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The global avocado oil market size was USD 533.53 million in 2020. The market is projected to grow from USD 553.27 million in 2021 to USD 822.29 million in 2028 at a CAGR of 5.82% in the 2021-2028 period. The global impact of COVID-19 has been staggering, with witnessing a positive demand shock across all regions amid the pandemic. Based on our analysis, the global market exhibited a growth of 3.90% in 2020 as compared to the average year-on-year growth during 2017-2019. The rise in CAGR is attributable to this market’s demand and growth, returning to pre-pandemic levels once the pandemic is over.
The major factor behind the increasing use of avocado fruit oil in several industries is the high-income growth rate in developed countries, accompanied by the acceleration of urbanization and the expansion of the upper-middle class. Moreover, the fact that it is the highest-priced oil used in cosmetics and the food industry has proved beneficial to manufacturers who use the product, as it marks their products as quality items. Therefore, major companies are inclined toward incorporating such specialty ingredients in their products. It is one of the fastest-growing food ingredients for health benefits, versatility of use, and nutrition.
Increasing Awareness Regarding Health Benefits of Avocado Oil amid COVID-19 to Lead to Revenue Growth
Even if 2020 has been challenging in many aspects, the sales of avocado oil have been going rather well. For instance, the CEO of Kenya-based brand Origen Group reported that COVID-19 had not impacted the demand for avocado fruit oil. On the contrary, the company had seen it increase by around 10% in 2020. However, companies have witnessed a steep rise in avocado fruit oil costs due to various factors such as raw material scarcity, transportation delays, and firm closure of processing and packaging plants.
Currently, people are recognizing the benefits of living a healthy lifestyle, and this has resulted in the rising demand for the product during COVID-19. The global situation is gradually normalizing as border closures are being lifted. The easing up of the lockdown, which has allowed public mobility, is expected to help recover the market in the following years. However, rising fuel prices have increased transportation costs, thereby impacting oil and other commodity prices.
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Advertising a Green Brand Image
The increasing inclination toward recyclable packaging of oil to maintain environmental sustainability is one of the latest trends in the market. Plastic packaging has attracted attention from many consumers due to plastic waste pollution and the impact of plastic production on the environment. Using less plastic in the packing used for oil helps in recyclability and the reduction of greenhouse gases. The bag-in-box packaging provides environment-friendly solutions to ensure oil remains safe and fresh from filling to end-use. According to the International Life Sciences Institute of India (ILSI), bag-in-box is a cost-effective, high-performance form of edible oil packaging designed to meet the needs of institutional users. It can also be combined with distribution options to meet customer needs. It has a recyclable monomer P.E. structure for bags, glands, and lids.
Rising Focus on Organic Oil Production to Aid Growth
The consumers growing inclination toward healthy food as a pursuit toward good health and wellness has significantly increased the incorporation of organic food products in their daily diets. The easier access to infinite information with the help of the internet has made consumers increasingly aware of their healthier need for food, leading to the increase in demand for organic products.
Organic avocado oil is among the best oils with lower saturated fat content and higher good fat content, and it provides various benefits to people. Therefore, the incorporation of organic oil is increasing in the processed food industry. Moreover, most consumers are ready to pay a little extra for supreme quality products, which encourages processed food manufacturers to incorporate such ingredients. The companies operating in the market continue to enhance their products with certified organic oils, which is predicted to promote the avocado oil market growth. For instance, in April 2020, Nutiva, U.S.-based brand of plant-based organic foods, introduced organic avocado fruit oil in three variants.
Technological Advancement in Product Manufacturing to Drive Market Growth
The product continues to be of interest to the pharmaceutical, food, and personal care industries and is also generating better attention in other areas such as nanotechnology and environmental care. Recently, new supplementary technologies have been applied to improve the extracted product's yield and quality and decrease pollution. These technologies include supercritical fluid extraction, ultrasound-assisted oil extraction, and pressurized fluids. The extensive focus on research and development of better technologies to produce the maximum yield is anticipated to support the steady growth of the global market.
Avocado fruit oil benefits from continued advancements in extraction technology. Improvement in technology impacts the oil when it comes to their health profile and also sets the performance bar higher with high extended shelf life. Over the years, more energy-efficient processes and technologies, leading to higher yields, have been gradually introduced. The growing importance of the (nutritional) quality of the oil and the sustainability aspect of the refining process are new challenges for oil processors. To achieve these new goals, “next-generation” refining process technology must be developed and implemented.
Presence of Alternatives is Expected to Hinder Market Growth
The easy availability and lower price of avocado fruit oil substitutes, such as sunflower oil and olive oil, are expected to restrain the market growth. Moreover, the increasing presence of counterfeit products on supermarket shelves is anticipated to negatively impact the market. For instance, according to the data published by researchers from the University of California (UC), Davis, majority of the product sold in the U.S. is either of low quality, mislabeled, or adulterated with other oils.
Demand for Extra Virgin Oil is Likely to Showcase Significant Growth Due to High Quality of Oil
BY type. the market is classified into extra virgin oil, virgin oil, pure/refined oil, and blend. The pure/refined oil segment held a considerable share of the market in 2020. The cosmetics and personal care industry particularly appreciates the pure/refined oil due to its high vitamin E content, affordability (as it is less expensive than the extra virgin and virgin oil), and emollient properties. Moreover, the current vogue of applying natural oils directly to the skin is likely to positively impact extra virgin oil sales. The demand for extra virgin oil is prominently increasing from the food sector due to the surety of quality. The extensive information available regarding extra virgin avocado fruit oil nutrition benefits is anticipated to drive the segment growth.
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Food and Beverages Segment to Grow at Fastest Pace Owing to Rising Popularity of Gourmet and Specialty Food Products
The food and beverage application of the product is anticipated to grow at the fastest CAGR in the coming years. The rising consumer inclination toward specialty products and increasing focus of the key players on incorporating such ingredients in their processed food items are predicted to support the steady growth of the segment. For instance, General Mills keto-friendly brand launched yogurt, which is high in fat, low in carbs and sugar, and has 12-15 gm of protein per serving. Their yogurts use avocado fruit oil to increase the fat content.
The cosmetics and personal care products segment is expected to lead the industry in terms of revenue. Even though the product has green color and low odor, it is compared very favorably with lanolin as it had good skin penetration, high vitamin E content, and exceptional keeping qualities. It also produces finer emulsions when used in skin lotions and creams. Therefore, cosmetics companies are inclined toward this ingredient to enhance their product quality.
North America Avocado Oil Market Size, 2020 (USD Million)
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Avocado oil is well-known, with increasing consumption in North America and rising popularity in the rest of the world. The North America market stood at 272.21 million in 2020, and it is predicted to dominate the global market during the forecast period. The region’s dominance is attributed to growing interest among consumers about the product and its uses due to the product’s nutritional and technological characteristics. Avocado fruit oil used in cooking has some proven benefits due to its vitamin E content and high oleic fatty acid content. Henceforth, the increasing concerns for better health and rising interest in diverse dietary components, with particular attention to fat that has been correlated to various diseases, such as obesity and diabetes, are anticipated to support the steady growth of the regional market. In North America, Spectrum Organics Products, La Tourangelle, Inc., and Olivado USA are some of the crucial players operating in the avocado market and constantly focusing on expanding their product offerings.
Asia Pacific is expected to grow at the highest CAGR in the foreseeable years, mainly due to the rising popularity of the product in China, Japan, and others. In recent years, China has started large-scale planting of avocado in Guangdong, Yunnan, and Fujian provinces. According to the government of China, in the next few years, China will increase its production capacity of avocado fruit oil due to the easy availability of raw materials. Furthermore, the rising demand for the product from other Asian countries, such as Japan and Malaysia, and the wide availability of the product in online and offline distribution channels are expected to drive the regional market.
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Europe and South America are anticipated to grow at a significant pace due to the growing demand for the product from the food, cosmetics, and personal care industries. Technological advancement, product innovation, and rising awareness among customers regarding the benefits of the product are anticipated to impact the regional market growth positively. On the other hand, the Middle East & Africa is expected to witness slow growth in the market. Comparatively, limited product awareness and marketing are anticipated to restrict the regional market growth up to a certain extent regardless of the strong potential consumer base in this region.
Rigorous Innovations and Novel Product Launch to Aid Dominant Position in Market
Spectrum Organics Products, La Tourangelle, Inc., Olivado USA, and Grove Avocado Oil are some of the most active companies with an extensive range of premium products. These companies have spent significantly on market research, product innovation, packaging, and improving quality in terms of the product's functionality. For instance, in May 2021, Grove Avocado Oil introduced a new everyday oil. This new avocado oil’s smoke point is very high, which is a plus point for consumers as it can be used for high-heat cooking and is also great for stir-fry. Similarly, other companies have embraced a strategic partnership with relevant stakeholders to surge their consumer base and geographic presence.
An Infographic Representation of Avocado Oil Market
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The global avocado oil market report includes quantitative and qualitative insights into the global market. It also offers a complete analysis of the demand, market size, and growth rates for all possible market segments. Numerous key insights presented in the report are an overview of the parent market, competitive landscape, market opportunity, and recent industry developments such as base expansion, a regulatory scenarios in critical countries, and key industry trends.
Value (USD Million)
Fortune Business Insights says that the global market size was USD 533.53 million in 2020 and is expected to reach USD 822.29 million by 2028.
Rising at a CAGR of 5.82%, the market will exhibit promising growth in the forecast period (2021-2028).
Pure/refined oil is anticipated to be the leading segment during the estimated period.
Technological advancement in product manufacturing is the key factor driving market growth.
The Village Press, Bella Vado Inc., Sesajal S.A de C.V., La Tourangelle, Inc., Spectrum, and Organics Products, LLC are some of the leading players in the market.
North America dominated the market in 2020.
The personal care and cosmetics segment holds the major share in the global market.
Advertising a green brand image is the global market trend.
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