Europe Fats and Oil Market - 2025-2032

Europe Fats and Oil Market reached US$ 50.54 billion in 2024 and is expected to reach US$ 64.53 billion by 2032, growing with a CAGR of 3.0% during the forecast period 2025-2032.

The European fats and oils market is experiencing steady growth, driven by increasing demand across various sectors such as food and beverage, personal care and biofuels. European consumers are increasingly favoring natural and organic fats and oils, driven by a growing awareness of health and wellness. This shift is leading to higher demand for products like olive oil and avocado oil, which are perceived as healthier alternatives.

Furthermore, significant trend towards sustainably sourced fats and oils, with consumers and manufacturers prioritizing environmentally friendly and ethically produced ingredients. This includes a focus on reducing deforestation and promoting fair trade practices within the supply chain. Some companies have integrated renewable energy into their operations.

For instance, leading French oil producer Saipol has implemented biomass energy solutions in its oilseed processing plants, reducing fossil fuel dependence. Similarly, Unilever has pledged to achieve net-zero emissions in its supply chain by 2039, including its edible oils division. Germany is emerging as the fastest-growing market for fats and oils in Europe. This growth is driven by a strong emphasis on organic and sustainable products, aligning with consumer preferences for health-conscious and environmentally friendly options.

Dynamics

Rising Demand for Processed and Convenience Foods

The modern European lifestyle, characterized by busy schedules and a preference for convenience, has led to an increased consumption of processed and ready-to-eat foods. Fats and oils are essential components in these products, contributing to texture, flavor and shelf life. According to the European Food Information Council, there has been a notable rise in the consumption of convenience foods across Europe, driven by urbanization and changing dietary habits. This trend directly correlates with the demand for various fats and oils used in food processing.

Manufacturers are responding by developing specialized fats and oils that cater to the needs of the processed food industry. For instance, interesterified fats are being used to improve the functionality and health profile of processed foods, offering alternatives to trans fats. Furthermore, the snack food segment, which heavily relies on fats and oils for production, has seen substantial growth. The European Snacks Association reports a continuous increase in snack consumption, further fueling the demand for fats and oils in the region.

Expansion of the Biofuel Industry

The European Union's commitment to reducing greenhouse gas emissions has led to the promotion of biofuels as a sustainable energy source. Fats and oils, particularly vegetable oils, are key feedstocks in biodiesel production, aligning with the EU's renewable energy targets.

The European Commission's Renewable Energy Directive mandates that by 2030, at least 32% of energy consumption within the EU should come from renewable sources, with a specific focus on the transport sector. This policy has accelerated the demand for biodiesel, subsequently increasing the need for fats and oils used in its production.

Countries like Germany and France are leading biodiesel producers in Europe, utilizing significant quantities of rapeseed oil and other vegetable oils. The Union zur Forderung von Oel- und Proteinpflanzen e.V. (UFOP) reports that in Germany alone, biodiesel production reached approximately 3.2 million tonnes in recent years, with a substantial portion derived from domestically produced rapeseed oil.

Supply Chain Disruptions and Price Volatility

One of the significant restraints in the European fats and oils market is supply chain disruptions and price volatility, which impact both raw material availability and production costs. The market heavily relies on imports of key oils, such as palm oil from Southeast Asia and soybean oil from South America. Trade restrictions, extreme weather events and geopolitical tensions can disrupt supply chains, leading to shortages and price fluctuations.

Additionally, transportation bottlenecks and regulatory changes further contribute to instability in the market. The European Union's deforestation-free supply chain law, effective from 2023, requires traceability for imported oils, increasing compliance costs for producers. Furthermore, rising fuel prices and labor shortages have led to higher logistics expenses, exacerbating price volatility.

Segment Analysis

The Europe fats and oil market is segmented based on source, form, type, application, distribution channel and country.

Crucial Role of Oil & Fats in Bakery Sector

The bakery segment is substantial, reflecting a strong tradition of bread and pastry consumption. The demand for fats and oils is driven by the need for quality ingredients that enhance sensory attributes and prolong product freshness. Recent trends indicate a growing preference for healthier alternatives, including plant-based fats, as consumers become more health-conscious.

Innovations in fat and oil technology are also emerging to meet these demands, allowing manufacturers to offer diverse options tailored for specific bakery applications. This evolving landscape positions the bakery sector as a critical driver of growth within the edible oils and fats market in Europe. The market structure differs substantially throughout Europe. In the UK, the industrial sector prevails, constituting 80% of bread production, whereas in France and Germany, the industrial proportion is lower, approximately 35-40%.

The Netherlands possesses a substantial industrial sector presence at 81%, whereas Spain's industrial market share is at 19%. Approximately 1,000 plant bakeries function throughout Europe, with the largest market shares located in Bulgaria, the Netherlands and the United Kingdom. In contrast, nations such as Turkey and Greece possess rather modest market shares, varying from 1-3%. On average, industrial bakers hold about 45% of the market, while craft bakers account for 55%, according to the latest AIBI figures.

Competitive Landscape

The major European players in the market include Cargill Inc, Archer Daniels Midland Company, Associated British Foods Plc, Kerry Group Plc, Koninklijke DSM N.V., International Flavors & Fragrances Inc., Lallemand Inc., Corbion N.V., Tate & Lyle PLC and Ingredion Inc.,

Regional Analysis

Robust Food and Beverage Industry Demand Fats and Oil Sector in France

France is the largest market for fats and oils in Europe, driven by its robust food and beverage industry, particularly in culinary applications such as bakery, confectionery and gourmet cooking. France has a long-standing culinary tradition, with fats and oils playing an integral role in cooking and food preparation. Olive oil, butter and duck fat are commonly used in traditional French cuisine, contributing to sustained demand. In 2021, olive oil was the most consumed oil, followed by sunflower oil and then rapeseed oil in France.

France is home to a thriving bakery and pastry sector, with croissants, baguettes and pastries being staple products. Estimated over 10 billion baguettes are sold annually in France, necessitating substantial fat and oil inputs. The market is witnessing a shift toward high-quality, nutrient-rich oils like extra virgin olive oil, which is widely consumed due to its health benefits. Of the total consumption of edible fats in France, the consumption of olive oil stands at 101,000 tons, which corresponds to 5%.

By Source

• Vegetable
• Animals

By Form

• Solid
• Liquid

By Type

• Oil
  • Vegetable Oils
  • Palm oil
  • Soybean oil
  • Sunflower oil
  • Rapeseed oil
  • Oilve Oil
  • Other oils
• Fats
  • Butter & margarine
  • Lard
  • Tallow & grease
  • Other fats

By Application

• Food applications
  • Bakery
  • Confectionery
  • Snacks & savory
  • T.E foods/Convenience foods
  • Sauces, spreads and dressings
  • Other foods (incl. meat products)
• Industrial applications
  • Biodiesel
  • Other industrial applications
• Oleochemicals
• Animal Feed

By Distribution Channel

• B2B
• B2C

By Country

• Germany
• UK
• France
• Italy
• Spain
• Rest of Europe

Why Purchase the Report?

• To visualize the Europe fats and oil market segmentation based on source, form, type, application, distribution channel and country.
• Identify commercial opportunities by analyzing trends and co-development.
• Excel data sheet with numerous data points at the fats and oil market level for all segments.
• PDF report consists of a comprehensive analysis after exhaustive qualitative interviews and an in-depth study.
• Product mapping available as excel consisting of key products of all the major players.

The Europe fats and oil market report would provide approximately 84 tables, 75 figures and 210 pages.

Target Audience 2024

• Manufacturers/ Buyers
• Industry Investors/Investment Bankers
• Research Professionals
• Emerging Companies