Specialty Fat and Oil Market

Specialty Fat and Oil Market Outlook (2024 to 2034)

The global specialty fat and oil market is estimated at US$ 54.81 billion in 2024. A new study by Fact.MR forecasts the market to expand at a CAGR of 4.6% to reach US$ 85.94 billion by the end of 2034.

Specialty fats and oils are intermediate products with unique characteristics and superior functional properties when compared to traditional ones such as margarine and shortening. The altered crystal structure of the fat molecules in them is thought to be responsible for this superior quality. A range of food products benefit from customized applications made possible by the unique structure. Their original idea was to mimic the organoleptic properties of cocoa butter to replace it.

Key Market Growth Drivers

• Specialty fats and oils are finding new applications in the food industry as consumer interest in 'clean label' functional foods grows, as well as in 'free-from' and specialty foods.
• Growing demand for high-quality, safe, and indulgent bakery and confectionery products is driving sales of specialty fats and oils in the global market.
• Major confectioners and bakeries are becoming more sensitive to their customers' health concerns. It is claimed that specialty fats and oils strike a balance between processed foods' indulgence and health benefits.
• Specialty fats and oils have anti-inflammatory properties making them suitable for use in cosmetics and personal hygiene products. Cosmetic companies are looking for high-quality specialty oils with additional benefits.
• Antioxidants in specialty fats and oils counteract free radicals, which helps rejuvenate skin and address the growing trend toward natural cosmetics.
• Specialty oils and fats with genuine and reliable certifications appeal to food and cosmetic manufacturers. These fats with high exclusivity factors are projected to be extensively used in the creation of premium, high-value products during the forecast period.
• Specialty oils such as transformer oil and white oil are in great demand because of their growing use in power transformers, pharmaceuticals, and personal hygiene products. This is an important factor driving specialty fat and oil market growth.

Report Attribute	Detail
Specialty Fat and Oil Market Size (2024E)	US$ 54.81 Billion
Forecasted Market Value (2034F)	US$ 85.94 Billion
Global Market Growth Rate (2024 to 2034)	4.6% CAGR
East Asia Market Share (2024E)	22.4%
North American Market Share (2024E)	23.9%
Revenue from Sales of Specialty Oils (2024E)	US$ 7.83 Billion
Key Companies Profiled	Cargill Inc.; Kiril Mischeff; Nestle S.A.; Ariza B.V.; Tree Top Inc.; Shimla Hills Offerings Pvt. Ltd.; SunOpta Grains and Foods Inc.; The Kraft Heinz Co.; Nestle S.A.; Newberry International Produce Limited; Grunewald Fruchtsaft GmbH.

What are the Driving Factors for Global Sales of Specialty Fats and Oils?

“Rising Consumption of Processed and Ready-to-Eat Foods and Shift toward Natural Ingredients”

The market for specialty fats and oils is driven by ongoing technological advancements that improve the effectiveness of specialty fats and oils. Growing use of specialty fats and oils in cosmetics and personal care products due to their moisturizing, anti-inflammatory, and antioxidant properties is contributing to the expansion of the specialty fat and oil market size.

Specialty fats and oils are essential components in producing high-quality bakery and confectionery products with desirable textures and flavors. Increased consumption of processed and ready-to-eat foods requiring specialty fats and oils for texture, flavor, and shelf life enhancement. Specialty fats and oils provide specific functionalities such as emulsification, mouthfeel, and stability in processed foods.

Increasing demand from the food and beverage industry for natural ingredients has led to a significant increase in research into developing specialty fats and oils. The most popular sources of substitutes for cocoa butter are shea butter and derivatives of palm oil. Researchers are developing new, healthier substitutes for everything from hump fat to mango seeds.

What are the Key Challenges Faced by Producers of Specialty Fats and Oils?

“Unpredictable Weather Patterns and Unstable Political Environments”

Changes in consumer preferences, such as the declining popularity of certain oils (e.g., coconut oil), can impact revenue and demand stability. Growing health consciousness among consumers and stringent food safety regulations are necessitating adherence to new standards of processing, which can drive up costs. The prices of oil crops are unstable due to unpredictable weather patterns and volatile political environments. This instability affects the production levels of oil crop manufacturers, consequently limiting the supply of oil available to producers.

Country-wise Insights

North America is set to hold 23.9% of the global specialty fat and oil market share in terms of revenue in 2024. The popularity of specialty oils in the European market is growing, both as a consumer product and as a high-value ingredient. Specialty oils derived from nuts, such as coconut, walnut, and peanut are finding widespread applications in some European nations, including Germany, Italy, France, Poland, the United Kingdom, and Spain.

How Does the Nutritional Profile of Corn Oil Drive its Preference in the United States?

“Presence of Essential Fatty Acids and Vitamin E Appealing to Fitness Conscious Population”

Attribute	United States
Market Value (2024E)	US$ 5.83 Billion
Growth Rate (2024 to 2034)	5% CAGR
Projected Value (2034F)	US$ 9.52 Billion

The United States is set to hold a market share of 44.5% in the North American region in 2024. Global demand for corn from food and beverage manufacturers is increasing at a significant pace. In food products, corn oil is widely used in the United States and other North American countries. Corn oil is a preferred option for edible oil because it is a concentrated source of energy and provides essential fatty acids and vitamin E.

What is the Sales Outlook for Specialty Fats and Oils in Japan?

“Extensive Use of Specialty Fats & Oils in Functional Food Products to Enhance Flavor”

Attribute	Japan
Market Value (2024E)	US$ 3.55 Billion
Growth Rate (2024 to 2034)	5.1% CAGR
Projected Value (2034F)	US$ 5.84 Billion

A growing number of customers are looking for foods that provide health advantages over just basic nourishment in Japan. Functional food producers are increasingly using specialty fats and oils to improve flavor, texture, and nutritional content. Specialty fats and oils made from nuts, seeds, and avocados are in greater demand as more people are switching to plant-based diets in the country. These key specialty fat and oil market trends in Japan are benefitting manufacturers.

These alternatives to conventional animal-based fats are regarded as healthier by the public in Japan. People are becoming more aware of the ingredients in the food they eat. It is preferable to use specialty fats and oils that come from natural sources and are clean-label as they do not contain artificial additives.

Category-wise Insights

Specialty oils are set to hold a market share of 14.3% in 2024, while specialty fats account for 12.9%. Butter holds 13.8% of the global market share. Specialty oils are used in disease prevention due to their biological characteristics and health benefits. In addition, specialty oils are now utilized as skin emollience agents, transdermal carriers, co-adjuvants, excipients, and other pharmaceutical and cosmetic products.

Why are Sales of Margarine Showing an Upward Trend in the Market?

“Rising Use of Margarine as More Cost-effective and Healthier Substitute for Butter”

Attribute	Margarine
Segment Value (2024E)	US$ 7.89 Billion
Growth Rate (2024 to 2034)	5.3% CAGR
Projected Value (2034F)	US$ 13.23 Billion

Margarine is set to hold a market share of 14.4% in 2024. It is used to sauté vegetables, fry meats, and cook other foods in a pan. Additionally, margarine is also used in baking recipes in place of butter. Melted margarine is commonly used as a topping for vegetables, rice, pasta, and popcorn. Similar to butter, margarine is also spread on bread, toast, bagels, and other baked goods. It has a spreadable, creamy texture and is flavored to suit individual preferences with honey, spices, or herbs.

Why are Specialty Fats and Oils Extensively Used in Personal Care & Cosmetics?

“Anti-inflammatory Properties of Specialty Fats and Oils”

In the personal care and cosmetics sector, consumers' preference for natural products over synthetic is growing over time. There has been a recent rise in demand for specialty ingredients used in the personal care and beauty industries, such as olive and palm oils. Specialty fats and oils' anti-inflammatory and antioxidant properties make them ideal for cosmetics and personal care applications.

Competition Analysis

Key players in the specialty fat and oil industry prioritize research and development, investing heavily in innovation. Prominent companies employ mergers and acquisitions and geographic expansion as key strategies.

• Cargill Incorporated invested approximately US$ 35 million in November 2021 to expand its Port Klang, Malaysia production plant to meet the growing demand from consumers for specialty fats. This is the first stage of a multi-year international investment that will significantly expand the company's specialty fats global portfolio. The investment is expected to exceed US$ 100 million.

Fact.MR provides detailed information about the price points of leading manufacturers of specialty fats and oils positioned across the world, sales growth, production capacity, and speculative technological expansion, in this new market report.

Segmentation of Specialty Fat and Oil Market Research

• By Product :

  • Specialty Oils
  • Specialty Fats
  • Lauric Fats
  • Creaming Fats
  • Anhydrous Milk Fats
  • Butter
  • Margarine
  • Shortenings

• By End Use :

  • Industrial
  • Food & Beverages
  • Personal Care & Cosmetics
  • Commercial
  • Households

• By Region :

  • North America
  • Western Europe
  • Eastern Europe
  • Latin America
  • East Asia
  • South Asia & Pacific
  • Middle East & Africa