Fatty Acids Market

Market Overview

The global fatty acids market size was valued at USD 27.44 billion in 2023. It is estimated to reach USD 42.38 billion by 2032, growing at a CAGR of 4.95% during the forecast period (2024–2032). In recent years, with the surging environmental concerns, there has been a rise in bio-based products that have negligible negative environmental impact, thereby driving the demand for fatty acids worldwide. Additionally, these fatty acids are extensively utilized in the formulation of nutraceuticals and dietary supplements, and the growth of this industry is estimated to create opportunities for the global fatty acid market expansion.

Fatty acids are essential compounds primarily derived from fats and oils. They are the building blocks of lipids and play vital roles in numerous biological functions, including being a primary energy source for the body. Structurally, fatty acids consist of long hydrocarbon chains that can be saturated (holding no double bonds) or unsaturated (holding one or more double bonds). Depending on their structure and origin, they can vary in length and molecular configuration.

In addition to being fundamental components in our dietary intake, fatty acids are crucial in formulating various products, ranging from personal care items to industrial lubricants. The importance of these substances in promoting and preserving optimal health has been extensively acknowledged and investigated, particularly in specific categories such as omega-3 and omega-6 fatty acids.

Highlights

• Animal Source dominates the source segment.
• Oil dominates the form segment.
• Household & industrial cleaning dominate the application segment.
• North America is the highest shareholder in the global market.

Market Dynamics

Fatty Acids Market Drivers

Rising Demand for Bio-Based Products

The growing environmental awareness and stringent regulations regarding carbon emissions are significantly driving the demand for bio-based products, including fatty acids. Consumers and industries are increasingly opting for bio-based products due to their sustainability and lower environmental impact. According to the European Bioplastics Association, the global production capacity of bio-based plastics, which use fatty acids as a primary component, is expected to surge from around 2.11 million tonnes in 2020 to approximately 6.3 million tonnes by 2026.

This shift towards bio-based products is largely driven by government policies encouraging the use of renewable resources. For instance, the European Union's Bioeconomy Strategy aims to replace fossil-based products with renewable biological resources, fostering a substantial increase in the use of fatty acids. Furthermore, major companies are investing heavily in bio-based product development. BASF, a leading chemical company, has committed to expanding its portfolio of bio-based products, anticipating a growing market for these sustainable alternatives. This trend is expected to continue, driving the growth of the global fatty acids market significantly.

Fatty Acids Market Restraint

Volatility in Raw Material Prices

The global fatty acids market faces significant restraint owing to the volatility in raw material prices. Fatty acids are primarily derived from natural sources such as palm oil, soybean oil, and animal fats. The prices of these raw materials are highly susceptible to fluctuations due to various factors, including weather conditions, geopolitical tensions, and changes in agricultural policies.

For instance, the price of palm oil, which constitutes a major share of the raw materials for fatty acids, saw a sharp increase of over 40% in 2020 due to supply chain disruptions caused by the COVID-19 pandemic and adverse weather conditions in major producing countries like Indonesia and Malaysia. Such volatility in raw material prices poses a challenge for manufacturers, as it directly impacts their production costs and profit margins. Moreover, the increasing focus on sustainable and ethical sourcing further complicates the supply chain, potentially leading to higher costs. This price instability makes it difficult for companies to plan long-term investments and could hinder the overall growth of the fatty acids market.

Fatty Acids Market Opportunities

Growing Application in Nutraceuticals and Dietary Supplements

The expanding application of fatty acids in nutraceuticals and dietary supplements presents a significant opportunity for market growth. Omega-3 and Omega-6 fatty acids, in particular, are gaining popularity owing to their numerous health benefits, including improving heart health, reducing inflammation, and supporting brain function. The global nutraceuticals market was valued at USD 382.51 billion in 2020 and is projected to reach USD 722.49 billion by 2027, growing at a CAGR of 8.3%. This robust growth is driven by the surging consumer health consciousness and a growing aging population.

For instance, in the United States, over 77% of adults reported consuming dietary supplements in 2020, up from 65% in 2009. The rising prevalence of chronic diseases like cardiovascular diseases and diabetes is also contributing to the increased consumption of omega-fatty acids. Companies are increasingly investing in research and development to innovate and launch new products containing fatty acids. BASF, for example, has developed a range of omega-3 fatty acid supplements that cater to different health needs. This trend is expected to create lucrative opportunities for the fatty acids market in the nutraceutical and dietary supplements sector.

Regional Analysis

Based on region, the global market is bifurcated into North America, Europe, Asia-Pacific, Latin America, and the Middle East and Africa. 

North America Dominates the Global Market

North America is the most significant global market shareholder and is expected to expand substantially during the forecast period. This growth is primarily driven by the high demand for personal care products and dietary supplements. The United States, in particular, is a major consumer of omega-3 and omega-6 fatty acids, which are widely recognized for their health benefits. According to the Council for Responsible Nutrition, over 77% of American adults reported consuming dietary supplements in 2020, with omega-3 fatty acids being one of the most popular categories. This high consumption is attributed to the growing awareness of the benefits of fatty acids in improving heart health, reducing inflammation, and supporting brain function.

The personal care and cosmetics industry in North America is also a significant driver for the fatty acids market. The region is home to several leading cosmetic brands like Estée Lauder, Procter & Gamble, and Johnson & Johnson, which incorporate fatty acids into their products for their emollient and moisturizing properties. The U.S. beauty and personal care market was valued at approximately USD 93.5 billion in 2020 and is anticipated to reach USD 116.2 billion by 2025, growing at a CAGR of 4.4%. Additionally, the surging trend towards natural and organic products is boosting the demand for fatty acids derived from natural sources like coconut oil and palm oil. Consumers in North America are increasingly seeking clean beauty products, prompting manufacturers to use more bio-based ingredients. For instance, Unilever has committed to ensuring that 100% of its plastic packaging will be fully reusable, recyclable, or compostable by 2025, reflecting a broader industry shift towards sustainability that includes the increased use of bio-based fatty acids.

Europe is a prominent market for fatty acids, driven by stringent environmental regulations and a robust focus on sustainability. The European Union's policies, such as the Bioeconomy Strategy, promote the use of renewable biological resources, significantly boosting the demand for bio-based fatty acids. For instance, the EU aims to increase the share of bio-based products in the market to 25% by 2030, fostering substantial growth in the fatty acids sector.

The region also sees a high demand for personal care and cosmetic products, with consumers preferring natural and organic ingredients. The European cosmetics market was valued at approximately €76.7 billion in 2020, with a growing trend towards clean beauty products. Companies like L'Oréal and Unilever are increasingly incorporating bio-based fatty acids into their product lines to meet consumer preferences. Additionally, the European dietary supplement market is expanding and is driven by increasing health consciousness. Omega-3 fatty acid supplements are particularly popular, with the market projected to grow at a CAGR of 6.2% from 2021 to 2026. This growing demand for nutraceuticals further propels the fatty acids market in Europe, making it a key region for industry growth.

Segmental Analysis

The global fatty acids market share is segmented based on source, form, category, and application.

Based on source, the global fatty acids market is segmented into animal source and plant sources.

The animal-based segment dominates the global market and is expected to grow substantially over the forecast period. Animal-derived fatty acids, predominantly sourced from meat, dairy products, and fish, are crucial to the global fatty acids market. Fish oils, especially, are rich in omega-3 fatty acids, including EPA and DHA, which are celebrated for their numerous health benefits. These benefits encompass cardiovascular health improvement and inflammation reduction. Animal-derived fatty acids are integral to traditional diets, offering essential nutrients necessary for various physiological functions. In addition to omega-3s, these fatty acids provide vital saturated fats and monounsaturated fats that support cellular health and energy levels. The demand for these fats remains robust due to their established health benefits and nutritional importance, reinforcing their significance in both dietary and supplement markets worldwide.

Based on form, the global fatty acids market is fragmented into oil, capsules, syrup, powder, and others.

The oil form segment is the highest contributor to the market and is expected to grow significantly over the forecast period. Oil remains the most traditional and widely accepted form of fatty acids due to its broad versatility and ease of use. Predominantly sourced from fish and plant-based options such as flaxseed and chia, fatty acid oils are integral in both culinary and industrial applications. These oils are prized for their rich content of essential fatty acids, including omega-3 and omega-6, which contribute to various health benefits, like improved cardiovascular function and reduced inflammation. In the food industry, they are utilized in cooking and as ingredients in processed foods, while in industrial applications, they are used in the production of biodiesel and as additives in cosmetics and pharmaceuticals. Their adaptability and nutritional value maintain their significant role in the global fatty acids market.

Based on category, the global market can be bifurcated into saturated and unsaturated.

The unsaturated-based segment owns the highest market share and is expected to grow substantially over the forecast period. Unsaturated fatty acids, frequently hailed as "heart-healthy" fats, are chiefly derived from plant oils, seeds, nuts, and fatty fish. Their molecular structure, characterized by one or more double bonds, introduces kinks that prevent the fatty acids from packing closely together, resulting in their liquid state at room temperature. These fatty acids are categorized into monounsaturated (MUFA) and polyunsaturated (PUFA) types, each offering distinct health benefits. MUFAs, found in olive oil and avocados, and PUFAs, present in fish and flaxseeds, are known for their ability to lower LDL cholesterol levels and reduce the risk of cardiovascular diseases. Their growing popularity and health benefits drive demand in the global fatty acids market, influencing both consumer choices and market trends.

Based on application, the global market is fragmented into household & industrial cleaning, food and beverages, pharmaceuticals and nutraceuticals, personal care and cosmetics, industrial, and others.

The household & industrial cleaning segment dominates the global market and is predicted to grow substantially over the forecast period. The household and industrial cleaning end-user segment in the Global Fatty Acids Market plays a crucial role due to the significant demand for fatty acids in various cleaning products. Fatty acids, derived from natural sources like vegetable oils, are integral to formulating surfactants and emulsifiers used in detergents, soaps, and industrial cleaners. In household cleaning, these acids enhance the effectiveness of products by improving their ability to dissolve grease and grime. In industrial settings, they are used in high-performance cleaners for machinery and surfaces, contributing to efficient maintenance and sanitation. The segment is driven by the rising demand for eco-friendly and biodegradable cleaning solutions, aligning with global trends towards sustainable and green chemistry. This growth is further supported by increased awareness of hygiene and environmental concerns.

Recent Developments

• May 2024- MegaFood, a company that is accredited as a B Corporation and is a member of 1% for the Planet, has announced the release of Omega 3-6-9. This product is a plant-based complex that contains a distinctive combination of essential fatty acids, including 3-6-9, as well as 600 mg of Omega-3. It is designed to promote the health of the heart, brain, vision, and joints.
• July 2024- Datuk Chan Foong Hin, the Deputy Minister of Plantation and Commodities, officially inaugurated Kuala Lumpur Kepong Bhd's (KL:KLK) new high-purity fatty acids and glycerin plant in Zhangjiagang, Suzhou, situated in the Jiangsu province of China. This expansion has increased the facility's annual processing capacity to 500,000 tonnes.