The specialty fats & oils market is driven by factors such as the increasing gap between cocoa butter demand & supply and an increase in the consumption of confectionery and processed foods. The major players in the food industry are investing in R&D activities to expand their specialty fats & oils product portfolios and attract more consumers by providing innovative products.
The global specialty fats market was valued at USD 2.13 Billion in 2017, and is projected to reach USD 3.66 Billion by 2023, growing at a CAGR of 9.4%. The global specialty oils market was valued at USD 14.67 Billion in 2017, and is projected to reach USD 21.19 Billion by 2023, growing at a CAGR of 6.3%.
- Increasing Gap Between Cocoa Butter Demand and Supply
- Growth in the Consumption of Confectionery and Processed Foods
- Demand for Clean-Label Products from Consumers
- Growing Production and Trade of Raw Material
On the basis of oil types, the specialty fats & oils market is segmented into palm oil, soybean oil, coconut oil, cottonseed oil, and rapeseed oil. The palm segment accounted for the largest share, followed by the soybean segment in 2016. Palm oils are majorly used to produce specialty oils & fats due to their compositions and wide availability. Palm oil is refined, bleached, and deodorized (RBD) to obtain specialty fat.
On the basis of application, the specialty fats & oils market is segmented into chocolates & confectioneries, bakery products, processed foods, and dairy products. The bakery products segment accounted for the largest share in 2016. High-income countries such as the UK, Canada, the US, Germany, and Spain have experienced growth in the production and consumption of ultra-processed food, mainly bakery products such as bread, pastries, cakes, and cookies, in the past few years. Shortenings, creaming fats, and specialty oils, such as cake oils, are increasingly used to enhance the product performance and to ensure higher consumer acceptance. These factors have accelerated the growth of this segment.
On the basis of form, the dry segment accounted for a larger market share in 2016, followed by the liquid segment. Commercially, vegetable oils are processed to attain a solid fat with optimum fat content to provide the required melting properties in a particular application. Their dry form also helps them to function as a replacer for dairy and cocoa fats and bear a resemblance either in the physical and/or chemical properties to dairy butter, dairy whipping cream, and cocoa butter without compromising on the palatability and quality of the end product. Due to these factors, the market for the dry form of specialty fats accounted for a larger share.
The Asia Pacific region is projected to be the fastest-growing market, and it also accounted for the largest share in 2016. The rising income, purchasing power, rapid growth of the middle-class population, and consumer demand for processed products provide promising prospects for growth and diversification in the region’s specialty fats & oils sector.