PHO and Non-PHO Oils Market reaches US$248.3Bn in 2025 boosted by rising health awareness

The global PHO and non-PHO based oils and fats market is experiencing sustained expansion driven by evolving consumer preferences, regulatory transitions, and heightened demand from food processing industries. Valued at US$ 248.3 billion in 2025, the market is projected to reach US$ 335.6 billion by 2032, advancing at a CAGR of 5.1% throughout the forecast period from 2025 to 2032. This trajectory reflects a combination of key growth accelerators, including the rising adoption of healthier alternatives to partially hydrogenated oils (PHOs), increased processed food consumption globally, and the tightening of international regulations targeting trans-fat reduction.

The regulatory environment plays a pivotal role in shaping market dynamics. As global health authorities, including the WHO and FDA, intensify their efforts to limit industrial trans fats, manufacturers are increasingly reformulating products with non-PHO oils such as palm oil fractions, high-oleic vegetable oils, and specialty fats. Meanwhile, the foodservice sector continues to demand oils that offer extended shelf life, high stability, and cost-efficiency, reinforcing the need for innovative fat solutions. Furthermore, evolving dietary patterns, the expansion of bakery and confectionery industries, and rapid urbanization in emerging economies continue to amplify market demand.

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Segmentation Analysis

By Type

The market is broadly segmented into PHO-based oils and fats and non-PHO-based oils and fats. While PHO products historically held a significant share due to their functional benefits such as longer shelf life and improved texture, global regulations limiting trans fats have substantially shifted demand toward non-PHO substitutes. Consequently, non-PHO oils and fats dominate the market in 2025 and are expected to maintain accelerated growth through 2032.

Non-PHO variants-particularly palm oil derivatives, high-oleic sunflower oil, canola oil, and vegetable shortening alternatives-are increasingly favored across bakery, confectionery, and packaged foods. Their ability to mimic the functional characteristics of PHO without the associated health risks makes them the fastest-growing segment. Enhanced research into enzymatic interesterification, fractionation technologies, and sustainable sourcing continues to improve non-PHO product performance, further solidifying this segment's lead in the global market.

By Product/Application Type

Within the broad product and application spectrum, bakery and confectionery applications remain the most prominent contributors due to the essential role oils and fats play in texture, mouthfeel, and product stability. The processed food sector, including snacks, ready meals, and frozen foods, has also intensified its use of specialty fats that balance functionality with health-conscious formulations.

In the foodservice sector, rapidly expanding quick-service restaurant chains and fast-casual dining establishments are prioritizing fry-stable, long-lasting oils that minimize operational costs. The adoption of non-PHO solutions in these settings is driven primarily by regulatory compliance and rising consumer expectations for cleaner labels. Meanwhile, industrial applications such as biodiesel production and cosmetics also contribute to demand, although food-focused applications remain the principal market driver.

By Technology/Channel

Technological innovations such as enzymatic processing, advanced fractionation, and hybrid oil formulations are transforming the landscape of the oils and fats market. Companies are increasingly leveraging these technologies to reduce saturated fat content, enhance oxidative stability, and improve overall functionality. In the distribution ecosystem, both offline and online channels are expanding, with digital purchasing platforms gaining traction among medium and small-scale food manufacturers. The ability to compare product specifications, access technical data, and streamline procurement processes online has significantly influenced channel dynamics.

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Regional Insights

Regionally, Asia-Pacific leads the global PHO and non-PHO based oils and fats market, driven by high consumption of palm oil and its derivatives, cost-effective production capabilities, and strong demand across the food processing and foodservice sectors. Countries such as Indonesia, Malaysia, China, and India contribute significantly to regional dominance through both production and consumption channels.

North America is undergoing substantial transformation due to rigorous FDA mandates eliminating industrial trans fats, resulting in a surge of reformulation activity among manufacturers. This regulatory shift has positioned North America as one of the fastest adopters of non-PHO alternatives. Meanwhile, Europe continues its strong performance supported by sustainability-driven initiatives, stringent regulatory frameworks, and increasing consumer preference for premium, plant-based fat solutions.

The fastest-growing region during the forecast period is projected to be the Middle East & Africa. Rapid urbanization, increased investment in food manufacturing infrastructure, and rising demand for packaged foods are contributing to accelerated market growth. Additionally, the region's heightened focus on food security and expanding retail networks supports long-term market development.

Unique Features and Innovations in the Market

The evolving oils and fats market is distinguished by continuous innovation, sustainability-focused advancements, and the integration of modern technology across production and quality monitoring. A key differentiating factor is the progressive shift toward removing trans fats without compromising sensory attributes or product stability. This has accelerated the development of novel interesterified fats, structured lipids, and high-performance frying oils.

Technologies such as artificial intelligence and IoT are being leveraged to optimize sourcing, production, and quality control. For instance, AI-driven predictive analytics help manufacturers forecast demand patterns and enhance supply chain efficiency, while IoT-enabled processing equipment supports real-time monitoring of temperature, oxidation levels, and product consistency. Additionally, the incorporation of 5G connectivity in manufacturing facilities facilitates automated processing, enhanced traceability, and improved sustainability metrics.

Sustainability remains a major focal point, with companies investing in deforestation-free palm oil, renewable energy utilization, and traceable supply chain frameworks. These innovations not only ensure regulatory compliance but also align with growing consumer expectations for ethical and environmentally responsible sourcing.

Market Highlights

The oils and fats market is heavily influenced by health-focused regulations, cost optimization strategies, and expanding applications across food and non-food industries. As global governments enforce stringent limits on trans-fat content, businesses are transitioning rapidly toward non-PHO solutions that meet both regulatory and functional requirements. This shift is further supported by cost-reduction benefits, such as extended frying life of high-stability oils, minimized waste, and improved product shelf life.

Sustainability initiatives are reshaping procurement and production practices. Companies that demonstrate responsible sourcing, reduced carbon footprints, and supply chain transparency are gaining competitive advantages. Moreover, the rising popularity of plant-based diets and clean-label products continues to stimulate demand for naturally derived, minimally processed oils.

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Key Players and Competitive Landscape
The global PHO and non-PHO based oils and fats market is moderately consolidated, characterized by established multinational players and a competitive ecosystem of regional producers. Leading companies are strategically investing in product innovation, geographic expansion, and sustainable sourcing initiatives to strengthen their market presence.
Prominent companies operating in the market include major global agribusiness firms, specialty fat manufacturers, and integrated edible oil processors. Their strategic priorities encompass reformulation efforts to align with regulatory requirements, supply chain optimization, and the introduction of high-performance non-PHO alternatives designed to meet the evolving needs of bakery, confectionery, and foodservice industries.
Many players are also expanding production facilities in Asia-Pacific to capitalize on raw material availability and operational efficiencies. Meanwhile, North American and European manufacturers are focusing heavily on R&D to develop healthier, cleaner, and more sustainable fat solutions. The alignment of product portfolios with consumer wellness trends-such as reduced saturated fat content and enhanced nutrient profiles-remains central to competitive positioning.
Future opportunities lie in the growing demand for plant-based foods, personalized nutrition, and advanced fat modification technologies. As the industry embraces digital transformation, smart factories, AI-driven supply chain management, and enhanced traceability systems are expected to shape the next phase of market evolution. Regulatory changes, particularly those targeting environmental sustainability and trans-fat elimination, will continue to influence innovation pipelines and investment strategies across the globe.
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