Soy Derivatives Market Size, Share & COVID-19 Impact Analysis, By Type (Soy Meal, Soy Oil, Soy Milk, Soy Flour, and Others), Application (Animal Feed [Poultry, Swine, and Others], Food [Baked Goods, Meat Alternatives, and Others], and Others), and Regional Forecast, 2021-2028

The global soy derivatives market size was USD 204.11 billion in 2020. The global impact of COVID-19 has been unprecedented, with soy derivatives witnessing a slightly negative effect on supply-chain across all regions amid the pandemic. Based on our analysis, the global market exhibited a lower growth of 4.4% in 2020 compared to the average year-on-year growth during 2017-2019. The market is projected to grow from USD 216.42 billion in 2021 to USD 344.05 billion in 2028 at a CAGR of 6.8% in the 2021-2028 period. The increase in CAGR is attributable to this market's demand and growth, returning to pre-pandemic levels once the pandemic is over.

The demand for soy derivatives is expected to continue growing in the coming years, owing to various factors. The growth in population figures, rising consumption of meat and soy-based health products, and growing demand for biodiesel as a fuel alternative are anticipated to drive the global soy derivatives industry in the forthcoming years.

Disturbances in Supply Chain Management amid COVID-19 to Hamper Performance

The global market is festering due to the novel coronavirus. Labor shortages and logistic limitations have become top trepidations for companies. However, with the high level of COVID-19 cases in key producing economies, the soybean industry continues to operate, with farmers in Brazil, Argentina, and the United States crushing record amounts of soybeans. Nevertheless, logistical bottlenecks have limited the crushing, transport, and export of the crop. But, farmers in these countries stored their production to sell it later when market conditions recovered, given the reduced crop demand and impact of the lockdown. Presently, the situation has improved with the decreasing number of new confirmed cases. As the pandemic is well controlled and transportation restrictions are lifted in recent months, the production of several soy derivatives will increase in the coming period.

The massive closure of industries and the logistical bottlenecks have also affected livestock farmers and, in turn, soybean producers since meat production represents the major purchaser for this industry. But the rising demand for plant-based protein sources can support the steady growth of the industry. Moreover, the current U.S.-China trade war has been an essential factor in reshaping the soybean trade flows globally since the United States represents around 40% of the total soybean exports to China. This conflict could lead to unexpected impacts on the market.

LATEST TRENDS

Fortification of Products is a Prominent Trend

Traditional soy derivatives have nutritional properties and some health benefits. The increasing interest of companies in the fortification and addition of functional ingredients can encourage consumers to opt for the product. Fortified products provide benefits beyond basic nutrition and may play a vital role in reducing or minimizing the risk of certain diseases. The rising number of fortified products in the retail market is expected to drive the global market. For instance, in August 2018, South Korea-based Seoul Dairy Corporation announced Achimae Soymilk's launch, a soymilk drink fortified with chickpea protein.

DRIVING FACTORS

Increasing Livestock Production to Spur Product Demand

Soybean plays a significant role as an important plant-based protein source to increase the nutrition of the community because, in addition to being safe for health, it is also relatively cheap compared to the source of animal protein. Soybean is one of the few complete protein plant-based foods with nine essential amino acids. For this reason, it has become a crucial source of human and animal protein. Approx. 70-80% of its cultivation is used for animal feed and the remaining is destined for direct human consumption. The demand for soybeans is presently tied to global meat consumption and is likely to grow in the upcoming years, owing to the rising livestock production across the globe.

Surging Soybean Production and Rising Expenditure on R&D to Drive Growth

China is one of the leading soybean consumers globally, and the country imports most of it from North America. Hence, the increasing focus of the government on technical assistance to surge these yields in China can help meet the demand for soy while reducing the land pressure in other parts of the world. Though, with millions of small farmers involved, improving production practices will be a significant challenge. But, several initiatives taken by the Chinese government can help increase the area under soybean cultivation. For instance, in February 2019, the State Council released its policy document, which included a plan for soybean farming revitalization. Under the policy management, large planters and rural organizations have been making efforts to shift soybean cultivation. The rising production of this crop can drive the global market in the near future.

The investment in research and development activities positively influences the capability of a manufacturer's production technology and its quality. The technological improvement in the process to enhance efficiency enables manufacturers to expand their business capabilities. Furthermore, the rising expenditure on technology for soybean seed breeding and planting to improve productivity and yields of soybean oil and protein is likely to support the market's steady growth.

RESTRAINING FACTORS

High Presence of Unsaturated Fatty Acids in Soy Derivatives to Impede Performance

The demand for soy derivatives will continue to increase over the coming decades. But, a decrease in the agricultural land and declining soil quality due to the use of harmful fertilizers is expected to restrain the market growth in the forthcoming years. Moreover, the high presence of unsaturated fatty acids in soy that are dangerous to human health is predicted to hamper the market growth. The rising usage of biomass and other sugar derivatives such as sucrose for bioplastic manufacturing can also inhibit the soy derivatives market growth.

SEGMENTATION

By Type Analysis

Soy Meal Segment to Hold Major Share Backed by Increasing Demand from Animal Feed Industry

On the basis of type, the market is classified into soy meal, soy oil, soy milk, soy flour, and others. The soy meal segment held a dominant soy derivatives market share in 2020. As the global demand for dairy products and cheap meat has grown, the demand for soy meal as a high-protein and affordable livestock feed has also surged in the last few years. The rising demand for meat and increased livestock production across the globe can support the steady growth of the segment.

Soy oil is utilized as an ingredient in many baked and fried products and as margarine in many processed and derived products. Furthermore, the growth of the lactose intolerant population and rising demand for plant-based milk are predicted to positively impact the growth of the soy milk segment. Companies operating this market are embarking on the base expansion of their soy protein facility to fulfill the rising demand for plant-based protein. For instance, in November 2020, Archer Daniels Midland Company expanded its non-GMO soy protein production capacity at its facility in the Netherlands. The increasing popularity of plant-based protein is expected to augment the demand and sales of soy protein.

By Application Analysis

Food Segment to Grow at the Fastest Pace in Near Future

Based on application, the global market has been categorized into animal feed, food, and others. Soybeans have been grown for many years and most of them are consumed indirectly. The vast majority of soy is milled into high-protein soymeal, which has been mostly utilized in animal feed preparation as it is considered to be one of the cheapest and sustainable sources of proteins. The food segment is predicted to grow at the highest CAGR in the forthcoming years. The rising utilization of soy oil for cooking and other derivatives of soybean, such as soy flour and emulsifier lecithin for the manufacturing of processed foods, including chocolate, ice cream, and baked goods, is predicted to support the growth of the segment.

Lately, soybean oil has also been used to produce biodiesel, although this occupies a small proportion of the total soy production. But, with the developing science and novel technology, soybean derivatives applications will be increased for industrial applications in the upcoming years.

REGIONAL INSIGHTS

Soybeans have been consumed for thousands of years in Asia, but soy consumption has expanded dramatically within the food and feed industry over the last few decades. The increasing demand for poultry and other meat, coupled with the rapid urbanization, surging household income, and the rising expenditure on plant-based food products, has supported the demand for the product in Asia Pacific. Presently, the Asia Pacific market holds a significant share and is anticipated to grow at a CAGR of 6.87% during the forecast period.

The rising product acceptability, intense competition, and increasing consumer base have pushed operating companies to strive for competitive advantages through novelties with respect to the delivery of service and product offerings. The local market players are trying to strengthen their footprints in the Asian market by expanding their product portfolios. For instance, in February 2021, Indian health beverage company Life Health Foods launched a new brand, So Good. Under this new brand, the company offers dairy-free plant-based milk, including healthy and nutritious soy drinks.

North America is likely to hold the second-largest share in the market. The increasing consumer shift towards a vegan or vegetarian diet, the rising number of lactose-intolerant people, and continuous innovation in the industry are anticipated to support the steady growth of the American market. The presence of key players, the rising area under soybean cultivation, and easy availability of raw material, i.e. soybean within the region, are likely to positively impact the overall growth scenario.

The market in Europe is anticipated to grow at the highest CAGR in the upcoming years. The demand for derivatives of soybean, especially soy meal grew due to the ban on processed animal proteins in animal feed, such as bone meal and meat, due to the bovine spongiform encephalopathy outbreak. It has increased further as fishmeal or another potential animal feed is persistently used in fish farming. Furthermore, the upsurging support for biofuels production is also a factor in soy consumption in the region.

KEY INDUSTRY PLAYERS

Focusing on Joint Ventures with Relevant Stakeholders to Help Companies Expand Their Global Reach

The global market is moderately consolidated with the presence of a few prominent players. The increasing popularity of plant-based products and the rising demand for animal feed have significantly led to a surge in the demand for these derivatives. Companies, such as Archer Daniels Midland Company, Bunge Limited, and Cargill Incorporated, are embarking on mergers and acquisitions and joint ventures with relevant stakeholders for product marketing and portfolio broadening.

For instance, in July 2018, Cargill Incorporated and Archer Daniels Midland Company formally launched SoyVen, their new joint venture to provide soybean oil and meal for Egyptian consumers. Similarly, in August 2018, Archer Daniels Midland Company signed an agreement to purchase Algar Agro's assets, including two oilseed processing plants in Brazil.

LIST OF KEY COMPANIES PROFILED:

• Archer Daniels Midland Company (Illinois, United States)


• Cargill, Incorporated (Minnesota, United States)


• CHS Inc. (Minnesota, United States)


• Bunge Limited (Missouri, United States)


• Louis Dreyfus Company B.V. (Netherlands)


• Wilmar International Ltd. (Singapore)


• AG Processing Inc. (Nebraska, United States)


• DuPont Nutrition and Health (Delaware, United States)


• Noble Group (Hong Kong)


• Tyson Foods (Arkansas, United States)

KEY INDUSTRY DEVELOPMENTS:

• In February 2021, Mitake Food Industry, one of the leading manufacturers of rice flour in Japan, launched a new product named Rice Tempura Flour in the U.S. This product is made of ingredients such as emulsifiers, soy, modified starch, and an alternative to wheat flour.


• In February 2021, Life Health Foods Pvt. Ltd. launched a new brand known as So Good Protein+, plant-based dairy-free milk. The product has 25   percent more protein than regular soy milk.  The product is also suitable for people who are lactose intolerant and are also diet conscious.


• In April 2021, Nestle launched a dairy-free plant version of Milo in the Asian market. Thus product replaces milk with other products such as almond and soy. Apart from Milo, the company also plans to launch plant-based Nescafe lattes in the market.

REPORT COVERAGE

The market research report includes qualitative and quantitative insights into the industry. It also offers a detailed analysis of the market size and growth rate for all possible segments. Various key insights presented in the report include an overview of related markets, competitive landscape, recent industry developments such as mergers & acquisitions, the regulatory scenario in critical countries, and key industry trends.

Report Scope & Segmentation