Margarine and shortening are butter substitutes usually made from vegetable oils and water. Margarine spread and shortening products offer several advantages over butter including lower price, longer shelf life, and lower saturated fat and cholesterol content. The growing health-consciousness among consumers has increased the demand for healthier cooking and spreading options. Margarine and shortening are considered healthier substitutes to butter due to their plant-based formulation.
The global 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 to 2030, as highlighted in a new report published by Coherent Market Insights.
Market Opportunity:
Rise in demand as healthy alternative to butter is a key opportunity in the margarine and shortening market over the forecast period. Consumers are becoming increasingly health-conscious and seeking out butter substitutes that are lower in saturated fat and cholesterol. Margarine and shortening products fit well with this trend since they are formulated using vegetable oils rather than milk products. Plant-based milk and spreads in particular are gaining widespread popularity among health-focused consumers. As awareness grows around the health risks associated with high butter consumption, demand for margarine and shortening as healthier substitutes is expected to increase significantly in the coming years. Manufacturers can capitalize on this opportunity by developing new product lines that directly compete with butter based on nutrition profile and marketing the health benefits of their margarine and shortening products.
Porter’s Analysis
Threat of new entrants: The margarine and shortening market is established with key players having large production capacity and strong brand loyalty. However, requirements for large production plants act as a barrier for new entrants.
Bargaining power of buyers: Buyers have moderate bargaining power due to the availability of substitutes like butter. However, buyers seek value-for-money products leading to pricing pressures.
Bargaining power of suppliers: Major suppliers include agro-commodity suppliers and packaging material providers. Suppliers have moderate bargaining power due the availability of substitutes and reliance of buyers on a few major suppliers.
Threat of new substitutes: Substitutes like butter provide competition. However, margarine and shortening are preferred for their affordable prices and health benefits.
Competitive rivalry: The market is dominated by top players. However, private labels from retailers increase competition.
SWOT Analysis
Strength: Product portfolio diversification, economies of scale, strong brand equity and distribution network.
Weakness: Vulnerable to agro-commodity price volatility, high commodity dependence, capital intensive production.
Opportunity: Asian and African market growth, demand for plant-based and healthy products.
Threats: Price wars from retail brands, regulations around trans-fatty acids, changing consumer preferences.
Key Takeaways
The Global Margarine And Shortening Market Growth is expected to witness high driven by population growth in developing regions and rising health awareness.
Regional analysis: Asia Pacific holds the major share currently led by countries like China and India. The region is projected to be the fastest growing market during the forecast period supported by rising disposable incomes, growing demand for convenience foods, and westernization.
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.
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