Europe Specialty Fats & Oils Market Size, Share & Industry Analysis, By Type (Specialty Fats {Cocoa Butter Alternatives, Dairy Fat Replacers, Margarine and Shortenings, and Others} and Specialty Oils {Coconut Oil, Palm Oil, Soybean Oil, Canola Oil, Sunflower Oil, and Others), By Application (Food Industry {Chocolate & Confectionery, Bakery, Dairy, and Others} and Non-Food Industry {Cosmetics, Pharmaceuticals, and Others}), and Regional Forecast, 2025-2032

The Europe specialty fats & oils market size was valued at USD 17.00 billion in 2024. The market is projected to grow from USD 17.69 billion in 2025 to USD 23.96 billion by 2032, exhibiting a CAGR of 4.43% during the forecast period. Increasing confectionery product consumption, paired with processed food popularity drives the product demand in the region.

Specialty fats & oils are a category of fats and oils, often formulated to mimic or enhance the properties of traditional fats such as cocoa butter, butter, or milk fats. They are widely used in confectionery, bakery, beverages, dairy products, cosmetics, personal care products, animal feeds, and industrial applications.

Major market players operating in the industry include Gustav Heess, BASF SE, Cargill Inc., Fuji Oil Company, Ltd., and AAK AB. These market players are competing with each other to hold the dominant market share in the upcoming years.

Market Dynamics

Market Drivers

Increasing Adoption of Specialty Fats in Confectioneries to Drive Market Growth

Specialty oils and fats, such as shea butter, kokum kernel, palm kernel, and palm oil, are extensively used to produce cocoa butter alternatives and serve as traditional fat replacers in the confectionery industry. Cocoa butter alternatives, derived from vegetable fats and oils, are a vital ingredient in chocolate and confectionery products. It provides a smooth, creamy, and rich texture that enhances the flavor and overall quality of these products. In addition to its prevalent use in chocolate, cocoa butter alternatives are also commonly found in frozen desserts, coffee creamers, and bakery items. Its incorporation significantly improves the texture and flavor of dairy, bakery, and other food applications. It will significantly impact the consumption of specialty fats and oils across the region.

Europe has been increasing its imports of natural specialty oils and fats due to emerging demand for them from the food processing and manufacturing industry. The significant size of the European confectionery and bakery sector is increasingly utilizing different kinds of plant-based butters such as shea butter. Increasing innovation utilizing plant-based fats & oils presents further opportunities for the Europe specialty fats & oils market growth.

Emerging Bakery and Coffee Industry to Drive Demand for Specialty Oils & Fats Market

The cake and coffee cream industry has contributed considerably to the growing demand for specialty oils, making it a crucial ingredient in the commercial food sector. Palm kernel oil is one of the specialty oils, containing exclusive fatty acid composition, texture-improving properties, and stability, making it a crucial element in bakery products, dessert creams, whipped toppings, and coffee creams.

As the global bakery and café culture expands, driven by escalating urbanization, shifting consumer preferences, and the growing popularity of ready-to-eat and convenience foods, the demand for creams and emulsified fats has surged. Cake creams, including buttercreams, whipped toppings, and frostings, require specialty fats that provide stability and aeration. Palm kernel oil is broadly used in these applications due to its semi-solid stability at room temperature, which allows easy whipping, shaping, and textural uniformity. These properties make it an ideal fat substitute for cake manufacturers, especially in tropical environments, where preserving product integrity is difficult due to high temperatures and humidity.

Market Restraints

Health Issues Associated with the Product to Hamper Market Growth

A key factor hindering the market’s growth is the rising prevalence of health ailments. Palm oil derivatives, such as palm kernel oil and palm-derived fats, are known to be high in saturated fat, which raises Low-Density Lipoprotein (LDL), or “bad” cholesterol, and potentially stimulates the risk of obesity, cardiovascular diseases, hypertension, cancer, and others. As a result, the increasing prevalence of health concerns restricts the intake of palm-based specialty oils & fats. Palm kernel oil comprises a high proportion of saturated fats, particularly lauric acid, myristic acid, and palmitic acid. Excessive intake of saturated fats has been linked to cardiovascular diseases, obesity, and elevated cholesterol levels, raising concerns about their inclusion in processed foods. Therefore, the adverse health effects associated with the product are expected to negatively impact the industry's growth in the upcoming years.

Market Opportunities

Adoption of Specialty Fats & Oils in Vegan Industry is Likely to Drive Industry Growth

The emerging plant-based food industry poses lucrative opportunities in the specialty fats and oils market, as they are made from plant sources. The global shift toward vegetarianism, flexitarian diets, and sustainability-conscious eating habits has driven a surge in demand for meat substitutes that mimic the texture and mouthfeel of real meat. These substitutes can be used in vegan burger patties, plant-based sausages, meatballs, and alternative seafood products to create flavor retention and fat marbling that closely resembles real meat. Therefore, vegan food manufacturers seek alternative fats and innovative formulations. Specialty oils can expand into plant-based meat products, nutraceuticals, functional foods, baby formula, confectionery innovations, ready-to-eat meals, and ethnic cuisine applications. This will influence the sales of specialty fats and oils across the region in the near future.

Specialty oils have established themselves as a key ingredient in dairy alternatives, ice creams, coffee creamers, baked goods, and processed foods due to their functional properties and versatility. However, beyond these recognized food applications, specialty oils and fats present significant opportunities for expansion into emerging food industry verticals that are witnessing rapid growth due to changing consumer preferences, technological advancements, and emerging vegan trends across the world.

Europe Specialty Fats & Oils Market Trends

New Product Launches to Create Market Development Opportunities

Since consumers are willing to try novel products under the confectionery category, companies are coming up with new options in their product portfolios. To develop innovative products, companies are seeking sustainable and healthy ingredients. As specialty fats such as cocoa butter alternatives are made from palm kernel oil, shea butter, and others, they are considered sustainable and healthy ingredients. These innovations may create more opportunities for industry growth. For instance, in July 2024, Blommer Chocolate, one of the leading confectionery product manufacturers launched its new product line – Elevate. Elevate is a new cocoa butter equivalent product line, developed by Blommer R&D experts that surpass standard confectionery options by delivering a delightful texture and rich flavor.

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Impact of Tariffs

Recently, the newly elected president of the U.S., Donald Trump, imposed a range of tariff barriers, including a baseline of 10%, worldwide. The new tariffs pose a potential disruption in the supply of specialty oils and fats. These tariffs would target essential oils such as soy oil, canola oil, sunflower oil, and many others. Although the primary impact of the new tariffs would be felt in the U.S., they could significantly affect the European oils and fats market. According to the USDA, the EU accounted for approximately 13% of the U.S. soy exports.

The tariffs were mainly targeted at China, but the U.S. imposed 20% reciprocal tariffs on the EU and a 10% baseline tariff on U.K. products. The 20% tariffs on EU goods, especially food products such as cheese, olive oil, fruits, and alcoholic beverages, may impact exports to the U.S. Europe is highly dependent on importing oilseeds, especially soybeans, from the U.S. The U.S. tariff policy on vegetable oils could trigger a chain reaction of supply disruption. The vegetable oil supply chain in the European Union is already under pressure due to geopolitical factors, notably the war in Ukraine. The war between Russia and Ukraine has disrupted the sunflower oil trade within the EU. The U.S. tariff on vegetable oil may further increase the pressure on the vegetable oil supply chain across the EU. As a result, specialty oils and fats manufacturers in the region may face even greater strain in securing raw materials, including sunflower and soybean oil, at competitive prices.

Segmentation Analysis

By Type

Increasing Popularity of Specialty Fats in Confectionery Application to Drive Segment Growth

Based on type, the market has been segmented into specialty fats and specialty oils. The specialty fats are further segmented into cocoa butter alternatives, dairy fat replacers, margarine and shortenings, and others such as kokum butter and mango butter. The specialty oils are further categorized into coconut oil, palm oil, soybean oil, canola oil, sunflower oil, and others.

The specialty oils segment holds the largest share of the global market in terms of value and volume, owing to the wide availability of raw materials such as palm oil, palm kernel oil, sunflower oil, and canola oil, to produce specialty oils. 

Specialty fats are exhibiting a strong growth trajectory over the upcoming years. Among specialty fats, cocoa butter alternatives are the fastest-growing segment. Increasing adoption of CBAs such as cocoa butter equivalents, cocoa butter substitutes, and cocoa butter replacers in different applications, including coffee creamer, ice cream fats, confectioneries, chocolate products, and skin care products, are significantly contributing to the fast growth during the forecast period. Additionally, specialty fats are often used in processed food to meet the requirements of the natural, plant-based, and clean-label product trend. Thus, the segment is anticipated to grow at the highest rate over the upcoming years.

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By Application

Wide Usage of the Products in the Food Industry to Hold the Largest Market Proportion

Based on application, the market is segmented into the food industry and the non-food industry. The food industry is further segmented into chocolate & confectionery, bakery, dairy, and others such as ice cream and infant formula. The non-food industry is further categorized into cosmetics, pharmaceuticals, and others, including biofuel and animal feed.

The food industry application holds the largest share of the global specialty fats & oils market. Owing to its special functionalities to enhance taste, texture, mouthfeel, and nutritional value, specialty oil is significantly adopted in various food applications such as bakery, chocolate, ice cream, and others. Increasing processed food demand, along with emerging consumer trends toward the adoption of natural ingredients, will drive the specialty oils & fats demand from food applications across Europe.

Non-food applications and cosmetics applications are estimated to exhibit the fastest growth scenario during the forecast period. Several cosmetics and personal care companies are developing new products which are utilizing specialty oils & fats to meet emerging market trends. As the cosmetics industry is evolving across the globe, including Europe, the demand for natural ingredients such as specialty oils & fats is anticipated to expand.

Europe Specialty Fats & Oils Market Outlook

Europe

Emerging confectionery, chocolate, bakery, and frozen dessert industries across the world are significantly influencing the demand for sustainable and plant-sourced ingredients. Furthermore, end-users are seeking more innovative, shelf-stable, and healthy food products, especially in the confectionery and ice cream sectors. The rising demand encourages key industry players to search for various sustainably sourced healthy ingredients, which help to develop novel product options for their consumers. Specialty fats such as cocoa butter alternatives are made from plant-sourced vegetable fats such as coconut, palm, palm kernel, shea nuts, and kokum kernel. The adoption of cocoa butter alternatives not only assists in developing innovative products but also improves the melting rate in frozen desserts and the shelf life of ice cream & confectioneries. Therefore, the adoption of specialty fats in food applications is likely to drive the Europe specialty fats & oils market share. 

Consumers across the region are significantly prioritizing natural, healthy, and clean-label ingredients in food, cosmetics, and personal care products. The functional properties of specialty fats, such as nourishing, moisturizing, and protective qualities, help to enhance skin and hair health and are considered ideal ingredients for producing natural cosmetic and personal care products. This has led to a surge in demand for specialty fats and oils derived from natural sources such as shea butter, cocoa butter, coconut oil, and jojoba oil.

Competitive Landscape

Key Market Players

The Europe specialty fats & oils industry is highly diversified, with several multinational and regional companies operating in the industry.  The prominent players in the market focus on new product launches and base expansion to expand their product lineup and strengthen their regional presence. Gustav Heess, BASF SE, Cargill Inc., Fuji Oil Company, Ltd., and AAK AB. Ltd are among the prominent manufacturers in the market. These manufacturers cater to the evolving needs of consumers, which in turn will help propel market growth in the coming years.  

List of Key Specialty Fats & Oils Companies in Europe

• BASF SE (Germany)
• Cargill, Incorporated (U.S.)
• Gustav Heess (Germany)
• AAK AB (Sweden)
• Fuji Oil Holdings (Japan)
• Musim Mas Group (Singapore)
• Archer-Daniels-Midland Company (U.S.)
• Wilmar International Limited (Singapore)
• Barry Callebaut AG (Belgium)
• Bunge Global SA (U.S.)

Key Industry Developments

• March 2025 — Vandemoortele, a Belgian food group specializing in producing bakery and plant-based food solutions, is in the planning stage to acquire the margarine and spreads business operation in Europe from Bunge Global SA, a leading global agribusiness company. The acquisition will assist the company in strengthening its presence in the European market.
• July 2024 — Fuji Oil Holdings launched Elevate chocolate coatings. The coating product is designed for confectionery industry players. The new products are developed using CBE technology and formulated to integrate with cocoa butter.
• February 2024 — Planet A Foods, a Germany-based startup, recently closed approximately USD 15.42 million in Series A funding. The company specializes in producing cocoa butter alternatives from palm oil and aims to use the funds to expand its geographical reach and improve its cocoa-alternative product manufacturing capacity.
• October 2023 — KTC Edibles Ltd (KTC), a U.K.-based oils and fat supplier, launched Planet Palm – a new range of certified sustainable, traceable, and responsibly sourced palm oil products for bakery and food manufacturers in the U.K. The newly launched Planet Palm Cake Margarine, Planet Palm Pastry Margarine, and Planet Palm Shortening have a Roundtable on Sustainable Palm Oil (RSPO) certificate.
• May 2023 — AAK AB, a Swedish specialty oils and fats manufacturing company, launched a Cocoa Butter Substitute (CBS) compound. The newly launched product is designed to meet the requirements of food manufacturers from the chocolate & confectionery, bakery, dairy, plant-based foods, special nutrition, food service, and personal care sectors.

Report Coverage

The market research report offers qualitative and quantitative insights into the industry. It focuses on significant aspects such as company profiles, competitive landscape, product type, and product application areas. Besides this, it offers insights into the various market trends and highlights vital industry developments. In addition to these mentioned factors, it encompasses several other factors that have contributed to the market growth in recent years.

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Report Scope & Segmentation