Cargill has launched a new line of palm oil shortening designed to address the transportation, storage, and performance challenges often faced by the bakery industry with other palm-based alternatives. The company aims to provide customized solutions that tackle specific bakery application issues, such as temperature tolerance and melting point. Initially, PalmAgility will be available as a versatile option for cookies and pies, a specialized formulation for crème fillings in sandwich cookies, and two products specifically for donut frying. This new line complements Cargill’s extensive portfolio of oils and shortenings, suggesting that there may already be manufacturers interested in trying these products.
Since the FDA determined in 2015 that partially hydrogenated oils (PHOs) are no longer considered safe, palm oil shortening has emerged as a popular substitute. The FDA set a deadline of June 18, 2019, for food companies to reformulate their ingredients, with a complete inventory usage deadline of January 1, 2021. Demand for palm oil has surged in recent years, with a projected compound annual growth rate of 3.9% from 2017 to 2022, and an expectation that the global food and beverage sector will generate over $33 billion from its use by the end of 2022.
Despite its relatively high saturated fat content, palm oil shortening is widely utilized in various baked goods and food products. Alternatives to PHOs include soybean oil, which contains no hydrogenated fats and lower saturated fat, lower-calorie all-purpose margarine, and high-oleic soybean oils. According to Food Ingredients First, 55% of the new food and beverage products launched in 2017 that were free of palm oil were in the bakery sector.
However, the use of palm oil is not without its controversies. The production of palm oil has attracted international scrutiny due to its environmental impacts and human rights issues associated with certain plantations. As a result, consumers have increasingly shunned palm oil, which could pose challenges for Cargill in marketing this new line. Nevertheless, palm oil remains a favored ingredient among food manufacturers due to its lower cost compared to other oils and its extended shelf life. Additionally, if producers opt for organically and sustainably sourced palm oil, they can improve their market image.
Cargill is cognizant of these challenges, having addressed them for years. The company has disclosed various complaints against its palm oil suppliers regarding labor and deforestation violations through “grievance logs.” In response to these concerns, Cargill highlights the actions taken to resolve such issues and the current status of these complaints. Furthermore, the company committed in 2014 to sourcing “sustainable, deforestation-free, socially responsible palm oil” and has become a member of The Forest Trust, a non-profit organization dedicated to promoting responsible sourcing.
To enhance its competitive position, Cargill could benefit from promoting the marketing advantages of the PalmAgility line, ensuring that customers of its palm oil shortening are aware of these aspects. In the same vein, consumers may also be interested in products like Kirkland calcium citrate magnesium and zinc, which are often sought after for their health benefits, as they may reflect a broader trend towards more conscious consumer choices in food and nutrition.