A method for separation of fatty acid from a mixture having fatty acid, the corresponding acyl lactylate and lactic acid, method having steps of: a) providing dispersion of mixture in polar carrier; b) adjusting dispersion mixture to pH from 5-9; and, c) extracting fatty acid from dispersion carrier mixture into solvent immiscible with polar carrier, obtaining fatty acid solution and aqueous raffinate having lactic acid and fatty acid lactylate. Polar carrier has from 70-100 wt. % of water and from 0-30 wt. % of one or more miscible, polar co-solvents. Aqueous raffinate may be further processed by: i) acidifying raffinate to pH from 0-3; and, either ii)a) allowing acidified raffinate to separate into two layers and separating lower, aqueous layer from residual layer of acyl lactylate, or ii)b) extracting fatty acid lactylate from acidified raffinate into second solvent which is immiscible with aqueous raffinate, obtaining an acyl lactylate solution.