Fatty Acid Market Size, Share & Industry Analysis, By Type (Saturated and Unsaturated), By Application (Soaps and Detergents, Intermediates, Plastics, and Others), and Regional Forecast, 2024-2032

The global fatty acid market size was valued at USD 16.18 billion in 2023. The market is projected to grow from USD 17.28 billion in 2024 to USD 28.31 billion by 2032 at a CAGR of 6.4% during the 2024-2032 forecast period.

Fatty acids are carboxylic acids derived from living feedstock such as vegetables or animals. They are made of structural components: lipids, fats, oils of 4 to 28 unbranched and several carbons. These fats can be classified based on the number of carbons and a double bond. Fatty acids can be produced by hydrogenation, water-based hydrolysis, or alcohol-based hydrolysis processes. It serves as a crucial raw material to produce several downstream derivatives including elastomers, toiletry, biocides, softeners, and wax for diversified industries, which is anticipated to continue growing over a couple of years.

The COVID-19 pandemic had a significant impact on the market, particularly in 2020 and early 2021. Lockdowns and restrictions led to disruptions in the supply chain, affecting the production and distribution of the product. This included delays in raw material supply, transportation issues, and workforce shortages. Moreover, the market observed a fluctuating demand across different sectors. Industries such as food & beverage experienced varied demand patterns due to changing consumer behaviors and lockdown restrictions. However, there was an increased demand in the pharmaceutical and personal care industries due to a heightened focus on health and hygiene.

Fatty Acid Market Trends

Sustainability and Biotechnology Innovations is a Prominent Market Trend

Biotechnology is revolutionizing the production of fatty acids through microbial fermentation and genetic engineering. These biotechnological advancements allow for more efficient and eco-friendly production, particularly those derived from algae and other microorganisms. The shift toward biotechnological production methods offers both environmental and economic benefits. These methods reduce greenhouse gas emissions, lower water usage, and decrease the reliance on chemical inputs.

In addition, many companies in the market are implementing sustainability initiatives to reduce their carbon footprint. This includes optimizing production processes to lower energy consumption, improving waste management practices, and adopting renewable energy sources.

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Fatty Acid Market Growth Factors

Rising Consumption in Personal Care and Cosmetics Industry to Drive Market Growth

Fatty acids are used in the production of soaps, lotions, and other personal care products and play a crucial role in their formulation due to their beneficial properties. They are versatile ingredients contributing to the efficacy, texture, and appeal of a wide range of skincare, haircare, and beauty products. As consumer spending on personal care and beauty products continues to rise globally, the market is expanding correspondingly. Emerging economies, in particular, are witnessing rapid urbanization and increasing disposable incomes, driving the demand for higher-quality personal care products that incorporate fatty acids. Furthermore, with the growing consumer awareness and preference for natural and sustainable products, fats derived from natural sources such as vegetable oils are in high demand. Natural fat is perceived as a safer and more environmentally friendly alternative to synthetic ingredients, further boosting their use in cosmetics.

RESTRAINING FACTORS

Dynamic Prices of Raw Materials May Impede Market Growth

The prices of raw materials such as palm oil, coconut oil, soybean oil, and tallow vary widely due to factors, such as weather conditions affecting crop yields, geopolitical tensions impacting trade, and changes in agricultural policies or subsidies. These fluctuations directly influence production costs for manufacturers. When raw material prices rise sharply, manufacturers may face higher production expenses, which can decrease profit margins unless these increased costs can be passed on to consumers through higher product prices. Sharp oscillation in the prices of raw materials may lead to price uncertainty for both consumers and suppliers, potentially hampering the fatty acid market growth.

Fatty Acid Market Segmentation Analysis

By Type Analysis

Unsaturated Segment Dominated Owing to Rising Consumer Awareness and Dietary Shifts

Based on type, the market is classified into saturated and unsaturated.

The unsaturated segment occupied the highest market share in 2023 and is projected to witness a significant growth rate during the study period. Increasing consumer awareness about the health benefits of unsaturated fatty acids, such as improving heart health, reducing inflammation, and supporting brain function, is driving demand. Consumers are actively seeking healthier dietary supplements, including those rich in omega-3 and omega-6 fatty acids. Furthermore, there is a shift toward plant-based diets and functional foods. Unsaturated fat is prominent in plant-based oils, nuts, seeds, and fish.

The saturated segment is anticipated to register moderate growth during the forecast period. The increasing consumption of processed and convenience foods, especially in developing countries, is driving the demand for saturated fat. These fats are often found in products such as snacks, baked goods, and ready-to-eat meals. Moreover, saturated fat is extensively used in various industrial applications, including the production of soaps, detergents, lubricants, and cosmetics. They provide stability and desirable physical properties to these products.

By Application Analysis

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Soaps and Detergents Segment Led Due to Rising Demand for Personal Care Products

By application, the market is segregated into soaps and detergents, intermediates, plastics, and others.

The soaps and detergents segment registered the largest fatty acid market share in 2023. Increasing awareness about personal hygiene and the growing middle-class population, particularly in developing regions, are driving the demand for soaps and detergents. This, in turn, boosts the demand for fatty acids, which are key ingredients in these products. Beyond household cleaning, they are also used in industrial cleaning applications.

The intermediates segment is estimated to observe notable expansion in the coming years. The growth of the segment is driven by increasing demand across diverse industries, including chemicals, polymers, cosmetics, pharmaceuticals, food and beverages, and agriculture. These products serve as intermediates in the production of a wide range of chemicals, including surfactants, lubricants, and plasticizers. The expanding chemical industry is driving demand for these intermediates.

REGIONAL INSIGHTS

Based on region, the market is classified into Europe, North America, Asia Pacific, the Middle East & Africa, and Latin America.

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Asia Pacific witnessed the dominant market share in 2023 and is estimated to become the fastest-growing region in the future. The demand is associated with the rapid growth in the food & beverages industry in the region as these products are used as fortification agents in applications such as clear drinks. The expanding food & beverage industry in the region, driven by a growing population and increasing demand for processed and packaged foods, is boosting the demand for fats used as food additives and preservatives.

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North America is expanding considerably owing to factors, such as health and wellness trends, industrial and consumer demand, technological advancements, regulatory support, and a growing preference for natural and sustainable products. Consumers in the U.S. are increasingly seeking natural and organic products, driving the demand for fat derived from natural sources such as plant oils and animal fats.

Europe is slated to depict significant growth during the forecast period owing to the stringent regulations regarding practicing sustainability and the growing demand for plant-based products. Moreover, the aging population in Europe is increasing the demand for health supplements and pharmaceuticals that can help manage age-related conditions, many of which utilize these products.

The availability of raw materials in Brazil, Argentina, and other Latin countries is expected to drive the market growth in the region. It has a strong agricultural sector, producing a variety of crops such as soybeans, palm oil, and other oilseeds that are sources of fat. This local availability of raw materials supports the production and consumption of the product in the region.

The Middle East & Africa market is poised to observe tremendous growth in the coming years. The rapid increase in industrialization in the region is driving the growth of the fatty acid market. These products are used in surfactant manufacturing which is further utilized in the industries.

KEY INDUSTRY PLAYERS

Prominent Companies to Leverage Organic and Inorganic Business Growth Strategies to Retain Their Dominance

With respect to the competitive landscape, the market shows the presence of emerging and established players. Evonik Industries, Emery Oleochemicals, Godrej Industries, BASF SE, and Procter & Gamble are some of the key players in this market. Geographical expansion is one of the major strategies adopted by various international and domestic players in the market. Various players are focused on improving their global reach and thus maintaining a competitive edge over competitors. The companies are also focusing on expanding their product portfolio for long-term growth.

List of Top Fatty Acid Companies:

• Evonik Industries (Germany)


• Emery Oleochemicals (Malaysia)


• Godrej Industries (India)


• BASF SE (Germany)


• Procter & Gamble (U.S.)


• Cargill Incorporated (U.S.)


• Oleon N.V. (Belgium)


• Wilmar International (Singapore)


• Twin Rivers Technologies (U.S.)


• Croda Industrial Chemicals (U.K.)

KEY INDUSTRY DEVELOPMENTS:

• May 2024: Emery Oleochemicals partnered with LEHVOSS Functional Fluids to exclusively distribute its products, such as esters, polyols, and carbon/fatty acids, throughout Europe. This partnership is expected to strengthen Emery Oleochemicals’ position in the European market.


• October 2023: BASF SE launched Emulgade Verde 10 MS to expand its polyglyceryl fatty acid ester technology for natural formulations and support current market developments. The new versatile O/W emulsifier offers sustainability benefits and proven high performance.

REPORT COVERAGE

The report provides a detailed analysis of the market. It focuses on key aspects, such as leading companies, types, compositions used to produce these products, and end-use industries of the product. Besides this, it offers insights into the market and current industry trends and highlights key industry developments. In addition to the factors mentioned above, the report encompasses several factors contributing to the market's growth.

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Report Scope & Segmentation