Cooking Oils and Fats Market Size (2024 – 2030)

As of 2023, the Global Cooking Oils and Fats Market is valued at approximately USD 123.5 billion and is projected to reach USD 178.3 billion by 2030, growing at a compound annual growth rate (CAGR) of 5.3% during the forecast period.

Key factors driving the market include the growing consumption of processed and ready-to-eat foods, increasing health awareness, and the rise in demand for plant-based and trans-fat-free oils and fats. In response to evolving consumer preferences, manufacturers are focusing on producing healthier alternatives with lower saturated fats and higher nutritional content. Furthermore, the growth of the food service industry, along with the expanding use of oils and fats in commercial kitchens, is contributing to the increasing demand for cooking oils and fats worldwide.

Key Market Insights:

• Vegetable oils hold the largest market share, accounting for 65% of the total market, driven by their widespread use in both household and commercial applications.

• The online retail channel for cooking oils and fats is expected to grow at a CAGR of 6.7%, supported by the increasing trend of e-commerce and direct-to-consumer platforms.

• Palm oil is the most consumed type of vegetable oil globally, particularly in Asia-Pacific, where it accounts for 55% of the region’s total consumption.

• Asia-Pacific dominates the global market with over 35% market share, driven by high consumption levels, especially in countries like China, India, and Indonesia.

Global Cooking Oils and Fats Market Drivers

Rising Demand for Healthier Oils and Fats is driving the market growth
Consumer preferences are shifting toward healthier cooking oils and fats due to rising awareness about the harmful effects of trans fats and excessive saturated fat consumption. This shift is driving the demand for oils rich in unsaturated fats, such as olive oil, canola oil, and sunflower oil, which are perceived to offer numerous health benefits, including lowering cholesterol levels and reducing the risk of heart disease. Additionally, there is a growing interest in cold-pressed oils, which retain more nutrients and antioxidants, compared to their refined counterparts. The popularity of plant-based diets and vegetarianism is also contributing to the rising demand for vegetable oils, particularly those that are free of animal derivatives. As a result, manufacturers are focusing on product innovations to cater to the growing health-conscious consumer base, including launching new products that are non-GMO, organic, and enriched with omega-3 fatty acids and other essential nutrients.

Growing Food Service Industry is driving the market growth
The booming food service industry, especially in emerging economies, is one of the key drivers of the cooking oils and fats market. With the rise in the number of restaurants, fast-food chains, and food delivery services, there is a growing demand for oils and fats used in frying, baking, and other food preparation processes. Fast-food outlets, in particular, consume large quantities of frying oils such as palm oil, soybean oil, and canola oil due to their cost-effectiveness and high-temperature resistance. Moreover, the increasing popularity of global cuisines that require specific types of oils and fats, such as olive oil for Mediterranean dishes or ghee for Indian cooking, is further expanding the market. The growth of the quick-service restaurant (QSR) sector, coupled with the trend of eating out or ordering food online, is expected to continue boosting the demand for cooking oils and fats over the forecast period.

Expanding Online Retail Channels is driving the market growth
The expansion of e-commerce and online retail channels is creating new opportunities for the cooking oils and fats market. Consumers are increasingly purchasing cooking oils and fats through online platforms due to the convenience, competitive pricing, and variety of products available. Online retailers offer a wider selection of specialty oils and fats that may not be readily available in traditional brick-and-mortar stores, such as cold-pressed oils, organic oils, and imported products. The COVID-19 pandemic has also accelerated the adoption of online shopping for cooking oils and fats, with many consumers preferring the safety and ease of home delivery. Post-pandemic, the trend of online grocery shopping is expected to persist, with e-commerce becoming an integral part of the distribution landscape for cooking oils and fats.

Global Cooking Oils and Fats Market Challenges and Restraints

Environmental and Ethical Concerns Related to Palm Oil Production is restricting the market growth
One of the major challenges facing the Global Cooking Oils and Fats Market is the increasing scrutiny of palm oil production due to its environmental and ethical implications. Palm oil, one of the most widely used vegetable oils, has been linked to deforestation, habitat destruction, and biodiversity loss in tropical regions. The expansion of palm oil plantations has led to significant deforestation, particularly in Southeast Asia, resulting in negative impacts on local ecosystems and wildlife, including the endangered orangutan population. In addition to environmental concerns, palm oil production has also been associated with human rights violations, including the exploitation of workers on plantations. These issues have led to a growing backlash against palm oil, with consumers, advocacy groups, and governments calling for more sustainable and ethically sourced alternatives. As a result, manufacturers are facing pressure to adopt sustainable sourcing practices, such as using certified palm oil from suppliers that adhere to environmental and social responsibility standards.

Fluctuating Prices of Raw Materials is restricting the market growth
The volatility in the prices of raw materials, particularly vegetable oils, poses a significant challenge to the cooking oils and fats market. The prices of key oils, such as soybean oil, palm oil, and sunflower oil, are influenced by various factors, including weather conditions, agricultural yields, geopolitical tensions, and trade policies. For instance, poor weather conditions in major producing regions can lead to lower crop yields, resulting in supply shortages and price hikes. Similarly, geopolitical issues, such as trade restrictions or tariffs, can disrupt the supply chain and lead to price fluctuations. These factors make it difficult for manufacturers to maintain stable production costs, which can affect profit margins and lead to higher prices for consumers. The challenge of managing fluctuating raw material costs is particularly acute for small- and medium-sized producers, who may have limited ability to absorb price increases or pass them on to customers.

Market Opportunities

The Global Cooking Oils and Fats Market presents significant opportunities for growth, especially in the areas of sustainable sourcing and healthier product innovations. The rising consumer demand for sustainable and ethically sourced oils, particularly palm oil, offers an opportunity for manufacturers to differentiate themselves by adopting responsible sourcing practices. Companies that invest in sustainability initiatives, such as using certified palm oil from Roundtable on Sustainable Palm Oil (RSPO) members, are likely to gain a competitive edge by appealing to environmentally and ethically conscious consumers. In addition, the increasing demand for healthier oils opens up opportunities for product innovation in categories such as cold-pressed oils, non-GMO oils, and omega-3 enriched oils. As consumers become more aware of the health risks associated with trans fats and excessive saturated fat consumption, there is growing interest in oils that offer functional health benefits, such as lowering cholesterol or supporting heart health. Manufacturers that focus on product differentiation through health and wellness claims are well-positioned to capitalize on this trend.

COOKING OILS AND FATS MARKET REPORT COVERAGE:

Cooking Oils and Fats Market Segmentation - By Product Type

• Vegetable Oils

• Animal Fats

• Butter

• Margarine

• Others

The Vegetable Oils segment holds the largest share in the market, accounting for 65% of the total market value. This dominance is driven by the widespread use of vegetable oils such as palm oil, soybean oil, sunflower oil, and olive oil in both household and commercial food preparation. Palm oil is the most consumed vegetable oil, particularly in the Asia-Pacific region, due to its versatility, affordability, and stability at high temperatures. The increasing demand for plant-based and healthier alternatives to animal fats has further strengthened the growth of the vegetable oils segment.

Cooking Oils and Fats Market Segmentation - By Application

• Household

• Commercial (Hotels, Restaurants, Food Manufacturers)

The Commercial segment represents a significant portion of the market, with fast-growing demand from hotels, restaurants, and food manufacturers. Commercial establishments require large quantities of oils and fats for frying, baking, and food processing. This segment is expected to continue growing, driven by the expansion of the food service industry and the rise of global fast-food chains.

Cooking Oils and Fats Market Segmentation - By Distribution Channel

• Supermarkets/Hypermarkets

• Convenience Stores

• Online Retail

• Others

Supermarkets/Hypermarkets are the leading distribution channels for cooking oils and fats, contributing to 45% of total sales. The availability of a wide variety of oils and fats, coupled with promotional discounts, makes these outlets a popular choice among consumers. However, online retail is gaining rapid traction, with consumers increasingly preferring the convenience of home delivery and the broader range of options available online.

Cooking Oils and Fats Market Segmentation - Regional Segmentation

• North America

• Europe

• Asia-Pacific

• South America

• Middle East and Africa

Asia-Pacific dominates the market, accounting for over 35% of the global market share. The region's dominance is attributed to the high consumption levels of cooking oils and fats in countries such as China, India, and Indonesia. The growing population, rising disposable incomes, and increasing demand for processed and convenience foods are key factors driving the market in Asia-Pacific. Additionally, the region is a major producer of key oils such as palm oil and soybean oil, further contributing to its leadership position in the market.

COVID-19 Impact Analysis on Cooking Oils and Fats Market

The COVID-19 pandemic had a mixed impact on the Global Cooking Oils and Fats Market. On the one hand, the disruption of global supply chains, lockdowns, and the closure of restaurants and food service establishments led to a temporary decline in demand for cooking oils and fats in the commercial sector. However, the increased demand for cooking oils and fats in households, as consumers turned to home cooking during lockdowns, offset some of these losses. The pandemic also accelerated the shift to online retail channels, as consumers preferred the convenience and safety of home delivery. Post-pandemic, the market is expected to recover, with a renewed focus on product innovation and sustainability.

Latest Trends/Developments

The latest trends in the Global Cooking Oils and Fats Market include the rising popularity of cold-pressed oils and organic oils that retain their natural nutrients and antioxidants. Additionally, the growing consumer preference for plant-based oils and fats is driving the development of new products that cater to health-conscious consumers. Sustainability is also a key focus, with manufacturers exploring eco-friendly packaging and sustainable sourcing practices, particularly in the palm oil sector.

Key Players

1. Wilmar International Limited

2. Cargill, Incorporated

3. Archer Daniels Midland Company

4. Unilever PLC

5. Bunge Limited

6. Associated British Foods PLC

7. Conagra Brands, Inc.

8. Richardson International Limited

9. Mewah International Inc.

10. Ruchi Soya Industries Limited