Fats and Oils Market Outlook from 2024 to 2034

The global fats and oils market size is expected to reach USD 525 billion by 2034. In the meantime, the industry is projected to register a 5% CAGR from 2024 to 2034. In 2024, the market’s estimated valuation is USD 321 billion.

Fats and oils, a fundamental part of our diet and countless industrial applications, encompass a vast and growing industry. This industry is driven by a steady increase of nearly 5% annually. These essential products come in two main forms: liquid and solid.

Liquids, like soybean and olive oil, dominate due to their versatility in cooking, baking, and salad dressings. But don't underestimate the role of solids like butter and margarine in baking and food production.

The fat and oil source can be plant-based, like palm, rapeseed (canola), or sunflower, or animal-based, like butter, tallow, or lard. Interestingly, vegetable oils are taking the lead, particularly due to a growing preference for plant-based diets and health consciousness among consumers.

Global Fats and Oils Industry Assessment

Attributes Description
Estimated Size, 2024 USD 321 billion
Projected Size, 2034 USD 525 billion
Value-based CAGR (2024 to 2034) 5%

The global oils and fats industry is a complex network. While there are many players, a few companies hold a significant share, with Wilmar International, Cargill, and Bunge Limited leading the pack. These giants are constantly looking to expand production and reach new markets.

Looking geographically, the fats and oils market thrives in both developed and developing nations, with the United States, Brazil, China, India, and Indonesia being key players. Palm oil, for instance, reigns supreme, accounting for a prominent industry share.

Animal fats play a crucial role in pet food, animal feed, and even industrial applications like biodiesel production. The future of the fats and oils market is brimming with potential.

As the focus on health and plant-based alternatives rises, we can expect continued growth in vegetable oil sectors alongside innovations in production methods and product quality. This vital industry is expected to undoubtedly continue to fuel our plates and various industries for years to come.

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Key Industry Highlights

A Healthy Rise of Plant-based Oils in Cooking and Baking

The market penetration of plant-based oils in cooking and baking is surging. Health-conscious consumers are driving the trend, seeking out these oils for their perceived health benefits and versatility. Plant-based options offer a wide range of cooking applications, from high-heat frying to delicate salad dressings.

They can even achieve similar functional results to traditional fats in baking. Additionally, these oils cater to dietary restrictions and growing environmental concerns. However, some challenges remain, such as replicating the taste and texture of animal fats and fluctuating prices.

Overall, with a focus on health and functionality, plant-based oils are poised to continue their strong growth in kitchens around the world. Thus, setting the trends in the fats and oils market.

Organic and Non-GMO Oils Score Big in Cooking and Baking

Organic and non-GMO oils present a double opportunity in the cooking and baking market. They cater to health-conscious consumers seeking minimally processed, potentially healthier options, and align with the growing demand for transparency in food production. These labels can position products in the premium industry and allow brands to target specific health-conscious demographics.

Overcoming cost hurdles and ensuring wider availability, however, remain challenges. Overall, the focus on health and transparency positions organic and non-GMO oils for strong growth in the kitchen.

Fats and Oils are Power Players in Nutraceuticals and Functional Foods

Fats and oils are key players in the nutraceutical and functional food arena. They act as delivery systems for fat-soluble vitamins, provide essential fatty acids our bodies can't produce, and even promote feelings of fullness. These benefits contribute to heart health, brain function, and weight management.

Fats and oils further enhance the flavor and texture of functional foods, making them more enjoyable to consume. From fish oil capsules to fortified plant milk, nutraceuticals and functional foods use fats and oils to deliver targeted health advantages. As research continues, expect even more innovative products utilizing these essential dietary components. Thus, pushing the fats and oils sales.

Country-wise Insights

Growing Health-consciousness Fueling Sales in the United States

Demand for fats and oils in the United States is rising due to a confluence of factors. Consumers are increasingly seeking healthier options, and some plant-based oils are perceived as having a better health profile than animal fats. These oils may contain beneficial fats like monounsaturated and polyunsaturated fats, which can contribute to heart health.

The American lifestyle often leans towards convenience, and processed foods frequently use fats and oils as ingredients. This rising demand for processed foods naturally translates to a higher demand for the fats and oils used in their production.

Green Shift and Quality Drive Fats and Oils Market Growth in the United Kingdom

The fats and oils in the United Kingdom are forecast to be on an upward trend, driven by a mix of factors, but with some unique twists. Environmental concerns are a growing influence in the United Kingdom.

Several consumers are shifting towards plant-based oils perceived as more sustainable options compared to palm oil, which has environmental concerns surrounding its production. Despite inflationary pressures, a segment of United Kingdom consumers prioritizes high-quality oils. Organic and non-GMO options are also gaining traction.

India's Fats and Oils Market Booms with Rising Incomes and Health Trends

In India, the demand for fats and oils is on the rise for several compelling reasons. India's population is booming, and as disposable incomes increase, people tend to consume more processed foods and cooking oils. This naturally leads to a higher demand for fats and oils used in food production and preparation.

Traditionally, Indian cuisine relied heavily on ghee (clarified butter) for cooking. However, there's a growing trend towards healthier options, with a rise in the consumption of vegetable oils perceived to have a better health profile.

Consumption patterns vary across India. In the south, sunflower oil reigns supreme, while mustard oil is popular in the north and east. This regional diversity creates a complex, yet ever-growing industry for various types of fats and oils.

Nandini Roy Choudhury
Nandini Roy Choudhury

Principal Consultant

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Category-wise Insights

Fats and Oils Conquer the Food and Beverage Industry

For food and beverage companies, oils and fats are like a chef's secret weapon. They go beyond simply adding flavor. These essential ingredients create a delightful experience by enhancing the richness, mouthfeel, and overall appeal of food and drinks. But their role extends beyond taste.

Oils and fats act as workhorses in the kitchen, efficiently transferring heat during cooking, leavening baked goods for a light and fluffy texture, and preventing them from drying out. They can even carry other flavors, spices, and essential vitamins. The wide variety of options, from plant-based oils to animal fats, allows manufacturers to cater to diverse needs and budgets.

Fats and oils can even extend shelf life and improve the visual appeal of food. With their functionality, flavor impact, and versatility, it's no wonder these ingredients are irreplaceable in the food and beverage industry.

Soybean Oil Prominence Attributable to its Versatility in the Kitchen

Soybean oil's reign supreme isn't accidental. It's a culinary chameleon, adapting to various cooking methods with its neutral flavor and high smoke point. Budget-friendly compared to some fancy oils, it makes economic sense for home cooks and food manufacturers alike. Perceived heart benefits due to polyunsaturated fats add to its appeal. Wide availability and sustainable production thanks to global soybean cultivation solidify its dominance.

A higher omega-6 content in soybean oil raises concerns. The future likely involves soybean varieties with a more balanced omega-6 to omega-3 ratio, alongside a focus on sustainable agricultural practices. By addressing these concerns, soybean oil can secure its long-term position as a fat and oil favorite.

Competition Outlook

The competitive fats and oils market is adapting to evolving consumer preferences. Players are innovating with vegan, organic, and functional oil blends to meet dietary trends. Sustainability is a growing focus, with companies emphasizing eco-friendly practices and packaging.

Targeted marketing highlights specific health benefits or flavor profiles, while transparency about sourcing builds trust. Strong brand identity and strategic expansion through mergers, supermarket partnerships, and direct-to-consumer channels are all crucial for success.

Industry Updates

  • In October 2023, KTC Edibles, the edible oils supplier based in the United Kingdom, introduced a new palm oil brand known as Planet Palm. The brand is expected to sell products for the food manufacturing and bakery sector in the United Kingdom.
  • In March 2024, AAK, the vegetable oils and fats producing Sweden-based company, launched AkoVeg 163-14. This launch is an amalgamation of insoluble fiber flake and coconut oil. This product allows formulators to produce plant-based meat, containing reduced fat and zero cholesterol. The oil solution may offer benefits like stability, heat tolerance, enhanced firmness, and sliceability, among many others.

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Key Fat and Oil Brands

  • Cargill, Incorporated
  • Associated British Food Plc.
  • Unilever Plc.
  • Archer Daniels Midland Company
  • Wilmar International Limited
  • United Plantations Berhad
  • Ajinomoto Co. Inc.
  • International Foodstuff Company Holdings Ltd.
  • Bunge Limited.

Key Segments of Fats and Oils Market

By Type:

The industry is categorized on the basis of type into fats and oils. Fats are sub-divided into butter, tallow, lard, and specialty fats. Oils are sub-divided into soybean oil, palm oil, rapeseed oil, coconut oil, olive oil, sunflower seed oil, and other oils.

By Applications:

Different applications of fats and oils include food and beverages, animal feed, pharmaceuticals, personal care and cosmetics, and others. Food and beverages are divided into confectionary, dairy products, bakery, and other applications.

By Region:

The industry report inspects regions like North America, Latin America, Europe, East Asia, South Asia, the Middle East and Africa (MEA), and Oceania, to determine oils and fats consumption patterns.

Frequently Asked Questions

What is the Forecast Value for Fats and Oils Market?

The global fats and oils market is forecast to reach USD 525 billion by 2034.

Where Does the Present Market Valuation Stand?

The present industry valuation is USD 321 billion in 2024.

What is the Growth Scope for the Global Fats and Oils Industry?

The fats and oils industry is estimated to pace at a 5% CAGR through 2034.

What is the Leading Application Segment for the Fats and Oils Market?

Food and beverages are the leading application segments for fats and oils.

Which Industry Players are Performing Well?

Cargill, Incorporated and Unilever Plc. are the top-performing players.

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