Fats and Oils Market Growth Drivers, Trends, Leading Manufacturers, and Forecast 2029

Growing consumer demand for healthier options in their diet and increasing adoption of fats and oils in various foodstuffs are boosting the fats and oils market growth. Better awareness of the nutritional value of specific oils and developments regarding processing and refining techniques act as drivers. Moreover, the expansion of culinary practices and increasing development of functional oils boasting health benefits add to the growth. Long-term investments in increasing production capacity and enhancing supply chains also uphold this growth trend. For example, Cargill's (US) launch of Gemini Pureit and refinery upgrade in Nellore boosts its position in India's fats and oils market by expanding production capacity and addressing demand in South India. This strategic move enhances supply chain capabilities, reinforces market leadership, and caters to the significant regional consumption of sunflower oil.

Fats and Oils Market Forecast

The global fats & oils market, estimated to be USD 271.8 billion in 2024, showcases a remarkable growth projection, anticipated to escalate to USD 323.7 billion by 2029, indicating a robust compound annual growth rate (CAGR) of 3.6% during the forecast period.

Fats and Oils Market Trends

Here are some key trends shaping the Fats & Oils Market:

1. Shift Toward Healthier Options

• Growing consumer awareness about health has increased the demand for low-fat and healthy oil alternatives like olive oil, avocado oil, and canola oil.
• Functional oils enriched with omega-3 and other nutrients are gaining traction.

2. Rising Demand for Plant-Based Oils

• The vegan and plant-based movement has driven the growth of oils derived from soy, sunflower, and rapeseed.
• Coconut and palm oil remain prominent due to their versatility in food and non-food applications.

3. Sustainability Initiatives

• Companies are focusing on sustainable palm oil production through certification programs (e.g., RSPO) to address environmental concerns.
• Recycled cooking oils and bio-based fats are gaining importance in reducing waste and carbon footprints.

4. Innovations in Processing Technologies

• Advanced extraction and refining techniques are improving oil quality and yield.
• Cold-pressed and virgin oils are in high demand for their perceived health benefits and premium positioning.

5. Increase in Industrial Applications

• The use of fats and oils in biodiesel production is expanding due to government initiatives promoting renewable energy.
• In the food industry, specialty fats like cocoa butter alternatives are being widely used in bakery, confectionery, and dairy products.

6. Emerging Markets Driving Growth

• Rapid urbanization and dietary changes in Asia-Pacific, Latin America, and Africa are spurring the consumption of edible oils.
• Growing middle-class populations in these regions are driving the demand for premium products.

7. Customized and Blended Oils

• Consumers are increasingly looking for tailored oil blends that cater to specific cooking styles and nutritional needs.
• Blended oils with balanced fatty acid profiles are gaining popularity.

Fats and Oils Market Drivers: Increasing oilseeds production

The ever-growing global demand for edible oils, important for both food and industrial applications, has more than significantly expanded oilseed cultivation. According to the National Research Center in Egypt, oilseed crop areas have surged 82 percent in the last thirty years. Growth is in line with OECD estimates that project worldwide vegetable oil consumption will grow to 249 million metric tons in 2022, steered by dietary changes in the Asia-Pacific region. The bulk of the contributors would be from soybean production, which is expected to reach 41.1 million metric tons by 2030. This shall be driven mainly by top producers, such as the US and Brazil. The agricultural biotechnology innovations, genetically engineered proteins invented at Nanyang Technological University, increase the yield of oil by up to 18 percent. This would complement sustainable practices by meeting increasing demand without boosting the use of land.

Asia Pacific Region Holds the Largest Share of the Fats & Oils Market.

The increasing pace of urbanization processes, rise in disposable incomes, and changing dietary patterns toward processed and convenience foods place the Asia-Pacific region at the top position with the highest CAGR in the fats and oils market. Given the growing population and expanding middle class, there is an increasing demand for edible oils for use in cooking and food processing. Growing fast food consumption and a developing food service industry further add to the growth in the market. Strong economic development and improvement in distribution networks also aid the leading position of the region in the global fats and oils market.

Top Fats and Oils Manufacturers:

The key players in the market are ADM (US), Wilmar International Ltd (Singapore), Cargill, Incorporated (US), Bunge (US), Kaula Lumpur Kepong Berhad (Malaysia), Olam Agri Holdings Pte Ltd (India), Manildra Group (Australia), Mewah Group (Singapore), Associated British Foods plc (UK), United Plantations Berhad (Malaysia), Ajinomoto Co., Inc. (Japan), Fuji Oil Co., Ltd. (Japan), Oleo-Fats (Philippines), Borges Agricultural and Industrial Edible Oils, S.A.U. (Spain), K S Oils Limited (India), CSM Ingredients (US), SD Guthrie International Zwijndrecht Refinery B.V. (Netherlands), Musim Mas Group (Singapore), Richardson International Limited (Canada), and AAK AB (Sweden).

ADM (US)

ADM is a food manufacturing company that is primarily involved in the production of food & beverage ingredients, feed & feed ingredients, industrial ingredients, biofuels, and naturally derived alternatives to industrial chemicals. The company operates through four business segments, namely, Ag services & oilseeds, carbohydrate solutions, nutrition, and others. The company offers oils derived from vegetable sources for food, industrial, and fuel applications.

The Ag Services and Oilseeds segment encompasses worldwide operations involving the sourcing, trading, transportation, and storage of agricultural raw materials. It also covers the crushing and further processing of oilseeds like soybeans and soft seeds (such as cottonseed, sunflower seed, canola, rapeseed, and flaxseed) into vegetable oils and protein meals. The products from oilseeds, produced and marketed by this segment, serve as ingredients for food, feed, energy, and industrial customers.

Wilmar International Ltd (Singapore)

Wilmar International Ltd. is one of the leading agribusiness companies. The company is involved in the cultivation of palm oil, crushing oilseed, refining edible oil, milling & refining sugar, and specialty fats. The company operates through four business segments, namely food products, feed & industrial products, plantations & sugar milling, and others.

Under its food products segment, Wilmar processes, brands, and distributes a wide variety of edible food products, including vegetable oils, sugar, flour, rice, noodles, specialty fats, snacks, bakery and dairy products, ready-to-eat meals, and central kitchen products, to wholesalers and distributors in China, Indonesia, India, Vietnam, Bangladesh, and Africa.

During FY2023, the company expanded its operational capacities across several countries and regions, including China, Malaysia, Indonesia, Ghana, India, The Netherlands, Sri Lanka, and Pakistan. These expansions encompassed diverse activities such as refining of edible oils, crushing of oilseeds and palm kernels, extraction of rice bran, milling of flour, palm oil, and sugar, packing of edible oils, rice, and flour, manufacturing of specialty fats, and production of cakes.

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