Algal Oil Market

Algal Oil Market Outlook (2024 to 2034)

The global algal oil market is projected to generate a revenue of US$ 2.35 billion in 2024 and climb to a value of US$ 3.72 billion by the end of 2034. The market has been forecasted to expand at 4.7% CAGR from 2024 to 2034.

The algal oil market size is expanding steadily due to its versatility and advantages over traditional sources of omega-3 fatty acids. Demand for algal oil is increasing from various industries such as food & beverages, personal care & cosmetics, nutraceuticals, biofuels, and several others. Algal oil is a plant-based source of omega-3 fatty acids, which attracts vegetarians and vegans. It is thus being widely used to fortify products such as beverages and dairy alternatives with plant-based alternatives to animal-derived nutrients.

Governments in several countries are taking initiatives such as increasing research & development activities in renewable energy sources, including algae biofuels. This is positively impacting algal oil demand growth as it is gaining popularity as a replacement for conventional fossil fuel-based oils.

Key Market Growth Drivers

• Algal oil is gaining popularity among vegan and vegetarian consumers since it is a plant-based source of fatty acids, which is an essential nutrient for the human body.
• Algal oil market growth is being driven by its increasing application in the nutraceutical industry, in products such as dietary supplements due to its health benefits.
• Demand for algal oil as a biofuel feedstock is increasing due to several countries trying to reduce their carbon emissions and focus on using renewable energy resources.
• One of the key algal oil market trends opening up new opportunities is the growing focus on improving the scalability and efficiency of algal oil production and making the process more budget-friendly.
• Utilization of algal oil is rising in the pharmaceutical industry due to its use in producing DHA-based capsules. This application is being boosted by the rising prevalence of macular degeneration, which is an age-based vision loss disorder.
• Algal oil is also widely used in the personal care & cosmetic industry to manufacture products such as moisturizers, shampoos, skin creams, serums, and many others.
• In the specialty chemical industry, algal oil has become an essential component in products such as paints, coatings, adhesives, and others.

Report Attribute	Detail
Algal Oil Market Size (2024E)	US$ 2.35 Billion
Forecasted Market Value (2034F)	US$ 3.72 Billion
Global Market Growth Rate (2024 to 2034)	4.7% CAGR
North America Market Value (2024E)	US$ 557.5 Million
East Asia Market Growth Rate (2024 to 2034)	5% CAGR
Fuel Grade Segment Value (2034F)	US$ 2.56 Billion
Organic Segment Value (2034F)	US$ 2.28 Billion
Key Companies Profiled	AlgiSys LLC; Progress Biotech; Polaris; Inlife Care; Archer Daniels Midland Company (ADM); Algalr NutraPharms Pvt. Ltd.; Royal DSM; Bioriginal Food & Science Corp.; Vegan Vitality; Mara Corporation.

Will the Personal Care & Cosmetics Industry Provide Growth Opportunities to Algal Oil Manufacturers?

“Algal Oil Comes With Moisturizing and Anti-Inflammatory Properties”

Use of algal oil is increasing in the production of personal care & cosmetic products due to beneficial factors such as it being rich in omega-3 fatty acids, which provide moisturizing and anti-inflammatory properties. Because of these advantages, it is becoming a preferred choice, particularly for skincare products. Algal oil is famous for its high antioxidant content, which helps in protecting the skin from environmental damage and premature aging.

Additionally, it is known to be non-comedogenic, meaning it does not clog pores, which makes it suitable for various skin types including oily and acne-prone skin. Because of such advantages, personal care and cosmetics manufacturers are widely using algal oil in their products, which is contributing to global algal oil market expansion.

What is a Key Concern in the Market for Algal Oil?

“High Cost Compared to Most Fish Oils”

In comparison with fish oils, algal oil is usually higher in price, which is becoming a key challenge for algal oil manufacturers and suppliers. Modern machinery is needed to extract oil from algae, and a research and development team oversees every step of the process from cultivating the algae to extracting the oil to ensure optimal results.

To produce algal oil, companies also need to search the entire globe for standardized, high-quality strains of algae. This cumulative process of producing algal oil requires a substantial financial outlay and experts with in-depth knowledge of premium algae, which drives up production costs and limits market expansion.

Country-wise Insights

The North American region is expected to lead with 23.7% of the global algal oil market share in 2024. The growing use of algal oil in various industries such as food & beverages, biofuels, and pharmaceuticals is driving market growth in the region. Growing emphasis on the commercialization of algal oil due to its potential as a renewable and eco-friendly alternative to various traditional oil sources in East Asian countries such as China, Japan, and South Korea is creating new opportunities for producers.

Why is Demand for Algal Oil on the Higher Side in the United States?

“Growing Utilization in Pharmaceuticals and Nutraceuticals”

Attribute	United States
Market Value (2024E)	US$ 247 Million
Growth Rate (2024 to 2034)	5.1% CAGR
Projected Value (2034F)	US$ 407.4 Million

Established, sizeable industries in the United States such as pharmaceuticals and nutraceuticals are boosting the demand for algal oil. The use of algal oil is rising in these industries due to its various health and environmental advantages. Algal oil is rich in omega-3 fatty acids, particularly DHA and EPA, which are known for their cognitive benefits and heart health.

Growing trend of veganism in the United States is driving the utilization of algal oil in these applications as an alternative to fish oil. Additionally, algal oil is considered to be more environment-friendly compared to fish oil as it does not lead to overfishing or disrupt marine ecosystems.

What is the Market Scenario for Algal Oil in South Korea?

“Algae Oil-Based Personal Care Products Gaining Popularity”

Attribute	South Korea
Market Value (2024E)	US$ 118 Million
Growth Rate (2024 to 2034)	5.4% CAGR
Projected Value (2034F)	US$ 200.4 Million

Sales of algal oil are increasing in South Korea due to its well-established personal care industry, which is popular across the globe. Algal oil is considered good for the skin; it helps to soften the skin and holds anti-aging properties. It also supplies energy to skin cells, as it holds substances such as amino acids, mineral salts, vitamins, and useful trace elements, due to which its utilization is increasing in personal care products. Algal oil-based personal care is particularly gaining popularity among women, as it helps with skin aging-related issues.

Category-wise Insights

Based on application, the market is segmented into food & beverages, personal care & cosmetics, pharmaceuticals, animal feed, nutraceuticals, and biofuel. The food & beverages segment holds a significant market share due to the increasing efforts of F&B manufacturers to fortify their products with health-improving components.

Which Grade of Algal Oil Accounts for Significant Market Share?

“Fuel Grade Algal Oil Sustainable and Renewable Substitute to Fossil Fuels”

Attribute	Fuel Grade
Segment Value (2024E)	US$ 1.62 Billion
Growth Rate (2024 to 2034)	4.7% CAGR
Projected Value (2034F)	US$ 2.56 Billion

Fuel grade algal oil is projected to account for 68.8% of the worldwide market in 2024. Demand for fuel grade algal oil is increasing due to it being considered a sustainable and renewable alternative to fossil-based oil. Concerns regarding food security are also allayed by the fact that the production of algal oil does not compete with food crops for arable land. Algal oil also lowers greenhouse gas emissions when compared to conventional fossil fuels.

Fuel grade algal oil consumption is predicted to increase further as the world looks to lessen its reliance on non-renewable energy sources. Also, continued research & development in this area is resulting in more economical and efficient manufacturing techniques, which is increasing demand for this exciting alternative fuel.

Why is Consumption of Organic Algal Oil Higher Compared to Conventional Variants?

“Consumers and End-Use Industries Alike Preferring Organic Ingredients”

Attribute	Organic Oil
Segment Value (2024E)	US$ 1.45 Billion
Growth Rate (2024 to 2034)	4.6% CAGR
Projected Value (2034F)	US$ 2.28 Billion

Demand for organic algal oil is higher and also increasing at a better pace in comparison with the conventional segment. Organic products are produced through high-quality and pure algae and processes that do not use any synthetic pesticides, genetically modified organisms, or herbicides. They are thus considered an environmentally friendly solution. Because of this reason, organic algal oil is a popular choice among industries as well as consumers.

People are getting drawn to organic algal oil due to its high fatty acid content and various health benefits such as heart health and anti-inflammatory properties.

Competitive Landscape

Key players in the algal oil industry are using various approaches and primarily focusing on selecting high-yield algal strains and enhancing cultivation methods to increase the efficiency of oil production. Companies are spreading into different domains by launching products using algal oil such as dietary supplements, food additives, and biofuels.

• In February 2024, at the Natural Products Expo West event in Anaheim, California, GC Rieber VivoMega announced the debut of their premium VivoMega EPA+DHA Algae 2050 TGP Oils for the North American market.
• In May 2022, at the Vitafoods Expo-2022 in Geneva, Progress Biotech debuted its newest product, high-DHA algal oil with EU Organic Certification. Producing a complete line of DHA algal oil products, the company aims to rival existing omega-3 supplements in terms of stability and sensory qualities.
• In October 2023, Nordic Naturals, a leading provider of omega-3 supplements, introduced its new vegetarian Algal Omega brand in response to consumer demand for products that provide long-chain omega-3 fatty acids EPA and DHA without the use of fish.

Fact.MR provides detailed information about the price points of key manufacturers of algal oil positioned across the world, sales growth, production capacity, and speculative technological expansion, in this new market report.

Segmentation of Algal Oil Market Research

• By Grade :

  • Food
  • Feed
  • Fuel

• By Nature :

  • Organic
  • Conventional

• By Application :

  • Food & Beverages
  • Personal Care & Cosmetics
  • Pharmaceuticals
  • Animal Feed
  • Nutraceuticals
  • Biofuel

• By Region :

  • North America
  • Western Europe
  • Eastern Europe
  • Latin America
  • East Asia
  • South Asia & Pacific
  • Middle East & Africa