Report Description

Forecast Period

2024-2028

Market Size (2022)

USD 210.3 Billion

CAGR (2023-2028)

4.8%

Fastest Growing Segment

Organic

Largest Market

North America

 

Market Overview

Global Edible Oils Market was valued at USD 210.3 Billion in 2022 and is anticipated to project robust growth in the forecast period with a CAGR of 4.8% through 2028. The market for edible oil is anticipated to increase as a result of rising demand for organic edible oil and the food industry's quick development and expansion. Moreover, the growing use of maize oil in various industries is anticipated to open up a wide range of new business prospects. Because it contains the least amount of fat (6%) of any other type of edible oil, canola oil is a more affordable and healthier substitute for olive oil. Edible oil has a number of advantages, which ultimately lead to a rise in demand for it, which in turn propels market expansion. Edible oil is also a cooking oil that is obtained from the fat of animals, plants or microorganisms. Edible oils are liquid and safe to consume at room temperature. Among the many edible oils are sunflower, rice brown, ghee, olive, mustard, and groundnut. Edible oils comprise trace amounts of antioxidants, which helps prevent autoxidation. Antioxidants are also used to increase the shelf life of edible oils.

The demand for palm oil is rising right now as a result of its distinctive uses, including its smooth and creamy texture, excellent cooking qualities, and lack of odor, all of which are predicted to accelerate the market's expansion. The globe utilizes palm oil more than any other vegetable oil due to its lower cost than other oils, according to a report by "The Conversation" that was published in 2021. Ten times more palm oil per hectare may be produced by the Africanal oil palm than by soybean oil. The demand for fast food is rising globally due to a variety of causes, including changing lifestyles, an increase in the proportion of working women, and food preferences. Fast service and customer satisfaction are fast food's primary goals. Through the formation of a crust, the absorption of fat, and the addition of savory flavours and aromas, they are cooked and served utilizing energy-efficient cooking techniques. In every country in the globe, frying is a popular way to make fast meals. Because it has the right chemical make-up and produces tasty food, oil like edible oil is used to fry food. Consequently, it raises consumer demand for edible oil and is predicted to propel market expansion.

Key Market Drivers

Health and Nutrition Trends

One of the primary drivers of the edible oil market is the ever-evolving health and nutrition trends. Consumers are increasingly concerned about the health impacts of their dietary choices, leading to shifts in the types of oils they prefer. Health-conscious consumers are driving demand for oils perceived as healthier, such as olive oil, avocado oil, and coconut oil, which are rich in monounsaturated and polyunsaturated fats and may have various health benefits. In contrast, oils high in saturated fats, like palm oil, face greater scrutiny due to their potential adverse health effects. As nutritional science advances, these trends will continue to shape consumer preferences and drive innovation in the industry.  Cultural factors and dietary preferences significantly impact the edible oil market. Different regions and cultures have their traditional cooking oils, which play a vital role in their culinary heritage. For example, palm oil is a staple in Southeast Asian cuisine, while olive oil is prevalent in Mediterranean cooking. These cultural influences drive demand for specific oils and create distinct market dynamics. As globalization continues, an increased exchange of culinary ideas and preferences will likely further shape the edible oil landscape.

Economic, Sustainability and Environmental Concerns Factors

Economic factors, including income levels and price sensitivity, have a substantial impact on the edible oil market. In lower-income regions, consumers may opt for more affordable vegetable oils, such as soybean or sunflower oil, while higher-income consumers may be willing to pay a premium for premium oils like extra virgin olive oil or organic varieties. Fluctuations in commodity prices, currency exchange rates, and income levels can influence both production and consumption patterns in the edible oil market. Sustainability and environmental concerns are increasingly important drivers in the edible oil market. The production of certain oils, notably palm oil, has been associated with deforestation, habitat destruction, and greenhouse gas emissions. In response to mounting environmental pressures, consumers, governments, and corporations are demanding more sustainable sourcing and production practices. This has led to the rise of certifications like RSPO (Roundtable on Sustainable Palm Oil) and increased interest in alternative, more environmentally friendly oils like avocado and algae oil.

Government Policies and Regulations

Government policies and regulations play a pivotal role in shaping the edible oil market. These policies can affect various aspects, including import/export tariffs, labeling requirements, food safety standards, and support for domestic production. For example, import tariffs on foreign oils can influence the competitiveness of domestic producers. Additionally, regulations regarding trans fats and labeling transparency have a direct impact on consumer choices and the composition of edible oil products. Geopolitical events and supply chain disruptions can have significant consequences for the edible oil market. Political instability in oil-producing regions can lead to supply disruptions, resulting in price volatility. Additionally, trade disputes and sanctions can impact the flow of edible oils between countries. The COVID-19 pandemic underscored the vulnerability of global supply chains, highlighting the importance of diversification and resilience in the edible oil industry.

Technological Advancements and Innovation

Technological advancements and innovation are driving the development of new edible oils and production methods. Genetic modification and biotechnology are being used to create oils with specific characteristics, such as high oleic acid content or resistance to pests. Advancements in extraction and refining technologies have also improved the efficiency and quality of edible oil production. These innovations not only expand the range of available oils but also enhance the sustainability and cost-effectiveness of production.

Demographic Changes and Urbanization

Demographic changes, such as population growth and urbanization, influence the edible oil market. As populations grow and more people migrate to urban areas, there is an increased demand for processed and convenience foods, which often contain edible oils as ingredients. Additionally, changing demographics can affect household sizes and cooking habits, impacting the types and quantities of edible oils consumed. Consumer awareness and education play a crucial role in shaping the edible oil market. As consumers become more informed about the health and environmental implications of their food choices, they are more likely to make conscious decisions regarding the oils they use. Companies that invest in transparent labeling and consumer education efforts are better positioned to capture the loyalty of informed consumers.

Market Competition and Branding

Market competition and branding strategies are essential drivers in the edible oil industry. Leading brands invest in marketing campaigns, product differentiation, and packaging innovations to capture market share. As consumer preferences evolve, successful brands adapt to meet changing demands and introduce new products that align with current trends. The global edible oil market is influenced by a complex interplay of factors that range from health and nutrition trends to economic, environmental, and geopolitical considerations. Understanding these major drivers is crucial for stakeholders in the industry, including producers, retailers, and policymakers, as they seek to navigate an ever-evolving landscape. As consumers continue to prioritize health, sustainability, and transparency in their food choices, the edible oil market will undoubtedly undergo further transformations in the years to come.