ANIMAL FATS AND OILS MARKET ANALYSIS

The global animal fats and oils market size was valued at US$ 279.30 billion in 2023 and is expected to reach US$ 475.58 billion by 2030, growing at a compound annual growth rate (CAGR) of 7.9% from 2023 to 2030. Animal and marine oils and fats are water-insoluble, hydrophobic substances of animal origin. They are a major source of energy and essential fatty acids for humans and animals. Animal fats and oils are used in a variety of applications, including food, feed, oleochemicals, and biodiesel.

The growth of the animal fats and oils market is driven by the increasing demand for animal-based food products, such as meat, poultry, and dairy products. The rising demand for these products is due to the increasing population and the growing affluence of consumers in developing countries. Additionally, the growing demand for animal fats and oils in the oleochemicals and biodiesel industries is also driving the market growth.

Animal Fats and Oils Market Regional Insights

• Asia Pacific: Asia Pacific is the largest market for animal fats and oils, accounting for a market share of 40% in 2022. The growth of the market in this region is attributed to the increasing demand for animal-based food products, such as meat, poultry, and dairy products. The rising demand for these products is due to the increasing population and the growing affluence of consumers in developing countries. Additionally, the growing demand for animal fats and oils in the oleochemicals and biodiesel industries is also driving the market growth in Asia Pacific.
• North America: North America is the second-largest market for animal fats and oils, accounting for a market share of 25% in 2022. The growth of the market in this region is attributed to the increasing demand for animal-based food products, such as meat, poultry, and dairy products. The rising demand for these products is due to the increasing population and the growing affluence of consumers in the United States and Canada. Additionally, the growing demand for animal fats and oils in the oleochemicals and biodiesel industries is also driving the market growth in North America.
• Europe: Europe is the third-largest market for animal fats and oils, accounting for a market share of 20% in 2022. The growth of the market in this region is attributed to the increasing demand for animal-based food products, such as meat, poultry, and dairy products. The rising demand for these products is due to the increasing population and the growing affluence of consumers in the European Union. Additionally, the growing demand for animal fats and oils in the oleochemicals and biodiesel industries is also driving the market growth in Europe. 

Figure 1. Global Animal Fats and Oils Market Share (%), by Region, 2023

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Animal Fats and Oils Market Drivers:

• Increasing Demand for Animal-Based Products: The rising global population and changing dietary preferences have led to an increased demand for animal-based products such as meat, dairy, and seafood. Animal fats and oils are essential ingredients in food processing, including cooking oils, margarine, and bakery products, which drives the market growth. For instance, Go!Drop fat replacer, Go!Mega3 Omega-3 algae oil, and Go!Great Cultivated Animal Fat are set to launch in 2023. The company has recently formed a partnership with the international distributor Cargill which will bring investment, co-development, and marketing support to make the fats more widely available.
• Growth in the Food Processing Industry: The food processing industry is expanding, driven by changing consumer lifestyles and the demand for processed and convenience foods. Animal fats and oils find applications in various food products, including snacks, confectionery, sauces, and dressings, as they enhance taste, texture, and shelf life. For instance, as per India Brand Equity Foundation, the Indian food processing market size reached US$ 307.2 trillion in 2022 and is expected to reach US$ 547.3 trillion by 2028, exhibiting a growth rate (CAGR) of 9.5% during 2023-28.
• Industrial Applications: Animal fats and oils are utilized in various non-food industrial applications. They are used in the production of biodiesel as a renewable energy source, lubricants, soaps, candles, and pharmaceuticals. The growth of these industries contributes to the demand for animal fats and oils.
• Biofuel and Renewable Energy Initiatives: The focus on sustainable and renewable energy sources has led to the increased use of animal fats and oils as feedstocks for biodiesel production. Government regulations and incentives promoting the use of biofuels further drive the demand for animal fats and oils.
   

Animal Fats and Oils Market Opportunities:

• Health and Wellness Trends: With increasing awareness of health and wellness, there is a growing demand for healthier food products. Manufacturers can leverage this opportunity by developing animal fats and oils with lower saturated fat content or by promoting the health benefits of specific types of fats, such as omega-3 fatty acids found in fish oils.
• Expansion of Organic and Sustainable Products: Consumers are showing a preference for organic and sustainably sourced products. Companies can tap into this trend by offering animal fats and oils that are produced from organic or sustainable sources. Certifications such as organic, non-GMO, or sustainably sourced can add value and attract environmentally conscious consumers.
• Clean Label and Natural Ingredients: The demand for clean labels and natural ingredients is increasing as consumers seek transparency and avoid artificial additives. Animal fats and oils can be positioned as natural ingredients that enhance the taste and texture of food products, attracting consumers looking for clean-label options.
• Emerging Markets: The animal fats and oils market presents significant growth potential in emerging markets, especially in Asia Pacific, Latin America, and Africa. Rising disposable incomes, urbanization, and changing dietary patterns in these regions provide opportunities for market expansion and new product development.

Animal Fats and Oils Market Trends:

• Shift towards Healthy Fats: Consumers are increasingly conscious of their dietary choices and are opting for healthier fats. This has led to a shift towards fats and oils with better nutritional profiles, such as those high in monounsaturated and polyunsaturated fats. Manufacturers are responding to this trend by offering products with reduced saturated fat content and promoting the health benefits of specific fats, such as omega-3 fatty acids.
• Clean Label and Natural Ingredients: There is a growing demand for clean label products with minimal artificial additives and natural ingredients. Consumers are looking for transparency and recognizable ingredients in their food products. This trend is driving the demand for animal fats and oils that are minimally processed and derived from sustainable and ethically sourced animal by-products.
• Sustainable Sourcing and Production: Environmental concerns are driving the demand for sustainably sourced animal fats and oils. Consumers are looking for products that have minimal impact on the environment and support animal welfare. Companies are implementing sustainable sourcing practices, such as using by-products from the meat industry and supporting initiatives like palm oil sustainability certifications.
• Regulatory Landscape: Regulatory bodies are implementing stricter guidelines and regulations related to labeling, quality, and sustainability of fats and oils. Compliance with these regulations, such as nutritional labeling requirements and adherence to sustainable sourcing practices, is becoming increasingly important for industry players.

Animal Fats and Oils Market Restraints:

• Health Concerns: The health concerns associated with the consumption of saturated fats have led to a shift in consumer preferences towards healthier alternatives. Some studies have linked high consumption of animal fats and oils to increased risks of cardiovascular diseases and obesity. This has prompted consumers to seek out low-fat and plant-based alternatives, impacting the demand for animal fats and oils.
• Competition from Plant-Based Alternatives: The growing popularity of plant-based diets has resulted in increased competition from plant-based alternatives to animal fats and oils. Manufacturers are developing plant-based oils derived from sources like coconut, avocado, and olive oil to cater to the needs of consumers who prefer vegetarian or vegan options. This competition poses a challenge for the animal fats and oils market
• Price Volatility: Animal fats and oils prices can be subject to volatility due to various factors such as changes in feed costs, weather conditions affecting crop yields, and market demand. Fluctuating prices can impact the profitability of businesses in the animal fats and oils market, making it challenging to plan and

Analyst view: The global animal fats and oils market has strong growth potential over the next five years. The market is driven by increasing demand for animal fats and oils in various end-use industries like food processing, cosmetics and biofuel production. Asia Pacific dominates the global market currently owing to large consumption of animal fats and oils in countries like China and India. However, North America is expected to grow at the fastest pace backed by robust demand from food chains and restaurants in the US. Potential health issues relating to saturated fats content act as a major restraint on the market growth. However, increasing adoption of pasture-raised animal farming techniques may help alleviate some health concerns in the long run. Opportunities lie in advancing biodiesel production technology that utilizes animal fats as feedstock in bigger capacities. Innovations in extracting and processing methods can boost market potential as well. Developing new applications in cosmetics and nutraceuticals industry can further drive usage of animal fats and oils globally. Fluctuating supply of raw materials due to uncertain weather conditions poses a challenge. Stringent regulations on animal byproducts in some regions also impact market dynamics. Focusing on sustainable sourcing practices and developing cost-effective genetically modified alternatives are some strategies players are implementing to address concerns. Looking ahead, market players should concentrate on leveraging new technologies to develop

Recent Developments

New product launches

• Plant-Based Animal Fat Substitutes: In response to the growing demand for plant-based alternatives, some companies have introduced plant-based animal fat substitutes. These products aim to replicate the functional properties and taste of animal fats while being derived from plant sources. Such innovations cater to consumers seeking vegetarian or vegan options.
• Omega-3 Enriched Animal Fats and Oils: Omega-3 fatty acids are known for their health benefits, and companies have started incorporating omega-3 fatty acids into animal fats and oils to enhance their nutritional profile. This allows consumers to benefit from the positive attributes of omega-3 fatty acids while using animal fats and oils in their food preparations.
• Specialty Animal Fats and Oils: Some companies have launched specialty animal fats and oils that cater to specific applications or target niche markets. These specialty products may possess unique characteristics, such as high smoke points for frying, improved oxidative stability for longer shelf life, or specific sensory attributes for particular culinary applications.

Acquisition and partnerships

• In 2022, Cargill acquired AB Agri's animal nutrition business for US$ 1.4 billion. This acquisition gave Cargill a leading position in the animal fats and oils market, as well as access to AB Agri's expertise in animal nutrition.
• In 2021, Bunge acquired Aurora Oils for US$ 1.2 billion. This acquisition gave Bunge a leading position in the Canadian canola oil market, as well as access to Aurora Oils' expertise in canola processing.
• In 2020, IMCD and AAK formed a joint venture to create a new global leader in specialty fats and oils. This joint venture brought together IMCD's global distribution network and AAK's expertise in specialty fats and oils.

Figure 2. Global Animal Fats and Oils Market Share (%), by Source, 2023

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Top Companies in Animal Fats and Oils Market

• Bunge Limited
• Archer Daniels Midland Company
• Cargill, Incorporated
• Wilmar International Limited
• Tyson Foods, Inc.
• JBS S.A.
• Darling Ingredients Inc.
• IOI Corporation Berhad
• Ventura Foods, LLC
• BRF S.A.
• Ajinomoto Co., Inc.
• Premium Vegetable Oils Sdn Bhd
• AAK AB
• Conagra Brands, Inc.
• Richardson International Limited

*Definition: Animal fats and oils refer to hydrophobic substances derived from animal sources that are insoluble in water. They are obtained from various animals, including livestock such as cattle, poultry, and pigs, as well as marine animals. Animal fats and oils serve as a significant source of energy and essential fatty acids for both humans and animals. They find wide-ranging applications in the food industry for cooking oils, margarine, confectionery, and other food products.