Global Normal and Specialty Fats Market - 2023-2030

Overview

Global Normal and Specialty Fats Market reached US$ 37.4 billion in 2022 and is expected to reach US$ 61 billion by 2030, growing with a CAGR of 6.3% during the forecast period 2023-2030.

The global fats market, encompassing both conventional and specialty fats, plays a pivotal role within the food industry. Fats serve as essential ingredients in a wide array of culinary applications, providing taste, and texture, and acting as carriers for fat-soluble vitamins. This market boasts a diverse product range, spanning typical fats like vegetable oils and animal fats, as well as specialized fats, including trans-fat-free options and cocoa butter substitutes

The growing popularity of convenience foods and processed snacks globally has resulted in an increased demand for normal and specialty fats used in food processing. These fats are indispensable for their textural and flavor-enhancing attributes, making them vital in the production of frozen foods, snacks, and processed meats.

Similarly, Asia-Pacific dominates the normal and specialty fats market, capturing the largest market share of over 1/3rd. Asia-Pacific stands out for its rich culinary diversity, encompassing a wide spectrum of cooking styles and food preferences. Each sub-region and country boasts its distinct culinary traditions, contributing to varying demands for specific fats and oils. For instance, palm oil is a staple in Southeast Asian cuisine, while ghee enjoys popularity in South Asian dishes.

Dynamics

Dietary Trends and Health Consciousness

Consumers are increasingly prioritizing healthier eating habits, which has instigated a noteworthy transformation in fat consumption patterns. Historically, saturated and trans fats held a prominent place in diets and food products. However, with scientific research establishing links between these fats and various health risks, including heart disease, consumers are actively seeking more health-conscious alternatives. This alteration in dietary preferences serves as a pivotal market driver.

Cardiovascular disease and stroke-associated risks increase with higher cholesterol concentrations. A high cholesterol level is an underlying cause in 30% of acute coronary artery disease occurrences globally. According to WHO report 2022 estimates, raised cholesterol levels leads to a total of 29.7 million DALYS (Disability-Adjusted Life Year), or 2% of the total DALYs, and 2.6 million total deaths (4.5% of all deaths). Hence, consumers are opting for healthy normal and specialty fats.

Apprehensions surrounding cholesterol and trans fats have driven the demand for healthier fat alternatives. Consumers are now intentionally avoiding fats with elevated cholesterol and trans fat content, a trend that has left its mark on products like margarine and shortenings. Manufacturers are adjusting the formulations of these products to align with consumer preferences for healthier fat choices, thereby fostering innovation in the market.

Economic Growth and Urbanization

Economic growth translates into higher disposable incomes, allowing consumers to diversify their diets and broaden their food choices. With greater spending capacity, there is an increased demand for normal fats and specialty fats, essential components in cooking, baking, and culinary preparation. This elevated demand is seen both in households and the food service sector.

Urbanization is often accompanied by a preference for a fast-paced lifestyle, driving an increased appetite for convenience foods and ready-to-eat meals. The production of such foods heavily relies on normal and specialty fats for purposes like enhancing flavor, improving texture, and prolonging shelf life. As urbanization fosters the convenience food sector's growth, it significantly drives the fats market.

Economic development and urbanization contribute to the thriving food processing sector, particularly in emerging markets. This industry depends extensively on normal and specialty fats for various applications, including manufacturing processed snacks, baked goods, confectionery, and packaged foods. The demand for these products directly influences the fats market, as manufacturers seek high-quality fats to enhance the taste and texture of their processed offerings.

Price Volatility

The fats and oils sector is notably responsive to shifts in the costs of raw materials, encompassing various sources of fats such as oilseeds and nuts. Escalations in raw material prices translate into heightened production expenses for normal and specialty fats. Manufacturers must then navigate the decision of absorbing these costs or transferring them to consumers through increased prices, which can squeeze profit margins and complicate financial planning and forecasting.

Price fluctuations in fats and oils have a direct bearing on the prices of food products that incorporate these ingredients. Consumers, particularly those in price-conscious markets, may react negatively to significant price hikes. When consumers perceive that normal and specialty fats have become excessively costly, they may explore alternatives or curtail their consumption. Such responses can lead to reduced overall demand, impeding market growth.

Regulatory Constraints

Regulatory constraints present a substantial obstacle in the normal and specialty fats market. This is particularly relevant due to the growing emphasis on food safety, accurate nutritional labeling, and health claims. Complying with these regulations is essential for industry players but can be intricate and costly. Various governments have implemented stringent regulations aimed at ensuring food safety and providing consumers with transparent and accurate information about the products they consume.

Guaranteeing the safety of food products, including fats, is paramount. This involves controlling contaminants like heavy metals, toxins, and microorganisms, which necessitates regular testing, quality control measures, and investments in advanced production and packaging technologies. Regulators scrutinize health claims and marketing practices. Products making health-related assertions, such as "heart-healthy" or "low cholesterol," must meet specific criteria.

Segment Analysis

The global normal and specialty fats market is segmented based on type, application, end-user and region.

Increased Demand for Bakery and Confectionery Normal and specialty fats

The Bakery and Confectionery segment held 34.5% of the global market share. The demand for normal fats within the context of the normal and specialty fats market is shaped by various factors that are pivotal in influencing consumer preferences and market dynamics. The demand for normal fats is primarily driven by their essentiality in daily cooking and food preparation.

Many traditional and regional cuisines have deep-rooted traditions that rely on specific normal fats. For instance, ghee (clarified butter) is a foundational ingredient in South Asian and Middle Eastern cuisines. Conventional cooking methods and authentic recipes frequently employ particular normal fats for their unique flavors and textures.

Normal fats are also integral in the creation of shelf-stable food products, encompassing canned goods, snacks, and packaged convenience foods. These fats contribute to product texture and serve to extend shelf life, making them crucial components in the food processing industry. Notable for their versatility, adaptability, and cost-effectiveness, normal fats are readily available and often more economically viable than specialty fats. Their affordability positions them as preferred choices for both household and foodservice cooking.

Beyond the kitchen, normal fats find application in various industries, including cosmetics and personal care products. This diversified demand contributes to the overall consumption of normal fats. For instance, in March 2023, The Sphinox Immulancesphinox is an innovative and special Ceramide based on uneven fatty acids that are known for their many health benefits as vitamin supplements. It favorably modulates the skin's natural anti-microbial defense when combined with phytosphingosine.

Geographical Penetration

Demand for Specialty Fat Products in Asia-Pacific

The Asia-Pacific normal and specialty fats market held the largest market share of 40.3% in 2022 in the normal and specialty fats market analysis. The Asia-Pacific region exhibits a multifaceted demand for both normal and specialty fats, driven by a combination of factors that reflect the diverse culinary, economic, and health-related landscape in the region.

The substantial economic growth experienced across many nations in the Asia Pacific region has translated into heightened consumer purchasing power. Rising incomes prompt individuals to diversify their diets and incorporate a wider range of foods, spurring the demand for fats and oils. Moreover, the consumption of specialty fats and oils, particularly in the production of processed foods and baked goods, has increased as disposable incomes rise.

In certain areas of Asia Pacific, particularly in India, traditional medical systems like Ayurveda advocate for the use of particular fats and oils with perceived health benefits. This has created a sustained demand for specific specialty fats, such as ghee and coconut oil, within both traditional and contemporary contexts.

In November 2021, to meet growing customer demand for specialty fats, Cargill has started construction on a $35 million expansion of its production facility in Port Klang, Malaysia. This is the first step in a multi-year, global investment expected to exceed US$100 million aimed to significantly expand the company's global portfolio in specialty fats.

In summary, the demand for normal and specialty fats in the Asia Pacific region is molded by a complex interplay of factors, including culinary diversity, economic prosperity, health consciousness, dietary transformations, the influence of Western diets, the thriving bakery and confectionery sector, emerging markets, and the enduring relevance of traditional fats within traditional medicinal systems. This multifaceted landscape is crucial for businesses seeking to cater to the evolving and diverse preferences of consumers in the region

Competitive Landscape

The major global players in the market include Cargill, Inc., ADM, Bunge Limited, Wilmar International, IOI Group, AAK AB, Fuji Oil, 3F Industries, FrieslandCampina and Fonterra Co-operative Group Limited.

COVID-19 Impact Analysis

Similar to many industries, the fats market experienced disruptions in its supply chain due to pandemic-related lockdowns, transportation restrictions, and labor shortages. These disruptions affected both the production and distribution of fats. With people spending more time at home due to lockdowns, there was a notable increase in the demand for edible fats used in cooking and baking. Conversely, the food service sector saw reduced consumption of fats due to restaurant closures.

The pandemic emphasized the importance of health and wellness, leading consumers to become more conscious of the types of fats they consumed. There was a preference for healthier fats and specialty options like olive oil and coconut oil. The economic consequences of the pandemic resulted in reduced consumer spending, influencing the demand for specialty fats and luxury food products. Consumers became more price-sensitive, affecting sales of specialty fats.

Russia-Ukraine War Impact Analysis

The Russia-Ukraine conflict has the potential to disrupt global commodity markets, including fats. Ukraine is a major exporter of sunflower oil, a key component of edible fats. Any interruptions in production and exports from Ukraine led to price fluctuations. Geopolitical tensions may lead to trade restrictions, sanctions, or political instability in the region. These factors can create ripple effects in the global fats market, impacting supply and demand dynamics.

To mitigate geopolitical risks, buyers in the fats market may seek to diversify their sources of supply. This could result in changes in trade patterns and supplier relationships, affecting market dynamics. The conflict could influence consumer sentiments and preferences. For instance, there may be changes in demand for fats and oils from regions that are perceived as more politically stable.

By Type

• Normal Fats

Butter

Margarine

Cheese

Vegetable Oils

Others

• Specialty Fats

Cocoa Butter Equivalent

Cocoa Butter Replacer

Spread Fat

Milk-Fat Replacer

Others

By Application

• Bakery and Confectionery
• Deep Fried Snacks
• Dairy Products
• Personal Care Products
• Others

By End-User

• Household
• Commercial

By Region

• North America
  • U.S.
  • Canada
  • Mexico

• Europe
  • Germany
  • UK
  • France
  • Italy
  • Russia
  • Rest of Europe

• South America
  • Brazil
  • Argentina
  • Rest of South America

• Asia-Pacific
  • China
  • India
  • Japan
  • Australia
  • Rest of Asia-Pacific

• Middle East and Africa

Key Developments

• In January 2022, The most prominent food manufacturer in the world, Cargill, announced the opening of its first innovation hub in India to create products for the food and beverage industry. According to a company statement, the first Cargill Innovation Centre in Gurugram, Haryana, is almost 17,000 square feet demonstration kitchen, and the ability to serve the dairy, beverage, specialty bakery fats, and convenience food industries in addition to other specialized culinary applications.
• In November 2021, Cargill began construction on a $35 million expansion of its production facility in Port Klang, Malaysia, to accommodate rising customer demand for specialty fats. This is the first phase of a multi-year, international investment that will likely cost more than $100 million USD and be targeted at greatly boosting the company's specialty fats global range.
• In May 2020, the development of Sweetolin, a total fat system with applications in confectionery coatings and fillings that can reduce sugar in the final product by up to 50%, has been announced by Bunge Loders Croklaan (BLC), a global leader in edible specialty oils and fats.

Why Purchase the Report?

• To visualize the global normal and specialty fats market segmentation based on type, application, end-user and region, as well as understand key commercial assets and players.
• Identify commercial opportunities by analyzing trends and co-development.
• Excel data sheet with numerous data points of normal and specialty fats market-level with all segments.
• The PDF report consists of a comprehensive analysis after exhaustive qualitative interviews and an in-depth study.
• Product mapping available as Excel consisting of key products of all the major players.

The global normal and specialty fats market report would provide approximately 61 tables, 57 figures and 212 Pages.

Target Audience 2023

• Manufacturers/ Buyers
• Industry Investors/Investment Bankers
• Research Professionals
• Emerging Companies