The Margarine and Shortening Market is estimated to be valued at US$ 15.75 Bn in 2023 and is expected to exhibit a CAGR of 1.5% over the forecast period 2023 – 2030, as highlighted in a new report published by Coherent Market Insights.
Margarine and shortening are used as substitutes for butter in baking and cooking applications. Margarine contains a high proportion of plant-based fats and oils such as soybean oil, canola oil, olive oil and spreads them evenly inside an emulsion of water and milk or milk derivatives. Margarine and shortening are cheaper alternatives to butter and offer similar taste and texture. They are also rich in vitamins and minerals and have lower cholesterol as compared to butter.
Market key trends:
One of the major trends driving growth of the margarine and shortening market is rising demand for plant-based and PHO-free products. Consumers are increasingly preferring plant-based and clean label ingredients in their daily diet due to rising health concerns. As a result, many manufacturers are focusing on developing margarine and shortening products from plant-based sources such as soybean oil, canola oil, olive oil etc. without the use of partially hydrogenated oils (PHOs). For instance, Unilever rebranded its Becel brand margarine as plant-based to cater to growing vegan demographics. In addition, demand is also increasing from the foodservice industry for PHO-free alternatives owing to their associated health risks. This rising preference for natural and healthy substitutes is expected to support demand for margarine and shortening over the forecast period.
- Threat of new entrants: Low barriers to entry make the threat of new entrants moderate. Bargaining power of buyers: Large retailers and foodservice operators can leverage their scale to negotiate lower prices from suppliers.
- Bargaining power of suppliers: Major global suppliers have significant influence over prices due to supply constraints and increasing input costs.
- Threat of new substitutes: Rising availability of plant-based spreads pose a threat.
- Competitive rivalry: Intense competition between key global players keeps prices and margins low.
- Strengths: Established brands and distribution networks. Innovation in plant-based products.
- Weaknesses: Vulnerability to fluctuations in commodity prices. High advertising and promotional expenses to compete.
- Opportunities: Growth in plant-based products due to health and sustainability trends. Emerging markets offer promising growth potential.
- Threats: Stringent government regulations on ingredients and labeling. Changing consumer preferences towards natural and clean-label products.
The Global Margarine and Shortening Market Demand is expected to witness high growth, exhibiting CAGR of 1.5% over the forecast period, due to increasing demand for plant-based alternatives. The US market currently dominates margarine and shortening sales, benefiting from high consumption levels and new product innovations. The Asia Pacific region is anticipated to grow at the fastest pace in the margarine and shortening market supported by rapid urbanization, rising living standards, and growing health consciousness in major countries like China and India.
Key regional contributors include China, Southeast Asian countries and India supported by their huge populations and increasing westernization. North America is a lucrative margarine and shortening market led by the US due to strong consumption base and focus on better-for-you products.
Key players operating in the margarine and shortening market are Unilever, Conagra Brands, Bunge Limited, Wilmar International Ltd., Upfield Holdings BV, Cargill, Incorporated, Archer Daniels Midland Company (ADM), Fuji Oil Co., Ltd. ,Richardson International Limited, Dairy Farmers of America, AAK AB, NMGK Group, Puratos Group, Kerry Group, Vandemoortele. Major players are focusing on innovations, expansion in emerging countries and strategic acquisitions to strengthen their market presence.
1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it