Growing concern over the use of healthy fats and oils as an ingredient has enthused the dairy-based product manufacturers to search for alternatives. Specialty fats and oils are one such alternative with low-calorie and cholesterol contents, superior gloss retention, and excellent flavor releasing properties. According to the Food and Agricultural Organization of the United Nations, global trade in dairy products valued at about 75 million tonnes in 2018. Increasing awareness among people towards strict health norms to enhance the quality of their life has reduced cholesterol intake, which has mellowed down the usage of traditional cooking oils. The nutritional value of specialty oils and fats is significantly higher than other oils available, which further influences the growth of the specialty fats and oils market. Rising consciousness about the benefits of consumption of edible fatty acids and the growing consumer preferences for products that are natural in origin is providing the overall boost to the market. The global specialty fats and oils market size was valued at $19.17 billion as of 2018 and is anticipated to grow with a CAGR of 6.4% throughout the forecast period 2019-2025.
The widening gap between demand and supply of cocoa butter and rising alertness about the benefits of essential fatty acid consumption are the key factors impelling the growth of specialty fats and oils market. Specialty fats and oils are used as an alternative to saturated fats and exhibit excellent elasticity, and fat crystallization properties at lower viscosities. Soybean oil is used to lower total cholesterol content in the human body, and it is also used in the osteoarthritis treatment. Olive and rapeseed oils also have several health benefits over traditional oils. Olive oil has strong anti-inflammatory properties and is used to prevent cardiovascular ailments, and it contains large amounts of antioxidants. Rapeseed oil has the lowest saturated fat content than any other oil, and it is a good source for Omega fatty acids. Increasing consumption of chocolates, the growing popularity of dark chocolate varieties, as well as fluctuating prices of cocoa has led to the development of cocoa alternatives such as specialty fats in confectionery and bakery products. A rapid increase in costs of cocoa butter, which is a major ingredient of chocolate production has considerably driven the demand for butter alternatives such as cocoa butter substitutes (CBS).
Factors Driving Growth of the Specialty Fats and Oils Market:
Growing demand for packaged food products
Modern retail trades and changing lifestyles of the consumers are the key factors for the increased packaged food consumption. These products are free from external tampering and easy to handle. These advantages bode well for urban consumers, who seek convenient and ready-to-eat meals to suit their evolving and fast-paced lifestyles. Nowadays, customers are looking for healthier snacks and food items with low fat and cholesterol content. The growing awareness of the people towards proper nutrition has led to an increased consumer inclination towards packaged food, which in turn, incite the growth of the specialty fats and oils market around the globe.
Rising Chocolate Consumption
Rapid urbanization and growing middle-class population have triggered an increasing uptake of chocolate. Specialty fats and oils are mostly used as ingredients in the chocolate industry. For instance, a specialty fat such as cocoa butter used in chocolate manufacturing is capable of hardening and setting on the surface of a cake and offer a smooth mouthfeel. Dark chocolate has several health benefits, such as it enhances brain function, lowers blood pressure, improves blood flow, and reduces the risk of heart diseases. Furthermore, these are rich in antioxidants and contains soluble minerals, fibers, and bioactive compounds. Therefore, owing to its broad range of health benefits, chocolate consumption is expected to aid the global specialty fats and oils market.
Demand for Low-Fat Dairy Products
For weight loss, low-fat dairy products can provide a solid nutritional base. Milk minerals play a major role in bone metabolism during weight loss. Fat-free and low-fat dairy products are recommended to reduce calorie, saturated fat, and cholesterol intake and provides the same amount of required vitamins and minerals to the body. Low-fat dairy products can prevent low blood pressure risk. Low-fat dairy products can minimize the risk of getting cognitive health disorders such as cardiovascular diseases and metabolic syndromes. These benefits of low-fat dairy products, in turn, trigger the growth of the specialty fats and oils market.
Asia-Pacific Holding Major Share of the Specialty Fats and Oils Market
Asia-Pacific generated 40% of the specialty fats and oils global revenues in 2018. The increased purchasing power of the population and consumer demand for processed products are key factors for the growth of the specialty fats and oils market in this region. Changing tastes of customers in emerging nations has led market players to expand their product range. Moreover, specialty oil such as palm oil, which is used for manufacturing certain types of shortenings is extensively grown and consumed in APAC countries. The increase in quality of chocolates and consumption of bakery food products in emerging economies such as China and India has further triggered the demand for specialty fats and oils.
The application segment that will be creating the most lucrative opportunities for the specialty fats and oils market is bakery products. This application segment is projected to grow at a CAGR of 5.6% through to 2025. Partially hydrogenated oil contains trans fats with wide ranges of temperature and plasticity tolerances, which are widely used in the baking industry. So, there is a growing demand for non-PHO products in the bakery industry, which, in turn, spur the growth of the specialty fats and oils market worldwide.
The Major Players in the Specialty Fats and Oils Market:
Prominent players in the specialty fats and oils market include AAK AB, Bunge, Cargill, D&L Industries, Fuji Oil, IFFCO, IOI Group, Manildra, Musim Mas, Mewah International, The Nisshin Oillio Group, and Wilmar International.
Mergers and acquisitions are the other key strategies adopted by the players to stay ahead of their competitors. AAK AB, a Swedish-Danish based Vegetable Oils and Fats Company, has announced its acquisition with Maas Refinery B.V., a Dutch company specialized in toll refining of vegetable oils and fats on Feb 20, 2019. With this acquisition, AAK has increased its customer base and also enhanced its product portfolio with conventional and organic oils and fats. Such joint ventures aid the market players to expand their geographical boundaries and accentuate their footprint into the global specialty fats and oils market.
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