Fat Replacer Market

Fat Replacer Market Outlook

Fact.MR, a market research and competitive intelligence provider states the sales of fat replacers will likely surpass US$ 2 Bn by the end of 2021. Increasing consciousness regarding obesity along with the use of carbohydrate based fat replacers is surging the demand for fat replacers.

In addition, increasing demand from North America and Asia Pacific is influencing the sales of fat replacers. The fat replacer market has been increasing at a faster rate than the overall market, which has risen at a CAGR of 6% and will garner a market value of US$ 3.5 Bn in the forecast period.

Market Size Value in 2021	US$ 2 Bn
Project Market Forecast Value in 2031	US$ 3.5 Bn
Global Growth Rate (2021-2031)	5.76%
Market Share of North America	45%

Demand Analysis of Fat Replacer from 2016 to 2020 Vs Market Projections for 2021 to 2031

As per Fact.MR’s report, from 2016 to 2020, the market for fat replacers experienced a CAGR of around 5%.

Manufactures of fat replacers are focusing on improving the quality of fat replacers that would retain moisture and texture in different food products. Furthermore, companies are also venturing into providing alternatives that completely delete fat with the help of plant based products.

Thus, due to the reasons mentioned above, the sales of fat replacers are expected to surpass US$ 3.5 Bn by registering a CAGR of 6% in the sales indicator period 2021-2031.

Increasing Preference for Low-Fat Food Products among Consumers Boosting Demand for Fat Replacers?

Increasing incidence of obesity worldwide is resulting in consumers seeking low fat or fat-free foods & beverages products. Thus, food and beverages manufacturers are using protein-based, carbohydrate-based, and lipid-based fat replacers.

However, as fat replacers alone cannot meet essential attributes, food product manufacturers are also providing a combination of reduced fat products and fat replacers. Majority of the fat replacers in the fat replacer market are reformulations of previously used food ingredients.

Moreover, manufacturers in the food replacer market are formulating a new variety of fat replacer ingredients by using advanced technologies. In addition, Fat replacers are finding large application in the production of cookies, salad dressings, frozen desserts, low-fat cheese, chips, and ice-creams. Manufacturers are developing new products in fat-based fat replacers.

These products are likely to use a combination of fat and oil and find large application in products including chips, baked goods, and snack foods. Furthermore, majority of the new products with low-fat content made using fat replacers are awaiting approval by Food and Drug Administration.

Cost Effectiveness of Fat Replacers in Dairy Products Creating Growth Opportunities?

Increasing number of dairy product manufacturers are replacing expensive butterfat with vegetable fat owing to its cost-effectiveness and numerous health benefits. Manufacturers are focusing on improving structural quality and taste of fat replacers for use in dairy products.

The increasing demand for fat-free dairy products offering flavor and taste similar to the traditional dairy products is resulting in new fat replacer development. Production of the high quality of milk fat replacers made using specific vegetable fat blends is growing.

These fat replacers are used in a wide range of dairy products such as cheese, butter, and whipping cream. They are not only cost-effective but are also resulting in high adoption in developing regions. This, in turn, is increasing the sales of fat replacers. Furthermore, low-fat dairy beverages are also gaining traction across the globe with the introduction of new flavors and rise in health consciousness among consumers owing to increasing instances of obesity.

Government Regulations Positively Influencing Sales of Fat Replacers?

In addition to growing consumer demand for low-fat food products, governments across the globe are introducing new regulations on consumption of foods containing fat, along with setting a limit on daily consumption of fat.

Various policies that regulate and restrict trans fatty acids have been introduced in some countries. Switzerland, Denmark, and some states in the US have adopted regulatory approaches to controlling trans fatty acids in food products.

Most of the countries in Western Europe have taken initiatives to reduce fat content from factory-made foods. Resulting in the majority of established food companies under intense pressure to use substitutes such as fat replacers.

With an aim of global elimination of trans fat in food products, the World Health Organization (WHO) has introduced REPLACE, a guide to eliminate industrially produced trans-fatty acids. Several high-income countries have legally imposed limits on the amount of fat in various packaged food products. However, the action is still needed in low and middle-income countries to control fat in food products.

Several countries in Asia have introduced regulations on sugar, salt, and fat in food products. Countries like Malaysia, Singapore, Australia, and India are introducing regulations to reduce and eliminate trans-fat content in food products.

How is Industry-Institution Collaboration Developing Demand for Potential Fat Replacers?

Food industry and institutions are working together to develop new fat replacers, owing to some challenges in existing fat replacers in the market. A study conducted by Zhejiang Key Laboratory for Agro-Food Processing found that pectin recovered from citrus canning wastewater during preparation of canned citrus can be a potential fat replacer in ice-cream.

The study also found that adding pectin in ice-cream can increase viscosity, hardness and decrease meltdown of ice-cream. Various studies have also shown that replacing fat with inulin as fat replacer resulted in a significant reduction in fat content in food products.

Inulin, a carbohydrate-based fat replacer is finding large application in dairy products including plain and flavored yogurts, and cheese. Food processing industry is also moving towards using Aloe vera as a fat replacer in bakery products increasing its functional properties.

Aloe vera gel as a fat replacer in cake has also shown similar results in terms of texture, color, and softness to the cake prepared with 100% fat. Thus, research and development of new products in the fat replacer market is likely to drive growth and use in the food industry worldwide in near future.

Country-wise Analysis

Increasing Obesity Rate Propelling Demand for Fat Replacers in North America?

According to NPR, the coronavirus pandemic has increased the obesity rate in U.S. More than sixteen states in U.S. have crossed the threshold of 35% of obesity rate. Not only is the instant, fast food consumption creating a threat to health but also stress and job loss caused due to the pandemic has increased the obesity rate in U.S.

Moreover, government regulations for inclusion of sweet and fat based products in everyday food is playing a key role in the usage of fat replacers in a variety of ready-to-eat and ready-to-cook foods. Thus, a market value of over US$ 1.3 Bn is anticipated for the North American fat replacer market. The region is estimated to account for more than 45% market share.

Consumption of Convenience Food Accelerating Demand for Fat Replacers in Asia?

According to OECD iLibrary, more than 15% of the population is obese in the Asia Pacific. Increase in inclination towards fast food along with a sedentary lifestyle is playing a crucial role in the increasing obesity rates. Countries like China and South Korea are facing the problem of increasing obesity.

In addition, dependence on convenience food and instant food is the key reason for the increase in obesity in the region. In addition, increasing obesity rate in China has pushed the government of the country to adapt to fat replacers in everyday food that would not harm the health of the people.

Furthermore, heart related problems and no physical exercise has increased the demand for fat replacers. Thus, according to Fact.MR, Asia is expected to hold nearly 25% market share by registering a CAGR of 6% in the assessment period.

Category-Wise Insights

Increasing Consumption of Sweets Surging Demand for Fat Replacers in Bakery and Confectionery Industry?

Consumption of bakery and confectionary products has increased over the past few years. This is due to the convenient packaging and easy availability of the same across the globe. In addition, most of the bakery products such as croissants, pastries or cakes are consumed as desserts on daily basis. This, in turn, has increased the consumption of fat and sugar in people.

As awareness regarding fat consumption has increased, inclination towards healthier alternatives has increased too. Thus, people are preferring bakery products that are made with fat replacer ingredients. Owing to the factors mentioned above, by application, bakery and confectionery products are expected to possess more than 40% market share for fat replacers.

Low Calorie Count Making Carbohydrate Based Fat Replacers Popular in Fat Replacer Industry?

Fat replacers are categorized in carbohydrate-based fat replacer, protein-based fat replacer, and lipid-based fat replacer. Amongst these carbohydrate based fat replacers have gained popularity due to their existing properties.

Carbohydrate based fat replacers can retain moisture and create the same texture as fats. In addition, carbohydrate based fat replacers are largely used in bakery and confectionery industry. They are also used as stabilizers and thickeners for sauces and spreads. Carbohydrate based fat replacers have gained popularity as they possess calories between zero to four gram of calories. Thus, according to Fact.MR, carbohydrate based fat replacers are expected to hold more than 50% of market share for fat replacers.

Competitive Landscape

Expanding globally is one of the main focus areas of players in the fat replacer market. Hence, there has been a rise in partnerships and mergers and acquisitions activities.

• In July 2021, Corbion NV acquired full ownership of Granolife. With this acquisition, the company is focusing on strengthening its presence in the Mexican market.
• Tate & Lyle with its toolkit is helping customers across the globe to reformulate existing food products and create new foods. The company is also strengthening its relationship with nutrition bodies to share knowledge, expertise, and ensuring availability of resources to support balanced diets and lifestyle.

Report Scope

Attribute	Details
Forecast Period	2021-2031
Historical Data Available for	2016-2020
Market Analysis	US$ Mn for Value & ‘000 Units for Volume
Key Regions Covered	North America Latin America Europe East Asia South Asia Oceania Middle East & Africa
Key Countries Covered	U.S Canada Brazil Mexico Germany U.K Spain France Italy Russia India China Japan Australia New Zealand GCC South Africa
Key Segments Covered	Form Source Ingredient Application Region
Key Companies Profiled	Cargill Inc. Kerry Group Plc. Tate & Lyle Plc. Ingredion Incorporated Royal DSM N.V Ashland Global Holdings Inc. Archer Daniels Midland Company FMC Corporation Corbion N.V Associated British Foods Plc.
Pricing	Available upon Request

Key Segments Covered

• By Form ;

  • Powdered Fat Replacers
  • Liquid Fat Replacers

• BY Source :

  • Plant-based Fat Replacers
  • Animal-based Fat Replacers

• By Ingredients :

  • Carbohydrate-based Fat Replacer
  • Protein-based Fat Replacer
  • Lipid-based Fat Replacer

• By Application :

  • Fat Replacers for Convenience Food and Beverages
  • Fat Replacers for Bakery and Confectionery Products
  • Fat Replacers for Sauces, Dressings and Spreads
  • Fat Replacers for Dairy and frozen Desserts
  • Fat Replacers for Other Applications