Fats & Oils Market Size, Share, Growth, and Industry Analysis, By Types (Liquid, Solid), By Applications (Food, Industrial, Personal care, Animal feed, Pharmaceutical), Regional Insights and Forecast to 2033

Fats & Oils Market Size

The Global Fats & Oils Market was valued at USD 272,028.38 million in 2024 and is projected to reach USD 281,277.35 million in 2025, further expanding to USD 367,535.31 million by 2033, driven by evolving consumer preferences and increasing demand for healthier alternatives.

The US Fats & Oils Market is witnessing steady growth due to the rising adoption of plant-based oils, increasing demand for biodiesel, and growing awareness regarding the health benefits of unsaturated fats. Additionally, the expanding food processing industry and innovations in edible oil fortification contribute to market expansion, supporting a robust trajectory in the coming years.

The global fats and oils market is experiencing significant growth, driven by increasing demand across various industries. Vegetable oils, such as soybean, palm, and sunflower oils, dominate the market due to their versatility and health benefits. Animal fats, including butter and lard, also hold a substantial share, particularly in traditional culinary applications. The food industry's reliance on fats and oils for enhancing flavor, texture, and shelf life contributes to market expansion. Additionally, the personal care and cosmetics sectors utilize these substances for their moisturizing properties, further bolstering demand. The biofuel industry's adoption of vegetable oils as renewable energy sources presents new growth avenues for the market.

Fats & Oils Market Trends

The fats and oils market is undergoing notable transformations influenced by consumer preferences and global economic shifts. A significant trend is the growing consumer inclination towards healthier options, leading to a 15% increase in demand for unsaturated fats like olive and canola oils. Conversely, the consumption of trans fats has declined by 8% due to rising health concerns.

Sustainability has become a focal point, with 25% of consumers opting for products sourced through sustainable practices. This shift has prompted manufacturers to adopt eco-friendly sourcing and production methods. Technological advancements have enhanced oil extraction efficiency by 12%, resulting in higher yields and cost reductions.

In the Asia-Pacific region, urbanization and increasing disposable incomes have led to a 20% surge in processed food consumption, subsequently boosting the demand for cooking oils. The biofuel sector's expansion has also impacted the market, with 10% of vegetable oil production now diverted to biofuel manufacturing.

However, price volatility remains a challenge, as adverse weather conditions and geopolitical tensions have caused a 5% fluctuation in raw material costs over the past year. To mitigate these risks, companies are investing in supply chain diversification and exploring alternative oil sources.

Overall, the fats and oils market is adapting to evolving consumer preferences and global economic dynamics, indicating a trend towards healthier, sustainable, and innovative product offerings.

Fats & Oils Market Dynamics

DRIVER

"Rising demand for pharmaceuticals"

The increasing use of fats and oils in pharmaceutical formulations has driven demand by 18% in the past five years. Omega-3 and Omega-6 fatty acids, extracted from edible oils, are widely used in dietary supplements, contributing to a 22% growth in consumption. The demand for medium-chain triglycerides (MCTs) in drug delivery systems has increased by 14% due to their enhanced bioavailability. In addition, emulsifiers derived from vegetable oils are now utilized in over 30% of pharmaceutical formulations, improving solubility and absorption of active ingredients.

RESTRAINTS

"Supply chain disruptions affecting raw material availability"

Fluctuations in the global supply chain have led to a 12% decrease in the availability of key raw materials like palm oil and soybean oil. Geopolitical tensions have further constrained trade routes, impacting 28% of the total oil imports worldwide. Extreme weather conditions, including droughts and floods, have caused a 9% drop in oilseed production, directly affecting supply levels. Additionally, regulatory restrictions on deforestation have limited palm oil production by 15%, reducing overall market supply. These disruptions have increased operational costs by approximately 10%, affecting profit margins for manufacturers.

OPPORTUNITY

"Growth in plant-based alternatives and functional foods"

The rise in plant-based diets has increased the demand for alternative fats and oils by 26%, particularly in the food and beverage industry. Functional foods enriched with healthy fats, such as omega-rich oils, have witnessed a 19% surge in sales. The growing preference for plant-based dairy and meat substitutes has boosted the use of coconut and avocado oils by 21%. Moreover, innovations in oil processing have led to a 13% improvement in nutritional profiles, making plant-based fats a viable alternative for health-conscious consumers. This trend has opened new avenues for manufacturers to cater to evolving dietary preferences.

CHALLENGE

"Rising costs and expenditures related to oil extraction and refining"

The cost of oil extraction and refining has increased by 11% due to higher energy prices and stricter environmental regulations. Processing costs have surged by 16% as industries shift to sustainable extraction methods. The rising demand for organic and non-GMO oils has further driven production expenses up by 14%. Additionally, compliance with food safety and environmental guidelines has led to a 9% increase in operational costs. Companies are struggling to balance affordability and quality while maintaining profitability in a highly competitive market.

Segmentation Analysis

The fats and oils market is segmented based on type and application, influencing consumption trends and industry growth. The type segment is categorized into liquid and solid fats, each serving distinct purposes in various industries. Liquid oils, including vegetable oils, dominate the market due to their versatility and health benefits, while solid fats are widely used in bakery and confectionery applications.

The application segment includes food, industrial, personal care, animal feed, and pharmaceuticals, each with unique market drivers. The food industry remains the largest consumer, while industrial applications, such as biofuel production, continue to expand. The growing demand for plant-based and functional foods is reshaping the usage patterns of fats and oils across multiple industries.

By Type

• Liquid: Liquid fats, including palm, soybean, and sunflower oils, account for over 65% of total market consumption due to their widespread use in cooking, frying, and food processing. The demand for healthier liquid oils, such as olive and canola, has risen by 18% as consumers shift toward heart-friendly diets. The biofuel sector also contributes to liquid oil consumption, with 12% of global vegetable oil production diverted to biodiesel manufacturing.

• Solid: Solid fats, such as butter, lard, and hydrogenated oils, play a crucial role in bakery, confectionery, and processed foods. These fats enhance texture and shelf life, making them indispensable in these industries. Despite health concerns over trans fats, the consumption of solid fats remains stable, with a 9% increase in demand for bakery margarine and shortening products. The chocolate industry alone relies on cocoa butter, which constitutes 28% of its total fat usage.

By Application

• Food: The food sector consumes approximately 72% of all fats and oils, with cooking oils and margarine being the most commonly used products. The demand for plant-based fats in food processing has risen by 20%, driven by vegan and vegetarian dietary preferences. Additionally, bakery and confectionery applications contribute to 30% of total food-related fat consumption.

• Industrial: The industrial segment accounts for 15% of total market usage, with biofuel production being a major driver. Biodiesel manufacturing relies on vegetable oils, leading to a 10% increase in demand for rapeseed and soybean oils. Lubricants and oleochemicals derived from fats and oils are also seeing a steady 7% rise in industrial applications.

• Personal Care: The cosmetics and personal care industry utilizes fats and oils in skincare, haircare, and soap production. Shea butter, coconut oil, and argan oil are key ingredients, with a 22% increase in demand for natural and organic formulations. The anti-aging segment alone has driven a 14% growth in the use of essential fatty acids in skincare products.

• Animal Feed: The animal feed industry incorporates fats and oils to enhance the nutritional value of livestock diets. This segment represents 8% of the total market, with fish oil consumption rising by 12% due to its benefits for aquaculture. Poultry feed formulations have also seen a 10% increase in the use of vegetable oils to improve energy content.

• Pharmaceutical: Pharmaceutical applications of fats and oils are expanding, particularly in drug delivery systems and nutritional supplements. Omega-3 fatty acids, sourced from fish and flaxseed oils, have experienced a 16% rise in usage due to their cardiovascular health benefits. Additionally, excipients derived from fats contribute to 9% of the pharmaceutical industry's overall formulation needs.

Regional Outlook

The fats and oils market exhibits significant regional variations driven by consumption patterns, industrial demand, and dietary preferences. North America and Europe witness a steady demand for plant-based and functional fats, whereas Asia-Pacific dominates due to high consumption of palm and soybean oils. The Middle East & Africa market is influenced by changing food habits and increasing use of oils in processed foods. Each region's market is shaped by factors such as health trends, biofuel policies, and agricultural production, impacting the availability and price of fats and oils.

North America

The North American fats and oils market is expanding due to rising demand for healthier oils. Consumption of olive and avocado oils has grown by 22%, driven by health-conscious consumers. The food processing industry accounts for 68% of total oil usage, with canola and soybean oils leading the market. The biofuel industry also plays a crucial role, contributing to 14% of total vegetable oil consumption. Additionally, the shift towards organic and non-GMO oils has led to a 17% increase in demand for specialty oils.

Europe

Europe’s fats and oils market is experiencing a shift toward sustainable and organic oils. The demand for sustainably sourced palm oil has increased by 19%, reflecting consumer awareness of environmental impact. The bakery and confectionery sector remains a key driver, consuming 42% of total solid fats like butter and margarine. Additionally, the growing vegan population has contributed to a 15% rise in plant-based oil alternatives. The biofuel sector also influences the market, with 12% of rapeseed oil production allocated for biodiesel manufacturing.

Asia-Pacific

Asia-Pacific dominates the global fats and oils market, accounting for over 45% of total consumption. Palm oil remains the most widely used, with Indonesia and Malaysia supplying nearly 85% of global palm oil exports. Rapid urbanization and increased processed food consumption have resulted in a 28% rise in demand for cooking oils. Additionally, the region's growing middle class has driven a 20% increase in premium and fortified edible oils. The biofuel sector also contributes, with 10% of regional vegetable oil production directed toward biodiesel.

Middle East & Africa

The Middle East & Africa fats and oils market is expanding due to increasing demand for vegetable oils in food applications. The consumption of sunflower and palm oils has risen by 24%, driven by fast-food expansion and urbanization. The bakery sector accounts for 30% of total fat consumption, with margarine and butter playing a significant role. Additionally, the cosmetic and personal care industry has contributed to a 15% rise in demand for shea butter and argan oil. Rising imports of edible oils have also led to a 10% increase in domestic refining capacity.

LIST OF KEY FATS & OILS MARKET COMPANIES PROFILED

• Wilmar International Limited
• Ajinomoto Co. Inc
• Associated British Food Plc
• Archer Daniels Midland Company
• International Foodstuff Company Holdings Ltd
• Bunge Limited
• Unilever Plc
• Cargill Incorporated
• United Plantations Berhad

Top companies having highest share

• Wilmar International Limited: Holds approximately 18% of the global fats and oils market share, driven by its strong presence in palm oil refining and edible oil production.
• Cargill Incorporated: Commands around 15% of the market, leveraging its extensive supply chain and diversified portfolio of vegetable and animal-based fats.

Technological Advancements

The fats and oils market is experiencing rapid technological innovations aimed at improving extraction efficiency, product quality, and sustainability. Advanced refining techniques have increased oil yield by 15%, reducing waste and optimizing resource utilization. Cold-press extraction methods, which preserve nutritional value, have gained popularity, with a 12% rise in adoption among premium oil manufacturers.

Enzymatic interesterification, a modern processing technique, has replaced chemical hydrogenation in 30% of margarine and shortening production, reducing harmful trans-fat content. Additionally, advancements in nanoencapsulation technology have enhanced the stability of omega-3 fatty acids in edible oils, leading to a 17% increase in their use within functional foods.

Automation and AI-driven monitoring systems in oil refineries have improved operational efficiency by 20%, ensuring better quality control and reduced production costs. Meanwhile, innovations in biotechnology have enabled the production of structured lipids, which have seen a 14% increase in use for specialized nutrition applications.

Sustainable production methods, such as zero-waste palm oil processing, have gained traction, with 25% of palm oil producers adopting eco-friendly refining technologies. Furthermore, alternative oil sources, such as algae-derived omega oils, have witnessed an 11% rise in commercial-scale production, catering to the growing demand for plant-based and sustainable fats.

Recent Developments

• India's Shift in Edible Oil Imports: In 2024, India's annual palm oil imports are projected to decrease to 7.5 million tonnes, marking the lowest level in five years. This decline is attributed to a significant price increase in palm oil compared to soybean and sunflower oils, leading refiners to opt for more cost-effective alternatives. Consequently, imports of soybean and sunflower oils are expected to rise, potentially impacting global palm oil prices and supporting U.S. soybean oil futures.

• Indonesia's Palm Oil Export Restrictions: In early 2024, Indonesia implemented restrictions on palm oil exports to combat illicit trade, resulting in an oversupply of palm oil domestically. This surplus led to a decrease in prices, although a rebound was observed due to anticipated climate impacts affecting Malaysian production. To address the excess supply, Indonesia plans to increase its biofuel mandate to contain 40% palm oil.

• Surge in Butter Prices: In mid-2024, butter prices experienced a significant surge due to a combination of factors, including increased exports to meet high global demand and challenges in domestic supply. Australia, for instance, produced 8% more butter in the 2023-24 period but faced reduced domestic availability as exports resumed to satisfy international markets. This surge in demand, coupled with supply constraints, led to steep price increases across regions, including Australia and Europe.

• Olive Oil Price Increase: By late 2024, olive oil prices reached unprecedented levels due to adverse weather conditions affecting major producing regions. Extreme heatwaves and droughts, particularly in Europe, led to a significant drop in olive oil production. For example, global production fell from 3.39 million tonnes in 2021-22 to 2.28 million tonnes in 2023-24. This reduction in supply, coupled with ongoing high demand, resulted in substantial price increases, with consumers in the UK witnessing prices rise from £3.75 in 2021 to £10 in 2023 for a 500ml bottle of extra virgin olive oil. 

• U.S. Shift Towards Beef Tallow:

  In early 2025, the confirmation of Robert F. Kennedy Jr. as head of the U.S. Department of Health and Human Services brought attention to beef tallow as a preferred cooking fat over seed oils. His advocacy led to a notable shift in the food industry, with fast-food chains like Steak 'n Shake transitioning to beef tallow for cooking. This change reflects a growing trend towards traditional animal fats, influenced by health considerations and consumer preferences.

REPORT COVERAGE

The fats and oils market report provides a comprehensive analysis of key market trends, regional insights, segmentation, competitive landscape, and recent technological advancements. The study covers both vegetable and animal-based fats, highlighting their demand across various industries such as food, personal care, pharmaceuticals, and biofuels.

The report includes an in-depth segmentation analysis, revealing that liquid oils, including soybean, sunflower, and palm oil, account for over 65% of total market consumption. Solid fats, such as butter, margarine, and lard, remain vital for bakery and confectionery applications, contributing to 30% of total food-related fat usage. The food industry dominates the application segment, consuming approximately 72% of total fats and oils, followed by industrial applications, which account for 15% of total usage.

Regionally, Asia-Pacific leads the market, representing over 45% of total global consumption, with Indonesia and Malaysia supplying nearly 85% of palm oil exports. North America has witnessed a 17% increase in demand for organic and non-GMO oils, while Europe has seen a 19% rise in sustainable palm oil consumption. The Middle East & Africa markets are expanding, with a 24% increase in vegetable oil consumption due to urbanization and changing dietary habits.

The report also explores recent technological advancements, including cold-press extraction, which has seen a 12% increase in adoption, and enzymatic interesterification, now used in 30% of margarine and shortening production. Additionally, biofuel applications have driven a 10% increase in vegetable oil usage for biodiesel production.