Algae Oil Market size will depict substantial expansion through 2028 with rising demand for improved animal feed grade and use in the food and beverage sector. Besides, biofuel will be a lucrative application as algae are an essential biomass source. Algae-based biofuel can be a replacement for oil-based fuels and are among the fastest-growing segments globally.
Algae oil is made from marine algae and is used in enhancing vision in people with a certain eye condition as well as lowering cholesterol. It is also used as a specialty oil owing to low saturated fat content. Algae oil has gained prominence in dietary supplements.
Based on grade, the algae oil market share from feed segment is anticipated to register a notable CAGR during the forecast period 2022-2028. Given that algae oil provides more nutritional value as compared to grain feed, it has led to increased consumption from the animal feed sector. It is used to provide nutrition for animals since the oil contains proteins and micronutrients as primary ingredients.
In terms of application, the food and beverage sector will witness considerable use of algae oil over the coming years. Its considerable nutritional profile and the popularity of omega 3 ingredients have contributed to the trend for algae oil. Algae oil will remain a sustainable alternative to fish oil owing to the limitations on fish oil production.
On the basis of end-user, pharmaceuticals are likely to be the major consumer of algae oil. It is highly regarded in drug development and is a varied source of pharmacologically active natural products. A slew of products is derived from algae oil, including antivirals, antifungals, therapeutic proteins, drugs, and antimicrobials. More importantly, sustainability need in drug development will work in favor of algae oil suppliers.
With respect to geography, North America algae oil market share will observe notable growth potential up to 2028. Biofuel, in particular, has become a lucrative option owing to low sulfur-emitting fuel production method. The low-carbon footprint of biofuel will drive the penetration of algae oil in the regional energy sector. Organizations have come forward in the U.S. to enable the commercialization of algae biofuels. For instance, the Energy Independence and Security Act set goals of up to 36 billion gallons of biofuel by 2022.
Leading companies in the global algae oil market are expected to invest in R&D, product launches, and collaborations. Some of the industry participants are Cargill, Lonza Group, Seaweed Energy Solutions, TerraVia Holdings, Royal DSM, Cyanotech, Algix, Alltech, Diversified Energy and DIC, among others.
A dramatic shift in the consumption pattern has hampered the demand-supply of animal feed products. Given the consumption of algae oil by the food and beverage sector, closures of restaurants had severely affected the industry in 2020. However, companies are expected to witness improved algae oil production levels during the forecast period 2022-2028.
Robust demand from the pharmaceutical sector will stimulate the algae oil industry outlook. A rise in vegan population and biofuel production will foster the algae oil consumption. The next few years will witness increased penetration of the ingredient across dietary supplements as people have realized the need to maintain vitals and boost immunity.