The global algae oil market is predicted to rise at a 3.7% CAGR over the forecast period. In 2024, the industry is projected to reach USD 2,442 million. Similarly, by 2034, global sales of algae oils are predicted to total USD 3,495.8 million.
Algae oil manufacturers are expected to gradually pave their way forward. They are raising funds to support the commercialization of algal oil, by getting the support of stakeholders. For certain projects, the focus is shifting from research and development activities toward pilot programs. All these efforts are expected to appreciate the sector’s value.
The sector is propelled by the versatility of algae oil and its benefits over traditional sources. The product is used across several industries, the most prominent ones include food and beverage, nutraceuticals, cosmetics, and biofuels. Since algal oil offers a plant-based source of omega-3 fatty acids, it appeals not only to health-conscious individuals but also to vegans and vegetarians. Further, the product is used to fortify products like beverages and dairy alternatives.
Global Algae Oil Industry Assessment
| Attributes | Description |
|---|---|
| Estimated Size, 2024 | USD 2,442 million |
| Projected Size, 2034 | USD 3,495.8 million |
| Value-based CAGR (2024 to 2034) | 3.7% |
Algae oil is also replete with vitamins, antioxidants, and fatty acids, which provide significant benefits for skin health. Its sustainable and natural profile gels up with the increasing demand for clean beauty products.
Algae oil is used in serums, moisturizers, sunscreens, and even makeup. Their increasing sales are expected to improve the business prospects of algae oil. Further, dietary supplements containing algae oil help improve brain function and heart health. Physicians and dieticians are recommending these supplements for various body ailments. As a result, sales of algae oils are projected to rise.
Several governments across the globe are promoting research and development initiatives in renewable energy sources, such as algae biofuels. This is projected to have a positive impact on the sector over the forecast period. Additionally, for customers looking for ethically sourced and eco-friendly alternatives for fish oil, algae oil emerges as an ideal sustainable solution.
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Sustainability Concerns in the Aquaculture Sector Raise Algae Oil Use
The sustainability aspirations of the aquaculture sector of various nations, where the strategic value of aquaculture is high, are boosting the use of algae oil. This demonstrates the industry’s dedication to innovate and showcase environmental stewardship.
In Canada, for instance, Veramaris gained authorization for algal oil to be used in feeds for salmonid species. This is expected to make a positive impact on farm-raised salmon and contribute to advanced sustainable practices within the aquaculture sector.
Government Programs and Private Companies Make Headway in the Industry
Many advances are fueling the industry’s growth. For instance, Viridos, a California-based algae biofuel corporation, raised USD 25 million in 2023 after it lost the support of ExxonMobil. Funds for the sustenance of the algae project to move to commercialization are invested by stakeholders Chevron, United Airlines, and Breakthrough Energy Ventures.
In the same year, the United States Department of Energy Bioenergy Technologies Office financed four significant algae biofuel and biomass projects to develop scalable production methods and gain low-carbon intensity efficiency. More so, many of these algae initiatives are shifting from basic research and development to pilot programs, with the potential to realize scaled-up production probably a few years down the lane.
Key Challenges that Impact Industry’s Progress
Despite the myriad benefits of algae oil, players are still faced with exacting challenges. Among these, increasing the efficiency of production processes as well as high production costs limit the industry expansion. Key players share that research is still going on to overcome these challenges in the future. This offers some relief for players quite invested in this field.
The algae oil market reached a valuation of USD 1,981 million in 2019. By the year 2023, the sector amassed a total of USD 2,219.9 million. Throughout this period, the sector registered a 3.7% CAGR. The surge in the algal oil use in the food and beverage sector raised the sector’s growth.
Further, growth in consumer knowledge about the benefits of algae oil like phycocyanin, high proteins, omega 3, and antioxidants, contributed to the industry’s expansion.
In the next 10 years, the sector is projected to advance at a CAGR of 3.7%, reaching USD 3,495.8 million by 2034. The use of algal oil is forecast to increase as a specialty oil due to its low saturated fat content. Another aspect that is predicted to boost its use as a specialty oil is that it improves cognition and eyesight and reduces cholesterol.
Increasing investments in the industry to commercialize the algae oil, in addition to related partnerships among players to empower each other, are anticipated to fuel the sector’s growth. Additionally, research is being funded to increase the efficiency of the production process, which is expected to improve the sector’s potential.
Principal Consultant
In the first half of the period commencing from 2023 to 2033, the sector is forecast to witness a CAGR of 3.6%. In the latter half of the same period, the sector will likely register a 3.7% CAGR.
| Particular Value | CAGR |
|---|---|
| H1 | 3.6% (2023 to 2033) |
| H2 | 3.7% (2023 to 2033) |
| H1 | 3.8% (2024 to 2034) |
| H2 | 3.8% (2024 to 2034) |
The business scope of the sector in the H1 of the latest period, i.e., 2024 to 2034, is projected to progress at 3.8% CAGR. The same CAGR is anticipated to continue over the next half of the same period.
Tier 1 companies in the algae oil market relish global recognition. These companies have a value share of 30%. These firms enjoy economies of scale as they invest in large-scale production units that help bring down the cost of algal oil. This allows them to price their offerings competitively.
Besides, companies are collaborating with established players in sectors like biofuel, nutraceutical, and food. This pushes them to access established customer bases and wider distribution channels.
These players are significantly investing in research and development activities. Thus, allowing them to enhance extraction processes, develop more effective cultivation methods, and potentially create new applications for algal oil. Thus, giving them a technological edge. Customers gravitate to international brands due to their reputation for consistency and quality. This is a potential selling point, particularly in new areas where customers might not know about algal oil.
Tier 2 companies have a limited value share of 11%. These companies are regionally known and they target the regional demands and particular applications within sectors like nutraceutical, food, or animal feed. Additionally, companies are partnering with local distributors, established players, and ingredient suppliers for certain market segments to increase their reach.
Tier 3 algae oil market players with dense local presence account for 59% value share. Local players are partnering with research institutes, local farmers, and distributors to strengthen their distribution network, supply chain, and access to knowledge to improve their production efficiency. Further, players in this category are creating stronger bonds with local communities, emphasizing job creation and sustainable practices. This attracts environmentally conscious consumers and enhances brand loyalty.
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Key nations that are evaluated in this section are Germany, the United States, Italy, India, and Indonesia. All these markets have a similar growth rate, demonstrating a consistent uptake of the product.
Further, these sales trends also signify the potential of algal oil is yet to be fully explored. Key obstacles related to the production processes’ efficiency and consequent high production costs are pulling the growth back.
| Countries | CAGR 2024 to 2034 |
|---|---|
| United States | 3.5% |
| Germany | 3.8% |
| Italy | 4.3% |
| India | 3.8% |
| Indonesia | 3.9% |
The United States algae oil market is expected to register a CAGR of 3.5% through 2034. The industry is rising in part due to the widespread prevalence of chronic disorders as well as allergies to synthetic substances. This is because such issues are influencing potential customers to opt for foods made of natural components like algae oil.
The incorporation of algal oil is preferred in natural food products as it elevates the product’s health aspect. Several players are concentrated in this sector, which is improving the value share of this nation.
The United States is also experiencing a population surge of vegetarians and vegans. This population is ensuring their daily recommended intake of omega-3 EPA + DHA by investing in algae omega soft gels or solutions as they support the eye, brain, heart, and immune system. Growing knowledge about the same is predicted to raise product sales.
The algae oil market in Italy is predicted to surge at a 4.3% CAGR through 2034. Microalgae oil is being viewed as a promising resource to enhance the feed with necessary nutrients and maximize farmed fish nutrition.
Companies like Skretting Italia S.p.A. have planned to deploy this ingredient due to its massive potential in its products. Further, the use of microalgae oil resonates with this company, as it embraces innovative solutions that enhance fish feed quality while ensuring animal welfare and environmental sustainability.
The algae oil market in India is projected to progress at a 3.8% CAGR over the forecast period. Key players in the sector are offering algal oil advertised as a vegan product to tempt vegan users.
Customers seeking improvement in hair, skin, heart, eye, and brain health are recommended algal oil by specialists. This plant-based fish oil alternative is commonly used in dietary supplements to support cardiovascular health, brain health, and overall wellness. All these factors are propelling the use of algal oil in the country.
The following section casts a light on the leading segments. The cosmetic grade of algae oil is expected to account for a 34.6% value share in 2024. Based on application, the food and beverages segment is anticipated to hold a 28.6% share in the same year.
| Segment | Cosmetic Grade (Grade) |
|---|---|
| Value Share (2024) | 34.6% |
The cosmetic grade segment is projected to hold a 34.6% share in 2024. Algae oil, especially from certain species, has components that are desirable in cosmetics. Algal oil is replete with omega-3 and other fatty acids, antioxidants, vitamins, and minerals that hydrate and nourish the skin as well as decrease the signs of aging. This is increasing the product’s use in cosmetics.
| Segment | Food and beverages (Application) |
|---|---|
| Value Share (2024) | 28.6% |
The food and beverage segment is expected to acquire a 28.6% value share in 2024. The segment holds a prominent share in the industry owing to food and beverage players’ efforts to fortify their products with health-enhancing ingredients. Algae oil emerges as just the right choice for that. The product is easily incorporated into products like bakery items, beverages, and dairy alternatives like yogurts and plant-based milk.
Algae oil manufacturers are expanding in areas like functional foods, dietary supplements, and nutraceuticals, where demand for omega-3 and other nutritional benefits from algal oil is solid. Growing consumer interest in products associated with health and wellness is expected to boost sales from the nutraceutical, dietary supplement, and functional food domains.
Players are further investing in innovative cultivation technologies and extraction processes to curtail production costs and boost efficiency. Thus, making algal oil competitive with present options. Besides, companies are expanding into regions like Asia Pacific, where growth is significant owing to increasing disposable income and rising health awareness. They are either forming partnerships in these regions or setting up their operations.
Industry Updates
In terms of grade, the industry is divided into feed grade, food grade, fuel grade, and cosmetic grade.
Different applications of the product are food and beverages, animal feed, pharmaceuticals, dietary supplements, personal care, biofuels, and others.
The product is sold via direct sales and retail sales. The retail sales segment is further divided into hyper/supermarkets, specialty stores, online, and other retail formats.
The report tracks algae oil sales across several continents like North America, Latin America, Europe, East Asia, South Asia, the Middle East and Africa, and Oceania.
The industry size is expected to reach USD 2,442 million in 2024.
The sector is projected to increase at a 3.7% CAGR from 2024 to 2034.
The sector is poised to reach USD 3,495.8 million by 2034.
Italy is forecast to propel at a 4.3% CAGR through 2034.
The food and beverages segment holds a massive value share in this sector.
1. Executive Summary 2. Industry Introduction, including Taxonomy and Market Definition 3. Market Trends and Success Factors, including Macro-economic Factors, Market Dynamics, and Recent Industry Developments 4. Global Market Demand Analysis 2019 to 2023 and Forecast 2024 to 2034, including Historical Analysis and Future Projections 5. Pricing Analysis 6. Global Market Analysis 2019 to 2023 and Forecast 2024 to 2034 6.1. Grade 6.2. Application 6.3. Sales Channel 7. Global Market Analysis 2019 to 2023 and Forecast 2024 to 2034, By Grade 7.1. Feed Grade 7.2. Food Grade 7.3. Fuel Grade 7.4. Cosmetic Grade 8. Global Market Analysis 2019 to 2023 and Forecast 2024 to 2034, By Application 8.1. Food and Beverages 8.2. Animal Feed 8.3. Dietary Supplements 8.4. Pharmaceuticals 8.5. Personal Care 8.6. Biofuels 8.7. Others 9. Global Market Analysis 2019 to 2023 and Forecast 2024 to 2034, By Sales Channel 9.1. Direct Sales 9.2. Retail Sales 9.2.1. Hyper/Supermarkets 9.2.2. Specialty Stores 9.2.3. Online 9.2.4. Other Retail Formats 10. Global Market Analysis 2019 to 2023 and Forecast 2024 to 2034, By Region 10.1. North America 10.2. Latin America 10.3. Western Europe 10.4. South Asia and Pacific 10.5. East Asia 10.6. Middle East and Africa 11. North America Sales Analysis 2019 to 2023 and Forecast 2024 to 2034, by Key Segments and Countries 12. Latin America Sales Analysis 2019 to 2023 and Forecast 2024 to 2034, by Key Segments and Countries 13. Western Europe Sales Analysis 2019 to 2023 and Forecast 2024 to 2034, by Key Segments and Countries 14. South Asia and Pacific Sales Analysis 2019 to 2023 and Forecast 2024 to 2034, by Key Segments and Countries 15. East Asia Sales Analysis 2019 to 2023 and Forecast 2024 to 2034, by Key Segments and Countries 16. Middle East and Africa Sales Analysis 2019 to 2023 and Forecast 2024 to 2034, by Key Segments and Countries 17. Sales Forecast 2024 to 2034 by Grade, Application, and Sales Channel for 30 Countries 18. Competition Outlook, including Market Structure Analysis, Company Share Analysis by Key Players, and Competition Dashboard 19. Company Profile 19.1. Algae Floating Systems, Inc. 19.2. Cargill 19.3. Algae Production Systems 19.4. Lonza Group 19.5. Algatech Ltd. 19.6. Seaweed Energy Solutions 19.7. Royal DSM 19.8. Algix LLC 19.9. Cyanotech 19.10. Pond Technologies Inc.
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Algae Oil Market
