Cooking Oil Market

Market Overview

The global cooking oil market size was valued at USD 1,54,961 million in 2021. It is expected to reach USD 2,55,210 million by 2030, growing at a CAGR of 5.7% during the forecast period (2022-2030).

Baking, frying, and other cooking methods need cooking oil, sometimes called edible or vegetable oil, primarily derived from oilseeds. Flavorings and dishes that don't need to be heated up, such as salad and bread dips, can also be prepared using cooking oil. Most cooking oils are liquefiable at room temperature; however, some saturated fat-containing oils, like palm, coconut, and palm kernel oil, remain solid at even slightly lower temperatures. The majority of the common edible oils are vegetable oils, such as rapeseed oil, corn oil, sesame oil, peanut oil, olive oil, palm oil, camellia oil, canola oil, sunflower seed oil, soybean oil, linseed oil (soma oil), grape seed oil, walnut oil, and peony seed oil, among others.

The influence of advertisements on consumers is a significant factor affecting the market's growth and is a primary driver of brand and cooking oil type switching among customers. Additionally, market participants and stakeholders have been actively engaged in creating innovative culinary packaging, which significantly impacts the market's growth in the near term. In addition, consumers may be enticed to purchase cooking oils to sample new flavors if new varieties are available.

Market Dynamics

Global Cooking Oil Market Drivers

The Upsurge of Fast and Processed Food Combined with the Demand for Organic Cooking Oil

In developing nations, the pattern of food consumption is changing dramatically along with improving living standards. According to studies, people's intake of processed foods has increased as their disposable income has grown. This is because processed foods need less preparation time, which is advantageous for those who lead busy lives. A further factor driving the need for cooking oil in developing countries is the rising presence of quick-service restaurants, fast-casual eateries, and cloud kitchens. Quick service restaurants like McDonald's, Burger King, KFC, Taco Bell, and Wendy's are just a few examples.

These fast-food franchises are growing in emerging nations, increasing the demand for processed food globally. And so, there is a growing need for cooking oil in developing countries due to increased fast food and processed food consumption. Additionally, due to public awareness of the benefits of chemical-free products, people worldwide are embracing chemical-free or organic products. Because they are produced in exceptional quantities by a variety of animals, plants, and other species through normal metabolic processes, and because they help to preserve the stability of the aroma and original flavor in food, organic cooking oils are also catching consumers' attention.

The market for edible organic oil is driven by a growing awareness of the health benefits of organic products and the oil's effectiveness in improving customers' energy levels due to its positive effects on heart health. Additionally, organic oil has a lot of benefits because it keeps its freshness for a more extended period, transfers more energy, and has more nutrients that are both essential and advantageous. As a result, this oil effectively enhances the consumer's mental and physical health, fueling the market's demand for cooking oils.

Global Cooking Oil Market Restraints

Counterfeiting of Cooking Oil

The production or distribution of items under someone else's name without that person's consent is considered counterfeiting, a felony. In the global market for cooking oil, this technique is widespread. In addition, flagrant theft and adulteration are destabilizing the world market for cooking oil. The primary oil fraud in North America is olive oil.

Due to the environmental conditions, Xylella fastidiosa infection, and bacterium pandemic in the regions that produce olive oil, there is a lack of olive oil. To satisfy demand and minimize manufacturing costs, manufacturers in the U.S. have been blending their olive oil with less expensive oils like low-quality sunflower oil and canola oil.

Global Cooking Oil Market Opportunities

A new procedure called fortification involves incorporating micronutrients into cooking oil to increase its nutritional value. According to FSSAI, fortifying cooking oil can assist a person in consuming 25% to 30% more vitamin D and A than is necessary. A vital vitamin A and D shortage in children is another reason why this fortification began in India.

Thus, fortified cooking is in high demand worldwide. International organizations like the Melinda Gates Foundation, UNICEF, and WHO have also realized the value of fortifying foods and cooking oils to provide the necessary nutrients. According to the Food Fortification Initiative, some 27 nations have previously approved oil fortification.

Regional Analysis

The region-wise segmentation of the global cooking oil market includes North America, Europe, Asia Pacific, and LAMEA.

The Asia Pacific and Europe will Dominate the Regional Market

The Asia Pacific is forecasted to command the regional market while expanding at a CAGR of 6.2%. Due to increased disposable income and a rising standard of living, which are expected to rise soon, India is seeing a surge in the production and demand for food processing and food services, which is the primary driver of increasing cooking oil demand in the nation after population growth.

Furthermore, different regions of China use different amounts of cooking oil. For example, soybean oil is a standard cooking oil in the northern part of China, including Heilongjiang's provinces. While rapeseed oil consumption is high in the middle and western regions, peanut oil is the most widely used oil in the southern regions. These regional consumption variations result from the country's various climatic conditions, oil seed production, topography, socioeconomic considerations, and cultural traditions. The consumption pattern of cooking oil often diversifies as per capita income rises.

Europe will probably expand at a CAGR of 4.6% and hold USD 39,992 million. Due to the high level of olive production in the region, the Mediterranean region consumes more olive oil than countries in northern Europe. Additionally, excellent olive oil and extra virgin olive oil are utilized in the majority of European cuisine. They are drizzled over fresh salads and cooked vegetables and meats, respectively.

Because they are more readily available and less expensive than olive oil, rapeseed oil, and palm oil are the two cooking oils most Europeans use for deep frying and high-flame cooking, followed by olive oil. This is because most Europeans do not fry their food in olive oil. Instead, they use other cooking oils like palm oil and rapeseed oil. Therefore, the industry offers organic olive oil tremendous prospects. As a result of Germany's high olive oil consumption, the region is seeing an increase in the demand for olive cooking oil.

Segmental Analysis

The global cooking oil market is classified across product type, end-user, distribution channel, and region.

Per the product type, the categories include palm oil, soy oil, sunflower oil, peanut oil, olive oil, rapeseed oil, and other cooking oils.

The palm oil section is envisioned to have the largest share, growing at a CAGR of 5.2%. Antioxidants, carotenes, and Vitamin E are abundant in palm oil. The consumption of palm cooking oil is fueled by the fact that it benefits persons with cancer, Alzheimer's, arthritis, and atherosclerosis. Additionally, the development of crude palm oil is encouraged by the region's growing population and shrinking amount of arable land to meet local consumption demands. Additionally, palm oil is in high demand since it gives products longer shelf life, remains semi-solid at room temperature, and is resistant to oxidation.

The soy oil section will hold the second-largest share. Due to its high polyunsaturated fatty acids and low concentration of saturated fats, which are known to promote heart health, soy cooking oil is the second most popular cooking oil in the world. Omega 3 is also included, which lowers the risk of cardiovascular illnesses. Since it may be used for roasting, baking, and frying, soybean oil's versatility is one of its main selling points. The demand for soy oils is also fueled by the 25mcg of vitamin K in one spoon of soy oil, which helps reduce blood clotting and plays a crucial part in regulating bone metabolism.

Per the end-user, the categories include residential, commercial, and food processors.

The residential section will likely have the highest shareholding, expanding at a CAGR of 6%. The popularity of healthy oils and foods is growing as customers become more knowledgeable about the many types of oils and their benefits and drawbacks. Rising consumer health consciousness and rising disposable income are driving a shift in consumer preference toward well-known market brands, causing the expansion of the cooking oil market in the residential sector. In addition, the home market is seeing an increase in demand for organic cooking oil due to growing consumer awareness of organic products.

The food processor section will hold the second-largest share. Any firms or institutions that prepare meals outside of the residential or home are considered to be in the food service industry. Because more people are eating fast food, quick service restaurants like KFC, McDonald's, Taco Bell, and many more see an increase in revenue. Additionally, the recent trend in the food service industry is home delivery of meals, encouraging customers to place more orders, and assisting the sector in raising the demand for food regularly.

Per the distribution channel, the categories include supermarkets/hypermarkets, independent retail stores, business-to-business, and online sales channels.

The business-to-business section will likely have the highest shareholding, expanding at a CAGR of 5.3%. The growing popularity of outdoor eating among consumers is the primary driver boosting business-to-business sales of cooking oil. Additionally, as consumers' living standards and disposable income improve, more food is consumed in restaurants, coffee shops, and other food service industries, driving up demand for cooking oil. Cooking oil is also used in the preparation of foods and other foods like ready-to-eat snacks and other foods that are currently quite popular.

The supermarket/hypermarket section will hold the second-largest share. Due to the availability of a wide variety of consumer items under one roof, abundant parking, and convenient operating hours, hypermarkets and supermarkets are becoming increasingly popular. Additionally, rising urbanization, an increase in the population of the working class, and competitive pricing are increasing the appeal of supermarkets and hypermarkets in both developed and emerging nations. Additionally, these shops offer a variety of brands within a product category, such as cooking oil, giving clients more options to purchase cooking oil following their needs.

Recent Developments

• In 2022, an innovative 7.5-year strategic commercial partnership was made public by Archer-Daniels-Midland Company to work closely together on initiatives that will significantly increase the use of regenerative agriculture throughout their respective North American supply chains. This strategic alliance between two multinational corporations with solid carbon reduction ambitions is anticipated to cover up to 2 million acres by 2030.