Fats and Oils Market Report by Type (Oil Type, Fat Type), Application (Food Applications, Industrial Applications), Source (Vegetable, Animal), Sales Channel (Direct Sales, Supermarkets and Hypermarkets, Retail Stores, Online Stores, and Others), and Regi

Fats and Oils Market Report by Type (Oil Type, Fat Type), Application (Food Applications, Industrial Applications), Source (Vegetable, Animal), Sales Channel (Direct Sales, Supermarkets and Hypermarkets, Retail Stores, Online Stores, and Others), and Region 2024-2032

The global fats and oils market size reached US$ 232.6 Billion in 2023. Looking forward, IMARC Group expects the market to reach US$ 321.8 Billion by 2032, exhibiting a growth rate (CAGR) of 3.6% during 2024-2032. The increasing consumer preference for healthy, organic options in their diet, the rising awareness regarding the health benefits associated with certain oils, the emerging trend of label transparency, and numerous innovations in product formulation represent some of the factors that are propelling the market.

Fats and oils are organic compounds derived from plant and animal sources, principally used for culinary, industrial, and cosmetic applications. Characterized by their fatty acid content, they serve as a critical source of energy and are essential for numerous physiological functions. These compounds can either be saturated or unsaturated, with each type having unique melting points, stability, and nutritional profiles. Fats and oils possess a distinct working mechanism when it comes to cooking; they act as a medium for heat transfer, thus enhancing the texture and flavor of foods. Additionally, they display various beneficial properties such as emulsification and preservation, making them indispensable in both household and industrial settings.

The global market for fats and oils is primarily driven by an increasing consumer preference for healthy, organic options in their diet. This can be attributed to the rising awareness regarding the health benefits associated with certain oils, such as olive and avocado, which contain monounsaturated fats. Moreover, a growing demand for processed and convenience foods that incorporate fats and oils is also serving as a significant factor in market growth. In line with this, continual technological advancements in extraction and processing methods are further stimulating the industry. Additionally, the market is experiencing additional demand due to an escalating interest in plant-based diets, which favor oils over animal-derived fats. Apart from this, international trade agreements that facilitate the global supply chain of oils are giving an impetus to the market. Some of the other factors contributing to the market include shifting dietary patterns, enhanced focus on R&D for developing specialized fats and oils for dietary supplements, and increased demand for biofuels derived from vegetable oils.

Fats and Oils Market Trends/Drivers:

The emerging trend of label transparency

Consumers are increasingly scrutinizing the nutritional labels of food products before making a purchase. This trend is most evident in the fats and oils sector, where health implications such as cholesterol levels and cardiovascular well-being are closely related to the types of fats consumed. As a result, there's a burgeoning demand for complete transparency in labeling, which clearly identifies not just the type of fats used but also their sourcing and processing methods. Manufacturers are responding by becoming more transparent, reformulating products to include healthier types of fats like omega-3 fatty acids, and clearly indicating this on labels. Regulatory agencies are also stepping in by creating stricter labeling requirements that ensure manufacturers provide comprehensive and accurate information to consumers. These shifts are acting as key market drivers, as they cater to an informed consumer base that prioritizes nutritional awareness when making food choices.

Growing consumer demand for ethical sourcing

An increasing number of consumers now prioritize ethically sourced and environmentally responsible products. This trend is not only affecting purchasing decisions but also compelling manufacturers to reassess their sourcing and production methods. Companies are making significant changes to adapt to this rising demand. Many are opting for certified sustainable palm oil, investing in environmentally friendly production practices, and even partnering with local farmers to ensure fair trade. Ethical sourcing isn't only about the source material; it also encompasses the overall environmental footprint and social implications of production. Therefore, the growing emphasis on sustainability and ethical practices is becoming a key differentiator in a competitive market. Companies that align with these consumer preferences are better positioned to build brand loyalty and are likely to experience sustained market growth.

Numerous innovations in product formulation

Specialized fats and oils that are designed for targeted nutritional or functional benefits are gradually gaining more prominence among the masses. This level of innovation serves a diverse consumer base with specific health requirements or lifestyle choices, such as veganism, ketogenic diets, or medical conditions requiring low-fat intake. As a result, several foodservice providers and manufacturers of packaged goods are increasingly using specialized fats and oils to enhance flavor, extend shelf life, or improve texture. Similarly, the cosmetic and skincare industries are utilizing oils rich in specific nutrients for targeted benefits, like moisturization or anti-aging properties. As technologies advance, the ability to produce fats and oils with customized properties will continue to evolve, thereby offering further opportunities for diversification and market expansion.

Fats and Oils Industry Segmentation:

IMARC Group provides an analysis of the key trends in each segment of the global fats and oils market report, along with forecasts at the global, regional, and country levels for 2024-2032. Our report has categorized the market based on type, application, source and sales channel.

Breakup by Type:

• Oil Type
• Palm Oil
• Soybean Oil
• Rapeseed Oil
• Sunflower Oil
• Olive Oil
• Others
• Fat Type
• Butter
• Shortenings and Margarine
• Lard
• Tallow
• Others

Oil type represents the largest market segment

The report has provided a detailed breakup and analysis of the market based on the type. This includes oil type (palm, soybean, rapeseed, sunflower, olive, and others); and fat type (butter, shortenings and margarine, lard, tallow, and others). According to the report, oil type represented the largest segment.

In terms of oil type, conventional oils such as palm and soybean oils continue to lead the market. They are preferred due to their lower costs, availability, and multifunctional roles in both food and industrial applications. Advances in refining techniques have made it possible to produce oils with specific characteristics, catering to unique consumer and industrial demands. As health consciousness rises, there's an increasing trend towards oils with lower saturated fat content and higher nutritional value, such as canola and olive oils.

Breakup by Application:

• Food Applications
• ndustrial Applications

Food applications account for the majority of the market share

The report has provided a detailed breakup and analysis of the market based on the application. This includes food applications and industrial applications. According to the report, food applications represented the largest segment.

The food applications of fats and oils are notably high due to the culinary diversity and increasing processed food consumption. Oils and fats are essential ingredients in multiple local dishes, snacks, and processed foods. The food industry's growth, along with burgeoning fast-food chains, ensures a consistent demand for various types of fats and oils. Furthermore, innovations in food technology have led to oils and fats with extended shelf life and better nutritional profiles, making them more appealing to both consumers and manufacturers.

On the other hand, industrial use of fats and oils, including in the production of biofuels, lubricants, and cosmetics, is relatively minor in the market. Although the industrial segment is growing, it hasn't reached the scale of food applications. Advances in technology may boost the industrial usage of fats and oils, but currently, it represents a smaller market segment.

Breakup by Source:

• Vegetable
• Animal

Vegetable represents the largest market segment

The report has provided a detailed breakup and analysis of the market based on the source. This includes vegetable and animal. According to the report, vegetable represented the largest segment.

Vegetable oils, especially palm oil, soybean oil, and rapeseed oil, are dominant in the global market. The demand for vegetable oils is driven by its versatile applications in cooking, food processing, and as an ingredient in various food products. The health benefits associated with certain vegetable oils, like olive oil and flaxseed oil, are further boosting their popularity. Consumer preferences are gradually shifting towards healthier, more sustainable options, and vegetable oils often fit that criteria. Rising awareness about the environmental impact of animal-based oils is another influencing factor. Vegetable oils are also finding growing industrial applications, especially in biofuels and cosmetics.

On the other hand, although animal-based fats such as lard and tallow have traditional importance in several global cuisines, their market share is comparatively smaller. Health concerns related to saturated fats and cholesterol have contributed to a decline in their popularity. They continue to be used in specific food preparations and some industrial applications, but their growth rate is slower compared to vegetable oils.

Breakup by Sales Channel:

• Direct Sales
• Supermarkets and Hypermarkets
• Retail Stores
• Online Stores
• Others

The report has provided a detailed breakup and analysis of the market based on the sales channel. This includes direct sales, supermarkets and hypermarkets, retail stores, online stores, and other channels.

Direct sales segment in the global market is primarily driven by the strong relationships that manufacturers can build with consumers. This model eliminates intermediaries, allowing for competitive pricing and better control over product quality. Additionally, direct sales provide opportunities for real-time feedback, which manufacturers can use to improve or adapt their products.

On the other hand, supermarkets and hypermarkets remain a key sales channel in the market due to their widespread accessibility and the convenience they offer to consumers. They feature a broad range of products under one roof, which encourages one-stop shopping. Consumer trust in these established retail outlets, often driven by consistent product quality and the availability of diverse brands, also contributes to sales. Moreover, in-store promotions and discounts can significantly boost sales volumes in this segment.

Moreover, retail stores, particularly specialty shops focusing on organic or artisanal oils, are becoming increasingly popular. These stores offer curated selections that often include unique, high-quality products that are not commonly found in supermarkets. The knowledgeable staff in these specialty stores can provide valuable advice, driving customer trust and repeat visits. Location-based convenience is also a significant factor, as these stores are often situated in neighborhoods, making it easier for consumers to make quick purchases.

Besides this, the online segment of the fats and oils market is growing rapidly, primarily due to the convenience and broader selection options it offers to consumers. E-commerce platforms enable easy price comparisons and feature reviews, which help customers make informed decisions. Another driving factor is the rise of subscription-based models that offer scheduled deliveries, making it more convenient for consumers to restock their pantry. Moreover, the ease of searchability and accessibility to global brands contributes to the increasing preference for online shopping in this market segment.

Breakup by Region:

• North America
• United States
• Canada
• Asia Pacific
• China
• Japan
• India
• South Korea
• Australia
• Indonesia
• Others
• Europe
• Germany
• France
• United Kingdom
• Italy
• Spain
• Russia
• Others
• Latin America
• Brazil
• Mexico
• Others
• Middle East and Africa

Asia Pacific exhibits a clear dominance, accounting for the largest fats and oils market share

The market research report has also provided a comprehensive analysis of all the major regional markets, which include North America (the United States and Canada); Asia Pacific (China, Japan, India, South Korea, Australia, Indonesia, and others); Europe (Germany, France, the United Kingdom, Italy, Spain, Russia, and others); Latin America (Brazil, Mexico, and others); and the Middle East and Africa. According to the report, Asia Pacific accounted for the largest market share.

The Asia-Pacific region is a significant market for fats and oils, driven primarily by factors such as rising population, urbanization, and increasing disposable incomes. Cultural factors also contribute to the market expansion, as many local cuisines rely heavily on oils and fats for cooking. Additionally, fast-growing food and beverage industries in countries such as China, India, and Japan are increasing the demand for high-quality oils and fats.

Government regulations and consumer awareness regarding health benefits are pushing for better quality and more nutritious options in this segment. The booming cosmetics and personal care sectors are also contributing to demand, particularly for specialty oils. Local production capabilities, combined with a vast agricultural landscape, provide ample supply to meet the demand. Innovations in oil extraction technologies are further improving yields, making the region a global competitor.

Furthermore, the extensive distribution network including supermarkets, hypermarkets, and online platforms aids in market penetration. The presence of large-scale oilseed producers and crushers is advantageous for raw material procurement. The growing trend towards organic and cold-pressed oils represents a niche yet expanding segment, which make the Asia-Pacific region a complex and significant market for fats and oils.

Competitive Landscape:

The market players are employing various strategies to capture market share. Innovation is at the forefront, with companies focusing on R&D to develop healthier and high-quality products like omega-3 enriched and trans-fat-free oils. Mergers and acquisitions are common, enabling companies to expand their product range and global reach. Sustainability is another critical focus, with companies investing in environmentally responsible sourcing practices. Distribution channels are also diversifying, incorporating online sales and direct-to-consumer models. As companies look to emerging markets for expansion, marketing and branding strategies are being amped up to increase customer awareness and loyalty. Consumer education campaigns are in place to promote the health benefits of products. Quality assurance and adherence to international standards are high priorities. Strategic partnerships are further being formed to cater to specialized health needs and dietary requirements.

The report has provided a comprehensive analysis of the competitive landscape in the market. Detailed profiles of all major companies have also been provided. Some of the key players in the market include:

• Ajinomoto Co. Inc.
• Archer-Daniels-Midland Company
• Associated British Foods Plc
• Bunge Limited
• Cargill Incorporated
• Conagra Brands Inc.
• Fuji Oil Holding Inc.
• Unilever
• United Plantations Berhad
• Wilmar International Limited

Recent Developments:

• n June 2023, Ajinomoto announced the formation of the Health & Productivity Management Alliance, aimed at promoting better human capital management and corporate productivity. Yoshihito Yamada, Chairman of OMRON Corporation, will serve as the chairperson of the Alliance, which seeks to address financial difficulties in company-run health insurance and promote sustainable practices among Japanese corporations.
• n July 2023, Archer-Daniels-Midland Company (ADM) launched a significant expansion of its re:generations regenerative agriculture program, ensuring more North American producers can earn additional income while making a positive impact on the environment and their soil’s health. After successfully enrolling more than 1 million acres in 2022, ADM is continuing to invest to expand re:generations to cover 2 million acres in 2023, on its way to a goal of 4 million acres globally by 2025.
• n September 2021, Associated British Foods plc unveiled Primark's comprehensive new sustainability strategy aimed at using recycled or sustainably sourced materials, reducing carbon emissions by half, and pursuing living wages for its supply chain workers by 2030. The company expects minimal impact on operating profit margins and will regularly update stakeholders on the progress through its ESG reporting.

Key Questions Answered in This Report

1. What was the size of the global fats and oils market in 2023?

2. What is the expected growth rate of the global fats and oils market during 2024-2032?

3. What are the key factors driving the global fats and oils market?

4. What has been the impact of COVID-19 on the global fats and oils market?

5. What is the breakup of the global fats and oils market based on the type?

6. What is the breakup of the global fats and oils market based on the application?

7. What is the breakup of the global fats and oils market based on the source?

8. What are the key regions in the global fats and oils market?

9. Who are the key players/companies in the global fats and oils market?