The fats and oils industry is expected to grow from USD 271.8 billion in 2024 to USD 323.7 billion by 2029, with a CAGR of 3.6% during the forecast period. This growth is driven by rising consumer demand for healthier dietary options and the expanding use of fats and oils in various food products. Enhanced awareness of the nutritional benefits of certain oils, along with advancements in processing and refining techniques, further fuel market growth. Additionally, the diversification of culinary practices and the development of functional oils with health advantages contribute to this expansion. Long-term investments in production capacity and supply chain optimization also support this upward trend.
Fats and Oils Market Drivers: Increasing oilseeds production
The rising global demand for edible oils, essential for both food and industrial uses, has significantly increased oilseed cultivation. The National Research Center in Egypt reports that oilseed crop areas have expanded by 82 percent over the past thirty years. This growth aligns with OECD projections, which anticipate global vegetable oil consumption will reach 249 million metric tons by 2022, driven largely by dietary shifts in the Asia-Pacific region. Soybean production will be a major contributor, expected to hit 41.1 million metric tons by 2030, primarily fueled by leading producers like the US and Brazil. Innovations in agricultural biotechnology, including genetically engineered proteins developed at Nanyang Technological University, could enhance oil yields by up to 18 percent, supporting sustainable practices to meet rising demand without increasing land usage.
Fats and Oils Market Opportunities: Growth in microencapsulation of fats and oils
The growing trend of encapsulation in the global food industry is creating significant opportunities in the specialty fats and oils market. This process enhances the stability, shelf life, and functionality of sensitive ingredients like omega-3 fatty acids, milk fat, and vegetable oils, protecting them from temperature fluctuations, moisture, and oxidation. As a result, these ingredients are increasingly suitable for functional foods, nutritional supplements, and pharmaceuticals. Major industry players are focusing on encapsulation techniques using matrices such as whey proteins and casein blends to produce fat-rich powders for diverse applications. This advancement not only leads to improved product development but also meets the rising consumer demand for health benefits.
Food Application Set to Lead Fats and Oils Market Share in the Forecast Period.
Food application holds the largest share of the market for fats and oils since it is an integral part of enhancing flavor, texture, and preservation in various food products. Not only this, but also, fats and oils play a huge role in terms of cooking and baking, adding definite desirable properties like crispiness and richness. Apart from this, they also work as carriers for fat-soluble vitamins and flavors, which are important for consumer acceptance. Thus, the growing demand for processed and convenience foods and increasing consumer preference for varied gastronomic experiences further drives food applications domination within this market segment.
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The liquid category within the fats and oils form segment maintains a significant position throughout the forecast period.
Most vegetable oils, such as olive, canola, and sunflower oil, are generally considered healthier than solid fats due to their lower saturated fat content and higher levels of unsaturated fats. These plant-based oils offer various health benefits, including improved heart health and lower cholesterol levels, making them appealing to health-conscious consumers.
Additionally, the rise of new flavors and food products in the industry is boosting the popularity of liquid oils. These versatile fats are favored for a wide range of uses, from cooking and frying to dressings and baking. Their ease of use and ability to enhance flavor and texture in foods have made them key ingredients in both home kitchens and commercial food production.
Asia Pacific Fats and Oils Market Projected to Experience the Highest CAGR During the Forecast Period.
The rapid urbanization, rising disposable incomes, and shifting dietary preferences toward processed and convenience foods are propelling the Asia-Pacific region to the forefront of the fats and oils market, boasting the highest compound annual growth rate (CAGR). With a growing population and an expanding middle class, the demand for edible oils for cooking and food processing is increasing. Additionally, the surge in fast food consumption and the growth of the food service industry contribute to market expansion. Strong economic growth and enhanced distribution networks further solidify the region’s leading position in the global fats and oils market.
The key players in the fats & oils market include ADM (US), Wilmar International Ltd (Singapore), Cargill, Incorporated (US), Bunge (US), Kaula Lumpur Kepong Berhad (Malaysia), Olam Agri Holdings Pte Ltd (India), Mewah Group (Singapore), Associated British Foods plc (UK), United Plantations Berhad (Malaysia), and Ajinomoto Co., Inc. (Japan).
