of raw materials, such as zinc and electrolytic manganese dioxide (EMD). The cost of key material EMD is high. EMD plays a key role in the performance of alkaline batteries and is required at high-purity stage which augments high price. This trend pressures the alkaline battery manufacturers as their profit margin is affected owing to this rise in the cost of the raw material. This poses a major challenge to the alkaline battery manufacturers, as the rise in the price of batteries is expected to make consumers prefer alternative batteries. Impact of this challenge is likely to be medium during the short and mid-term and low during the long term.
Presence of Counterfeit Batteries: Alkaline batteries which appear identical or confusingly similar to a branded battery are referred as counterfeit batteries. These batteries are designed to mislead consumers intentionally by appearing very similar to branded batteries. However, the performance, efficiency and leak proof features offered by branded batteries could not be expected in these counterfeits. Branded batteries are constructed with a vent to release the internal pressure within the battery that prevents the battery from explosion or electrolyte leakage. Hence counterfeit batteries impose safety issues along with harming the brand reputation of key battery manufacturers. The impact of this challenge is medium during the short- to mid-term and low during the long term.
Key Drivers Impacting the Growth of The Market
One of the key strengths of the alkaline battery chemistry is its ability to power day-to-day gadgets such as alarm clocks, electric shavers, remote controls and radios among others. Alkaline batteries have become one of the essential commodities of life, resulting in a growing demand/need for these batteries. The demand for alkaline batteries is steady at present, but this is likely to change with increasing usage of these batteries in transitional (from carbon zinc) regions of the world.
Alkaline batteries are primary disposable batteries, which need to be replaced after it is completely discharged. On average, an alkaline battery is expected to power a device for a period of two to four months (except in a few low-drain applications), after which it needs to be replaced by a new battery. This creates demand for these batteries. Wide-spread availability, coupled with a wide choice offered by the manufacturers according to the applications (different series of alkaline batteries are launched in medium-drain, high-drain and low-drain applications), create demand for the alkaline batteries.
Alkaline batteries are available in various sizes according to the applications (such as AAA, AA, C, D, 9 V and others). All of these configurations are likely to be used on gadgets immediately after purchase, which make them suitable for use even during emergency situations. Additionally, long shelf life offered by these batteries (ranging from three to four years) makes them suitable for storage. This feature of the alkaline battery chemistry is expected to offer a competitive advantage compared to the rechargeable batteries of other chemistries.
Alkaline batteries are environment-friendly, which are anticipated to be disposed as trash and do not require active collection and recycling. Moreover, those made currently by almost all the major manufactures are mercury-free and hence, do not pose any environmental pollution or hazard on disposal. This creates a positive demand for these batteries, since other rechargeable consumer batteries needs to be properly collected and recycled. Additionally, the environment-friendly feature makes a consumer feel good while using these batteries as they do not pollute the environment. Moreover, they will likely favor the easy disposal, which is expected to influence them to use alkaline batteries.
The world alkaline battery market generated $6.5 billion to $7 billion during 2010. It is expected to grow at a compound annual growth rate of 3 percent to 4 percent.
Wide-spread usage of alkaline batteries in the developed regions, such as the United States and western European countries, contributes to the steady demand for these batteries. Moreover, developing countries such as China, Russia, Poland, Brazil, Argentina and Kenya, among others, offer strong growth potential for this market. Although the threat from primary lithium battery chemistry and rechargeable chemistries exist, alkaline batteries offer satisfactory performance at an affordable cost in all developed countries. Hence, these batteries generate nearly 65 percent of the revenues of the primary battery chemistry market.
Usage of alkaline batteries for low-drain applications offers commendable performance with very low replacement rate. Low-drain applications include flashlights, portable radios, alarm clocks, remote controls, toys and the like. Low-drain applications dominate the alkaline battery market. Owing to the low battery replacement rate for low-drain applications, this segment witnesses a low compound annual growth rate compared with the high-drain and other applications. Other uses include medical, industrial, defense and military, among others. Medical applications use alkaline batteries as power source in specific types of infusion pumps, pulse oximeters, blood pressure monitors, electronic thermometers and the like. Industrial applications of alkaline batteries involve usage in smoke alarms, portable transmitters, scanners, digital voltmeters, door locks, remote controls and laser pointers. Military and Defense application include usage of alkaline batteries in SINCGARS, man pack radios and also in GPS systems.
Technology Assessment Alkaline Versus Primary Lithium
Alkaline battery chemistry is the most dominant primary battery chemistry, contributing 65 percent of the primary battery market. Alkaline batteries are composed of basic (alkaline) electrolytes of potassium hydroxide. Higher purity and activity in manganese dioxide offer better performance compared with the carbon zinc batteries. These cells are available at an output voltage of 1.5 volts, but at a higher energy density of 6.5 watt hours per cubic inch. The features that make these alkaline batteries most suitable include better energy density compared with carbon zinc batteries, low discharge with shelf life of nearly 10 years, efficiency in low-drain, medium-drain, and high-drain applications, and better performance at wide temperature ranges and hence, are likely to be used even in cold conditions.
Primary lithium batteries have lithium metal or lithium compounds as anode, while the cathode is likely to composed of any other material depending on the usage and output demand (such as thonyl chloride, iodide, manganese dioxide and the like). These batteries compete with alkaline batteries as these are anticipated to offer output voltages ranging from 1.5 volts to 3.7 volts. Moreover, as lithium is a light-weight material, it is likely to offer batteries of lesser weight. Advantages of these batteries include lighter weight than alkaline batteries (thus, used more in industrial and medical applications), higher energy density offering better performance compared with alkaline batteries and availability in a wide-range of varieties that are likely to be most suited for specific applications.
Secondary Alkaline Batteries
Rechargeable alkaline battery is a niche market, which is almost replaced by other rechargeable battery chemistries. Although these batteries are likely to maintain charge for years, they are still at a nascent stage. These batteries are available at the most widely used sizes of AAA, AA, C and D. The usage of these batteries is limited to specific applications. However, one of the major advantages of rechargeable alkaline batteries is that it is likely to find usage in all applications that need primary alkaline batteries. These batteries are manufactured through a small variation in chemical composition of alkaline batteries. This makes these batteries leak-proof even during the recharging process. Some of the key features of rechargeable alkaline batteries include:
• These batteries are likely to be rechargeable for nearly 500 charges. However, it needs be recharged at proper intervals.
• Compared with the cost involved per charge, alkaline batteries offer low-cost rechargeable batteries, in comparison to the other chemistries.
• Rechargeable alkaline batteries also offer a voltage output of 1.5 volts, while other rechargeable chemistries offer an output voltage of 1.2 volts.
• These batteries are environment-friendly and therefore are likely to be disposed of easily after complete discharge. However, proper recycling operation is needed for other rechargeable chemistries.
• These batteries are ready-to-use and are expected to power the device immediately after purchase.
Alkaline batteries remain the most frequently consumed battery chemistry due to wide availability, the range of suitable applications, and reliability in many different environments and climates. This trend is expected to remain steady in the short- and medium-terms due to limited options for equal performance battery chemistries at a similar price point. In the long term, as lithium batteries become more affordable and more widely available, a noticeable shift will occur from alkaline to lithium batteries. The level of alkaline battery production will remain quite consistent as it will likely acquire market share that the heavy-duty segment will be relinquishing. Alkaline batteries will become the new affordable standard as heavy-duty batteries become less capable of powering the needs of an increasing number of consumer gadgets.
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