Australia Edible Oil Market Growth and Future Outlook 2024-2032

he Australia edible oil market is poised for significant growth, having reached a valuation of AUD 970.97 million in 2023. With an expected compound annual growth rate (CAGR) of 6.10% from 2024 to 2032, the market is projected to expand to AUD 1,654.41 million by 2032. This growth is largely driven by innovations in specialty oils, changing consumer preferences toward healthier and more sustainable products, and a strong domestic production capacity that reduces the country’s reliance on imports.

In this article, we will explore the driving forces behind this expansion, key trends shaping the industry, and the future outlook for the edible oil market in Australia.

Key Drivers of Growth in the Australia Edible Oil Market

Rising Demand for Healthy and Functional Oils

The global shift toward healthier eating habits is evident in Australia, where consumers are increasingly seeking oils with health benefits such as heart health, weight management, and anti-inflammatory properties. This trend has led to a surge in demand for oils like:

Olive oil: Known for its high levels of monounsaturated fats and antioxidants, olive oil is gaining popularity in Australian households and restaurants, especially in health-conscious circles.
Coconut oil: Often used for its high MCT (Medium Chain Triglycerides) content, which aids in metabolism and weight loss, coconut oil has become a favorite in the health and wellness sector.
Avocado oil: Rich in vitamin E and monounsaturated fats, avocado oil is increasingly being used in cooking, as well as in cosmetic products.

These oils not only provide nutritional benefits but are also marketed as natural alternatives to conventional oils like vegetable oil, which are often associated with unhealthy fats and processing.

Rise of Organic and Cold-Pressed Oils

As consumers become more discerning about what goes into their food, demand for organic oils and cold-pressed oils is on the rise. Cold-pressed oils are perceived as healthier due to their minimal processing, preserving the natural nutrients and flavors of the seeds, nuts, or fruits from which they are derived.

Cold-pressed olive oil and cold-pressed avocado oil are becoming increasingly common on supermarket shelves.
Organic oils made from seeds, such as organic sunflower oil, flaxseed oil, and hemp oil, are also gaining popularity as more people focus on reducing their intake of synthetic chemicals and pesticides.

This trend aligns with the growing consumer preference for clean label products, which emphasize minimal processing and natural ingredients.

Sustainability and Environmental Concerns

The rising awareness of sustainability is having a profound impact on the edible oil market. Consumers are now more inclined to choose products that align with their values, including sustainability and ethical sourcing.

Sustainable sourcing practices: Many companies are turning to responsibly sourced palm oil, which has traditionally been associated with deforestation and environmental harm. Sustainable palm oil certification, like the Roundtable on Sustainable Palm Oil (RSPO), ensures that palm oil production has minimal environmental impact.
Eco-friendly packaging: The demand for eco-conscious packaging is also increasing, with companies shifting toward recyclable, biodegradable, and plastic-free packaging for their edible oil products.

These factors are shaping the market, with manufacturers and retailers adopting eco-friendly practices to meet the growing demand for sustainable products.

Market Segmentation

The Australia edible oil market can be segmented by oil type, distribution channel, and end-user industry. Understanding these segments is key to capturing opportunities in a rapidly evolving landscape.

1. By Oil Type

Vegetable oils: This category includes a wide range of oils such as canola oil, soybean oil, sunflower oil, and corn oil, which are commonly used in households and the foodservice industry. Vegetable oils remain a staple due to their affordability and versatility in cooking.
Specialty oils: This segment includes olive oil, coconut oil, avocado oil, peanut oil, and palm oil. These oils are gaining market share as consumers opt for healthier and more gourmet alternatives.
Organic oils: The demand for organic oils is on the rise, with a growing preference for oils that are free from synthetic pesticides and fertilizers.
Cold-pressed oils: Cold-pressed oils are gaining popularity for their health benefits and minimal processing.

2. By Distribution Channel

Supermarkets and hypermarkets: These are the largest distribution channels in the Australian edible oil market, driven by the broad range of edible oils available and the convenience of shopping for daily groceries in these outlets.
Online retail: The online retail channel is expanding rapidly, driven by the convenience of doorstep delivery, the availability of organic and specialty oils, and the increasing shift toward digital shopping.
Convenience stores: Though smaller in size, convenience stores also contribute to the edible oil market, particularly for impulse purchases of oils.

3. By End-User

Household use: The largest end-user segment, as Australians continue to rely on edible oils for everyday cooking and food preparation.
Foodservice industry: Restaurants, cafes, and fast food chains are significant consumers of edible oils, especially for frying and food preparation. Oils like canola oil and vegetable oil are commonly used in this sector.
Manufacturing and industrial use: Edible oils are also used in manufacturing sectors for food processing, including bakery products, snack foods, and ready-to-eat meals.

Key Players in the Australian Edible Oil Market

Several domestic and international brands are shaping the Australian edible oil market by providing a range of innovative and high-quality products. Some of the notable players include:

Australia’s Golden Canola: A leading player in the market, known for offering premium canola oils and cold-pressed oils.
Unilever Australia: The company offers a variety of edible oils, including vegetable oils, olive oils, and coconut oils, under popular brands like Helmans and Mayo.
Cottee’s: A staple in Australian households, Cottee’s offers a variety of vegetable oils and sunflower oils at competitive prices.
Bertolli: As a major supplier of olive oil, Bertolli continues to innovate with new packaging and marketing strategies aimed at health-conscious consumers.

Opportunities in the Market

Health-Conscious Consumer Base: With increasing concerns around heart health, weight management, and organic food, the demand for healthier edible oils is expected to rise. Cold-pressed, organic, and specialty oils like hemp oil and flaxseed oil are expected to experience sustained growth.
Expansion of Online Retail: The continued growth of online grocery shopping presents a unique opportunity for edible oil brands to tap into e-commerce channels. The rise of subscription-based models and direct-to-consumer sales allows for better consumer engagement and loyalty.
Product Diversification and Innovation: Manufacturers are expected to continue innovating with new oil blends, flavored oils, and health-boosting varieties. There is significant room for growth in specialty oils like avocado, almond, and sesame oils.

Challenges in the Market

Fluctuating Raw Material Prices: The prices of raw materials for edible oils, particularly vegetable oils and palm oil, are subject to fluctuations due to supply chain disruptions and environmental concerns.
Sustainability Challenges: The production of palm oil continues to raise environmental concerns related to deforestation. This issue requires careful attention from manufacturers and suppliers to meet sustainability standards and certifications.
Competition from Imported Oils: While Australia has a strong domestic edible oil production base, imported oils still pose a challenge, particularly in the mass-market segment.

Health and Wellness Trends Impacting the Edible Oil Market in Australia

Low-Trans and Low-Saturated Fat Oils: Australian consumers are becoming more health-conscious, seeking products that contribute to heart health. As such, there is an increasing preference for oils with low levels of saturated fats and trans fats. Olive oil, particularly extra virgin olive oil, has gained traction for its monounsaturated fats that are known to promote heart health and lower cholesterol.
Functional Foods: With the rise of the functional food trend, oils are increasingly being used not only for their culinary uses but also for their functional benefits. Oils like fish oil (rich in omega-3 fatty acids) and flaxseed oil (high in omega-3 and antioxidants) are growing in popularity, as they offer additional health benefits beyond basic nutrition.
Ketogenic Diet Influence: The growing popularity of diets like Keto and Paleo in Australia is driving the demand for oils with high levels of healthy fats. Oils like coconut oil and MCT oil are well-suited for these diets due to their potential to support weight loss and provide sustained energy.
Natural and Plant-Based Oils: The increasing preference for plant-based foods is leading more consumers to choose plant-derived oils. Canola oil, sunflower oil, and soybean oil are popular choices due to their plant-based origins, which align with plant-centric diets and the growing demand for vegan and vegetarian options.

Impact of Consumer Behavior on the Australia Edible Oil Market

Shift Toward Online Shopping: The growth of online grocery shopping in Australia has influenced the edible oil market. With more consumers opting for contactless deliveries, the convenience of online ordering is compelling edible oil companies to increase their digital presence. E-commerce platforms such as Amazon, Woolworths Online, and Coles Online have become vital channels for consumers to access a variety of oils, from everyday vegetable oils to premium and specialty products like organic olive oil.
Increased Focus on Convenience: As busy lifestyles continue to dominate, convenience plays a significant role in consumer purchasing decisions. Pre-packaged, ready-to-use oils, including spray oils and small-sized bottles ideal for on-the-go cooking, are gaining popularity. Brands are also offering innovative products like oil blends, which combine multiple oils to meet different culinary needs in one convenient bottle.
Local Sourcing and Support for Australian Farmers: A growing number of Australian consumers are interested in locally sourced products, supporting Australian farmers and reducing the environmental impact of imports. This has encouraged more businesses to focus on sourcing their oils locally. For example, canola oil produced in Australian farms is gaining preference over imported alternatives, contributing to the growth of domestic oil production.

Regulatory Environment and Standards

Food Safety Regulations: The Australian government maintains strict food safety regulations to ensure the health and safety of its consumers. These regulations apply to edible oils, particularly regarding labeling, packaging, and production processes. Companies in the edible oil market must adhere to Food Standards Australia New Zealand (FSANZ) guidelines and ensure that their products are compliant with local food safety protocols.
Sustainability Certifications: Sustainability is becoming a key area of focus within the edible oil market, and companies are increasingly pursuing certifications such as Fair Trade and RSPO to demonstrate their commitment to ethical practices and sustainable sourcing. These certifications not only assure consumers that products meet high standards but also promote environmental sustainability across the entire supply chain.
Health and Nutrition Labels: Australian consumers are seeking more transparency regarding the nutritional profile of edible oils. As a result, many edible oil brands are incorporating nutritional labels and claims related to heart health, low cholesterol, and other health benefits. Oils that feature “low in trans fats”, “high in omega-3”, and “100% organic” claims are becoming more attractive to consumers who prioritize health.