As of 2016, Philippines are the one of the largest coconut oil producer in the world. However, in the recent years there is a shift in preference for coconut oil in the country. Coconut oil now is majorly exported from the country and is used less for consumption purposes. The shift in preference of cooking oil is has been on account of palm oil being cheaper and superior in nutrient content in comparison to the coconut oil.
Over the years there has also been a shift in preference in the purchase point of cooking oil in the market. The preference of purchasing cooking oil has shifted towards supermarkets from traditional markets.
Also, the trend of using healthy cooking oil with low cholesterol level has emerged giving way to the use of other cooking oils including canola oil, soybean oil and corn oil.
Philippines produce coconut oil domestically but are dependent on its imports for palm oil, canola oil, soybean oil, corn oil and others.
The residential sector in Philippines purchase cooking oil from the traditional markets (sari-sari stores/mom & pop stores, wet markets) and supermarkets On the other hand, the hotel chains purchase cooking oil from the distributors while the food manufacturers purchase cooking oil in bulk quantity from cooking oil manufacturers directly.
The major types of cooking oil used in Philippines include palm oil, coconut oil, soybean oil, canola oil and corn. Palm oil is the most popularly used cooking oil in Philippines on account of being less expensive than the other cooking oils in the Philippines cooking oil market. The increase in the market for packaged food products from USD ~ million in 2011 to USD ~ million in 2016 has led the growth of cooking oil in the country. Consumption of cooking oil in Philippines has amplified from ~ thousand tons in 2011 to ~ thousand tons in 2016.
How Have Different Segments in the Market Performed?
By Type of Cooking Oil: The different type of cooking oil in the Philippines cooking oil market include palm oil, coconut oil, soybean oil, canola oil, corn oil and others. The palm oil has gathered the largest share of ~% in the Philippines Cooking oil Market with a consumption of ~ Thousand Metric Tons in 2016. Philippines have been one of the largest producers of coconut oil globally but its share in the domestic consumption remains lower to around ~% during 2016.
Canola oil is only preferred by high income customers which are extremely health conscious as it is expensive than other oils. Canola oil and corn oil have captured a consumption volume share of ~% and ~% respectively during 2016.
By Distribution Channel: These traditional markets have accounted for the share of ~% in the consumption volume during 2016 as they provide products at lower prices than those in supermarkets. The direct sale by manufacturers/traders and distributors has accounted for the second largest share of ~% in the total volume sales of cooking oil in Philippines. On the other hand, Supermarkets and hypermarkets have gathered a volume share of ~%. Online channels have accounted for the lowest share of ~% in the total volume sales in Philippines during 2016.
By End User: The end-users in the Philippines palm oil market include the commercial and the residential sector. The cooking oil consumption from commercial sector includes the Manufacturers of packaged foods, Hotel Chains and Hawkers. The Commercial Sector has accounted for the lion’s share in the total consumption volume of cooking oil in Philippines during 2016. This has been on account of the bulk purchases made by these entities. The cooking oil consumption from residential sector includes the consumption of the households. The Residential Sector has comprised of a minor share of only ~% in the total consumption volume of cooking oil in Philippines during 2016. As of December 31st, 2015, there are ~ households in Philippines (Philippines Statistics Authority)
By Region: The Luzon region in Philippines has gathered the largest share of ~% in terms of total consumption volume of cooking oil. The major reason behind this has been that this region comprises of highest number of hotels, guest houses and households in Philippines. As of 4th December 2017, there are ~ hotels, ~ guest houses, ~ specialty lodging and ~ holiday rental units. Visayas and Mindanao on the other hand have gathered a consumption share of ~% and ~% in 2016 respectively.
Trends and Developments in Philippines Cooking Oil
The Philippines Cooking Oil Market has witnessed a shift in preference among the usage of coconut oil to the use of palm oil over the past five years. The major reason for the shift in the preference is that the coconut is subject to large scale fluctuation in its prices while the price fluctuations in the palm are comparatively less. In the observed period the price of coconut oil fluctuated from PHP ~ per litre in 2011 to very low price of PHP ~ per litre in 2013 to again at PHP ~ per litre in 2016. On the other hand, the of palm oil initially saw a great decline from PHP ~ per litre in 2011 to PHP ~ per litre in 2013 but was steady thereafter to PHP ~ in 2016
The traditional markets in Philippines include the wet markets, sari-sari stores and mom & pop stores. During 2016, these traditional markets have accounted for the ~% of the market share by volume sold as they provide products at lower prices than those in supermarkets. But over the past five years years(2011-2016) the share for these traditional markets seems declining as the supermarkets emerge as the go-to places instead of these traditional markets. The main reason for this change in trend is the strict government regulations against adulteration. The traditional markets sell products which are often adulterated with used oils and not of the desired quality
An increasing number of health conscious consumers in the age bracket 25-45 years combined with growing awareness about food contents with trans-fats, partially hydrogenated oils (PHOs), and cholesterol that are responsible for various chronic diseases are factors that have been fueling demand for cooking oils in Philippines
The increase in the consumption of packaged food products in Philippines has also driven the market for cooking oil in Philippines over the period 2011-2016. The growth of packaged food products especially
savory snacks including biscuits, potato chips and puffed snacks had uplifted the market for cooking oil in Philippines. In the period 2011-2016, the rise in the consumption of packaged food has shown an upward trend in the consumption of cooking oil by the food manufacturers to manufacture their products. The retail sales of packaged products displayed a positive CAGR of ~% in the period 2011 to 2016. The retail sales increased from USD ~ Million in the year 2011 to USD ~ million in the year 2016. Moreover, the trend of consuming health-friendly food has increased consumption of healthy packaged food products made of palm oil, canola oil and corn oil.
As of 2016, it has been evaluated that there are 350 Million coconut trees in Philippines out of which around 52 to 70 Million are aged coconut trees. These old trees produce very few nuts thus results in lower oil production in the country. Moreover, the country’s coconut production decreased by 15% from 14.8 Million Metric Tons in the year 2015 to 12.6 Million Metric Tons in the year 2016. The major reason for the 15% decline in the coconut production was due to the lingering effects of the typhoon- El Nino which hit the country in 2016. This has further constrained the coconut oil industry of the country during 2016.
How is the Competition Scenario?
The Philippines Cooking Oil Market is traditionally dominated by the unorganized sector companies on account of providing the cooking oil at a lower cost than the organised players in the Industry. The unorganized sector includes the wet markets and mom and pop stores. The major organised players include Minola, Golden Fiesta, Baguio, Marca Leon and others. The organised players face tough competition from the unorganized market entities. These organized players compete majorly on the basis of price, packaging and types of products offered. The different types of cooking oils offered by the major players include palm oil/ olein, coconut oil, soybean oil, canola oil, corn oil and others. The cooking oil is packaged and distributed various sizes as per the preferences of the end-users and demand.
Future Outlook of Philippines Cooking Oil Market
It has been anticipated that the consumption of cooking oil will rise from ~ thousand tons in the year 2017 to ~ Thousand Tons in the year 2019. The expected increase in the demand for cooking oil will be on account of the amplifying number of households in the country. The total number of households are expected to increase from ~ Million 2017 to ~ Million in 2019. In the long term the market for cooking oil in Philippines is anticipated to increase from ~ thousand tons in the year 2019 to ~ thousand tons in the year 2021. The major growth in the Philippines food manufacturing industry in the period 2019-2021 will increase Philippines cooking oil market. The food manufacturing industry is estimated to grow from USD ~ Million in 2019 to USD ~ Million in 2021. Canola oil and blended oils will be the upcoming oils in the country. The market for palm oil has been anticipated to have the highest consumption volume share of ~% in the overall market by 2021. The share for the coconut oil in the Philippines cooking oil market is anticipated to decrease to ~% in 2021.
Key Topics Covered in the Report:
Soybean Oil Exports Philippines
Cooking Oil Market in Philippines
Palm Oil Consumption Philippines
Baguio Oil Coconut Oil Philippines
Philippines Palm Oil Future
Edible Oil Market Philippines
Export Coconut Oil Philippines
For more information on the research report, refer to below link:
Related Reports by Ken Research
Ankur Gupta, Head Marketing & Communications