Avocado oil is extracted from the fruit of Persea Americana tree through different processes to obtain extra virgin, refined and crude avocado oil. It is a highly nutritious oil rich in vitamins, minerals and healthy fats that provide various health benefits. Avocado oil is used for cooking, beauty products and supplements due to its high smoke point and antioxidants. The global avocado oil market offers multifunctional benefits and advantageous features that fulfill the increasing demand from cosmetic, personal care and food processing industries.
The global Avocado Oil Market is estimated to be valued at US$ 1660.15 Mn in 2023 and is expected to exhibit a CAGR of 5.7% over the forecast period 2023 to 2030, as highlighted in a new report published by Coherent Market Insights.
Market Opportunity:
The growing cosmetic industry demands natural and organic ingredients which is a key opportunity for avocado oil market. Avocado oil contains vitamins A, D and E that provide anti-aging properties making it suitable for skin and hair care products. It moisturizes and nourishes the skin due to excellent emollient qualities. The oil protects skin from damage due to free radicals with strong antioxidant activity. Various cosmetic brands are using avocado oil in creams, lotions and serums owing to multiple skin benefits. This increasing usage in personal care coupled with high demand for natural ingredients offers substantial growth prospects to avocado oil market over the forecast period.
Porter’s Analysis
Threat of new entrants: The threat from new entrants is moderate as setting up new production facilities requires high capital investment. Moreover, key players are engaged in mergers and acquisitions to strengthen their market presence. However, organic avocado farming is easy to start and access to technology reduces entry barriers.
Bargaining power of buyers: The bargaining power of buyers is moderate. Avocado oil is used extensively in food processing, cosmetics and pharmaceuticals industries. Buyers can negotiate prices due to availability of substitutes. However, health benefits and unique properties provide some differentiation.
Bargaining power of suppliers: The bargaining power of suppliers is moderate to high. Key suppliers of avocado include Mexico, Chile, Peru, Colombia and Dominican Republic. Fluctuations in production due to weather conditions enables suppliers to dictate prices. Suppliers are consolidating to improve their position in negotiations.
Threat of new substitutes: The threat from substitutes is moderate. Olive oil is the major substitute but avocado oil's superior nutritional profile is boosting its demand. Other substitutes include almond oil, coconut oil but they do not match the versatility of avocado oil.
Competitive rivalry: The competitive rivalry is high owing to strong presence of global and regional players. Players compete on the basis of product differentiation, production capacity, distribution reach and price.
SWOT Analysis
Strength: High concentration of monounsaturated fats, vitamins and minerals. Versatile properties make it suitable for use in multiple industries like food, personal care etc. Growing health consciousness driving popularity.
Weakness: Seasonal supply leads to price volatility. Production dependent on climatic conditions. Heavy reliance on few key regions like Mexico increases supply risks.
Opportunity: Increasing usage in cosmetics and nutraceuticals due to anti-aging and moisturizing properties presents new growth avenues. Popularity of vegan and organic products provides impetus. Growing culinary applications offer scope for market expansion.
Threats: Susceptibility to diseases impacts yields. Competition from cheaper substitutes like olive oil in certain applications. Vulnerable to trade policies and geopolitical tensions involving key producing nations.
Key Takeaways
The Global Avocado Oil Market Growth is expected to witness high over the forecast period due to rising demand for plant-based oils offering superior nutrition. The global Avocado Oil Market is estimated to be valued at US$ 1660.15 Mn in 2023 and is expected to exhibit a CAGR of 5.7% over the forecast period 2023 to 2030.
North America currently dominates the market owing to high consumption in US, increasing product awareness and strong production from Mexico. The region accounts for over 35% revenue share. Europe holds the second largest share and growth will be supported by rising health consciousness and focus on vegan diets. Production is slowly rising in Spain and Italy. However, Asia Pacific is projected to be the fastest growing regional market. Growth in India and China will befuelled by expanding middle class, western influence on food habits and launch of innovative applications.
Key players operating in the avocado oil market are Cargill Incorporated, Archer Daniels Midland Company (ADM), Bunge Limited, Ingredion Incorporated, Tate & Lyle
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