Implementation of Stringent Regulations Pertaining to Butter Fat to Benefit Global Industrial Fat Fraction Market

Persistence Market Research (PMR) has published a new report on the industrial fat fraction market titled “Industrial Fat Fraction Market: Global Industry Analysis, Size, Share, Growth, Trends, and Forecast 2017 – 2025.” The rising consumption of dairy products is fueled by the nutritional benefits associated with the consumption of these products. As per the Food and Agriculture Organization (FAO), approximately 150 million households are engaged in milk consumption at a global level. Particularly, small-scale producers in developing countries are increasing their per capita milk production, owing to the rising demand for the product. The Codex Standard for dairy permeate is the core body defining the amount of fat in butter and butter specific products.

In order to adhere to these standards, the companies operating in the market are focusing on different strategies pertaining to production expansion, new product introduction and mergers and acquisitions for acquiring the latest technology. For instance, in 2016, Arla Food Ingredients Group opened a new factory in Nr Vium, Denmark, dedicated to protein hydrolysates, and invested around US$ 42.5 Mn on this facility, which can produce 4,000 MT of high quality whey and casein hydrolysates in a year for use in infant, medical, and sports products. In June 2017, the company launched a new protein - Nutrilac® PB-8420, a whey protein that guarantees protein bars retain an indulgent cohesive texture for a year, as textural deterioration of high protein functional bars has been a concern over the past few years, thus catering to the demand from the fortified food sector.

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The other companies operating in the market are Corman SA, Murray Goulburn Co-Operative Co. Limited, Flechard SA, Ornua Co-operative Limited, Groupe Lactalis S.A., and Koninklijke FrieslandCampina N.V., among others. According to the report, the global market for industrial fat fraction is expected to witness a CAGR of 2.7% from 2017 to 2025. The market was worth US$ 10, 596.5 Mn in 2017 and is expected to touch a valuation of US$ 13,139.8 Mn by the end of 2025.

Revival of Homemade Food Culture to Increase Market Penetration

There has been a sudden revitalization of homemade breakfasts and lunches, owing to the constant desire of consumers to save money by making their own lunches and having breakfast at their homes instead of picking up meals on-the-go. This trend is anticipated to drive market revenue growth as breakfast and lunch are the key occasions for the usage of dairy based spreads. Furthermore, obtainability of numerous flavors of dairy based spreads with different fat content and being spreadable in nature even when refrigerated, thus facilitating ease of use, is also expected to drive the market growth in the near future. In addition, there has been a resurgence of home baking attributed to various cooking shows, which has made cooking more accessible and is influencing consumers to cook at home, in return increasing the demand for industrial fat fraction.

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High Price for Non-premium Products to Obstruct Market Growth

Butter is already an expensive product for the population in several developing regions. Value-added products such as spreadable butter is restricted only to Tier-1 towns and urban dwellings. This is anticipated to slow down the development of the industrial fat fraction market in these regions. Consumers take price points very seriously in regions such as Latin America, the Middle East and Africa, and Asia Pacific and premium products are anticipated to experience longer inventory retention, which eventually slows down the adoption of the product. This can dampen retail chains in these regions from participating in the industrial fat fraction market, eventually hindering the growth of the market over the forecast period.

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