The global specialty fats & oils market is projected to grow at a CAGR of 6.5% during the forecast period (2020 - 2025).

  • High-income countries have experienced a growth in the production and consumption of ultra-processed food, mainly bakery products, such as pastries, bread, cakes, and cookies.
  • Shortenings and specialty oils, such as cake oils are increasingly used to enhance the product performance and ensure higher consumer acceptance. These factors have accelerated the growth of this segment.
  • Asia-Pacific is one of the major markets for specialty fats and oils. The demand for specialty oils and fats in the region is likely to remain concentrated in China and India, owing to a large consumer base and application in the countries.



Key Market Trends

Manufacturers Replacing Cocoa Butter with Cocoa Butter Equivalents

The cocoa production has always been fluctuating and it is a costly ingredient. Hence, the confectioners are using alternative ingredients to substitute cocoa butter in order to maintain profit margins. Earlier, cocoa butter was preferred over cocoa butter equivalent (CBE) as a fat source in chocolate products, but in the coming years the balance is projected to shift in favor of CBEs. Annual growth in CBE demand is currently estimated to be at 10%, while for chocolate it is only 3-4%. Reasons for the recent interest in CBEs include its 30-40% reduction in cost, as compared to cocoa butter, its sustainability, and the flexibility of the product itself. These specialty fats are also predominantly used to produce compound coatings used in bakery and confectionary products, where the coating forms 10% to 30% of the total weight of the enrobed products.

Asia-Pacific is the Fastest Growing Market

As chocolate has begun to be used for a wider range of applications, including bread, ice cream, and cookies, there has been an increasing demand for highly functional specialty oils and fats for chocolate manufacturing. China ranks second, with about 14% of the total world production of fats and oils in 2015, and is a major producer of soybean and canola oils. In the region, in China, palm oil is widely being used to replace hydrogenated oils, as the base specialty oil in processed food, bakery, and confectionery. Confectioners are increasingly substituting cocoa butter with CBEs derived from a mix of shea stearin and palm mid fraction, due to reduced cost, improved functionality, and sustainability. Around 90-95% of exported shea butter is used in the production of cocoa butter equivalents in China. Thereby, increasing the growth of market studied in the region.

Competitive Landscape

The global specialty fats and oil market are highly competitive, and the major players have used various strategies, such as new product launches, expansions, agreements, joint ventures, partnerships, acquisitions, and others, to increase their footprints in the market studied. The major players in the food industry are investing in R&D activities to expand their specialty fat and oil product portfolios and attract more consumers by providing innovative products.

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