Specialty fats and oils, (sometimes called alternative fats and oils) are increasingly being used as substitutes for more traditionally used confectionery ingredients such as cocoa butter, butter, milk fats and palm oil.
Indeed, research companies, including LMC, Markets and Markets, Euromonitor, and Innova, project that global demand for specialty fats such as shea butter, mango kernel, illipe butter, kokum kernel and sal which are used as replacements for cocoa butter in confectionery will grow 4-5% year on year.
Why? In some cases it’s down to growing demand for ingredients that are animal-free. The global vegan chocolate market is anticipated to reach $2 billion by 2032, meaning many chocolatiers are motivated to replace the milk powder, butterfat, cream and whey powder in their products.
Improved functionality of speciality fats
Other manufacturers are turning to alternative fats because they not only mimic the unique properties of typical industry ingredients, but in some cases offer improved functionality and versatility such as heat resistance. This is especially important for brands looking to expand into more temperate parts of the world. “It’s really important for customers in regions like the Middle East,” says Natasha Orlova, vice president, global specialty fats lead at ingredients supplier, Cargill. “A warm climate makes the melting of chocolate products a top concern.” says Orlova.
Alternative fats and oils can also enable easier production for food manufacturers by eliminating the need for tempering during manufacturing without losing the ‘snap’ that consumers expect.
Using alternative fats to cut costs
Perhaps the most significant driver behind the rise, is that it can help cut costs.
“Demand is growing for specialty fats because they allow for more efficient and cost-effective innovation,” says Orlova. Indeed, innovation in the confectionery industry has never been more urgent. With cocoa prices at unprecedented highs, creating cocoa alternatives is “inevitable because continuing to cultivate cocoa under current conditions is unsustainable”, according to the UK’s UCL University.
The global scale-up of speciality fats
To respond to this need, Cargill has invested in a $50 million expansion of its plant in Port Klang, Malaysia to scale up its edible oil processing. When it is completed later this year, Cargill will supply finished specialty fats to consumers throughout Asia-Pacific and semi-finished products to the company’s edible oils facilities in Europe, South America, and North America. It’s the start of a $150 million, three year global investment program that reflects Cargill’s assumption that the upward trajectory of alternative fats and oils is set to continue. “Global confectionery product demand is expected to keep growing steadily, and customers are searching for more stable pricing and less supply volatility,” says Orlova.