Butter Oil: Market outlook

Butter oil also known as anhydrous milk fat, is a dairy product that is obtained after the removal of non-fat milk solids and moisture contained in the butter. Butter oil is the purest form of milk fat-based dairy product. Butter oil has a light yellowish color and a clean, bland taste that is free from bitter, sour, oxidized, rancid, or any other objectionable flavors. Butter oil is widely used in the food industry and in households as a popular dairy ingredient for processing food products. Butter oil is one of the most convenient dairy product as its liquid form can be easily mixed into a wide range of food formulations and recipes. Butter oil can be stored at ambient temperatures and can be economically and efficiently used to transport and store butterfat. The extended shelf life of butter oil helps the manufacturers to leverage the usability of the product in food processing end uses like bakery, confectionery, ice-cream, sweet dishes, and others. Butter oil is a healthier alternative to conventional dairy-based products, as butter oil has non-fat milk solids removed and has the additional nutritional value that is health benefiting. Butter oil is enriched with antioxidants and vitamins and hence helps in boosting the immune system of the body; besides, butter oil improves bowel movement and helps in relieving constipation. The market oil is anticipated to witness lucrative growth over the forecast period owing to its increasing usage in the food processing industry as well as its stable shelf life.

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Growing Demand for Premium Oil-based Cosmetics and Increasing Demand for Organic Beauty Products is Fueling the Demand for Butter Oil

The rising dairy sector is well-thought-out to be the chief factor driving the growth for butter oil market over the forecast period. Increasing urbanization and snowballing purchasing power, coupled with the refining standards of living are making consumers drift towards products that have nourishing values and easy usability. Butter oil is a dairy product obtained from the processing of butter or cream. Butter oil finds application in the ever-increasing food industry to process products like ice-creams, baked goods, confectionery, and other dairy-derived products. The growing use of dairy products in the food industry is thus paving the path for butter oil over the forecast period. The second driver for the increasing market of butter oil is its extended shelf life and easy usability as compared to the alternative available in the market. Furthermore, the nutritional values associated with the consumption of butter oil is helping the product to gain traction of a large consumer base. However, the growing trend for veganism in developed economies is considered to hamper/hinder the growth of butter oil and other dairy products over the forecast years.

Butter Oil: Market Segmentation

On the basis of nature, global butter oil can be segmented as:-

  • Organic
  • Conventional

On the basis of end use, global butter oil can be segmented as:-

  • Food Processing Industry
  • Food Service Providers
  • Household/ Retail

On the basis of distribution channel, global butter oil can be segmented as:-

  • B2B
  • B2C
    • Store-based Retailing
      • Hypermarkets/ Supermarkets
      • Convenience Stores
      • Food and Drink Specialty Stores
      • Independent Groceries
      • Others
    • Online Retailing

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Butter Oil: Key Players

Some the key players operating their business in the global butter oil market are Fonterra Co-operative Group Ltd., Groupe Lactalis, Meadow Foods Ltd., Dairy Farmers of America, Murray Goulburn Co-operative Co Ltd, and Westland Co-Operative Dairy Co Ltd among others

  • The big companies operating in the dairy industry are trying to update their inventories with butter oil. The manufacturers are acquiring small dairy producers or are getting into collaborations with counterparts, to produce large volumes of butter oil, to cater to the growing application of butter oil in the food industry.
  • In 2018, Meadow Foods, a UK-based dairy group acquired ghee and butter oil manufacturer Roil Foods. The butter oil can be used in the production of chocolate or other dairy products which require a pure butter flavor.
  • Strong marketing campaigns and promotional activities is anticipated to help dairy producers to gain hold of consumers and promote butter oil in the untapped markets.

Opportunities for Butter Oil Market Participants:

Butter oil is majorly produced in Australia and New Zealand, each contributing to large production volumes of the product. However, some countries have industrialized dairy production also adds to the production of butter oil. The major countries importing the butter oil includes the Middle East, Latin America, and the Asia Pacific. The growing imports for butter oil in the Asia Pacific, Middle East, and Latin America are due to lack of sufficient production of fresh milk, and growing demand for dairy products among the consumers. The increasing demand for dairy-derived food products and dairy ingredients is fueling the demand for butter oil over the forecast period. Besides, in developed regions like North America and Europe, butter oil is gaining popularity owing to its health benefiting properties and increased shelf-life stability over the other alternatives available.

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