Specialty Fats & Oil Market: Current Analysis and Forecast (2023-2030)

Specialty fats & oil are integral components in a wide range of products such as margarine, shortenings, dressings, confectionery products, baked goods, snack foods, infant formulas, and non-dairy creamers. Specialty fats & oil feature several important functionalities as filling, coating, stabilizing as well and texturing, which play a pivotal role in various food processing. The growth in food processing coupled with the rising end-users' awareness is acting as a growth catalyst for the industry. The growing health consciousness of customers has raised the demand for low-fat and low-calorie food products. Specialty fats & and oils are used in place of ordinary fats and oils in a variety of food applications. For instance, low trans-fat margarine is used in place of butter and regular margarine. Rising consumer awareness of the health benefits of Specialty fats & oil is anticipated to fuel market growth in the next years.

The Specialty Fats & Oil Market is expected to grow at a strong CAGR of 7% during the forecast period (2023-2030). Owing to the growing health concerns of the customers, leading food manufacturers are opting for good fatty acids as an important ingredient in food products. The growing demand for natural and plant-based ingredients in food items is another factor driving the demand for Specialty fats & oil generated from plants.

Based on type, the market is bifurcated into specialty fats and specialty oils. The specialty Fats segment is estimated to account for the highest market share. This is mainly owing to the high use of specialty fats in the baking and confectionery sectors due to their unique physical and chemical properties, which include the ability to improve texture, provide a rich flavor, and extend shelf life. Moreover, many major players in the market are investing in the development of specialty fats. For instance, in August 2021, Cargill broke ground on a specialty fats plant in Malaysia. The company invested USD 100 million to expand its global portfolio in specialty fats.

Based on the form, the market is fragmented into dry and liquid. The Dry segment is expected to grow with a significant CAGR during the forecast period. The majority of specialty fat products are found in their dry form, including dairy fat replacements, cocoa butter equivalents, cocoa butter substitutes, and cocoa butter improvers. These are often liquid fats with better melting curves, like oils. They make it easier to maintain the product structure for extended periods of time and for trade purposes. Through coatings and specific types of butter, specialty fats and oils in the dry form play a significant part in goods like chocolate and confectioneries.

Based on the application, the market is segmented into bakery products, processed food, animal nutrition, dairy products, and infant nutrition. The Infant Nutrition segment held a significant share of the market in 2022. Infant formula and infant food lipids, which essentially resemble the composition of mother's milk, are an emerging trend that is receiving increased attention in highly developed and fast-urbanizing countries. Due to diverse diets, there were many variances in mother's milk from different parts of the world, thus it was crucial to create a compound with ideal nutrition levels. Specialty fats & oil are essential in this situation since the product needs to have them in order to balance the overall composition of fatty acids.

For a better understanding of the market adoption of the specialty fats & oil industry, the market is analyzed based on its worldwide presence in countries such as North America (U.S., Canada, Rest of North America), Europe (Germany, U.K., France, Spain, Italy, Rest of Europe), Asia-Pacific (China, Japan, India, Rest of Asia-Pacific), Rest of World. Asia-Pacific currently holds the majority of the global market during the forecasted period. Due to the increasing demand for protein-rich foods and beverages, the demand for specialty fats & oil industry is also increasing. Moreover, the APAC region is home to a large and growing population, with a significant proportion of the population in urban areas. This has led to an increase in the demand for protein-rich foods and beverages, particularly among health-conscious consumers. Furthermore, movements towards plant-based diets have also increased the consumption of specialty fats & oil industry across the nation. Thus, the fast expansion of the food and beverage industries, particularly the processed food sector, is driving up demand for Specialty fats & oil in the Asia-Pacific region.

Some of the major players operating in the market include: Cargill, Incorporated.; Wilmar International Ltd; Bunge Limited; Mewah Group; AAK AB; IFFCO; Musim Mas; FUJI OIL CO., LTD; Manildra Group; BAKO WALES.