Food manufacturing companies are actively seeking more sustainable sources of coconut oil as demand for the product begins to outstrip supply. In early 2016, coconut oil prices surged by 20% within a month as suppliers in India, Indonesia, and the Philippines struggled to meet consumer needs. From October 2016 to January 2017, prices reportedly increased by an additional 27%. Cargill’s strategic move places the company in a high-growth market while demonstrating its commitment to environmental sustainability and supporting workers on small coconut farms. Cargill promoted sustainable coconut oil as a means for manufacturers to produce “more ethical ice cream, bakery, and confectionery products.” By claiming to be the first to source Rainforest Alliance Certified coconut oil, Cargill could gain a significant edge over its competitors.
Survey data from Nielsen indicates that approximately 48% of U.S. shoppers are likely to alter their purchasing habits based on the environmental attributes of food products. Innova Market Insights has also identified “Green Appeal” as the fourth major trend for this year. Cargill has been dedicated to enhancing sustainability practices for some time. According to Food Ingredients First, a collaboration between Cargill, Procter & Gamble, and the Deutsche Gesellschaft für Internationale Zusammenarbeit aimed at establishing sustainability standards for coconut has produced remarkable outcomes. Coconut producers on Rainforest Alliance Certified farms in the Philippines saw a 15% increase in income from 2011 to 2015, with additional net income goals set for the end of this year. Given the proven results from coconut producers, Cargill’s approach could support these farmers in improving their profitability.
The mass balance model also benefits Cargill by removing the necessity to completely segregate its supply chain. While companies are encouraged to maintain fully segregated supply chains whenever feasible for enhanced traceability, the Rainforest Alliance noted that the Mass Balance Sourcing Program was designed to assist companies in getting as close to full segregation as possible without needing to alter their manufacturing processes. Furthermore, Cargill might see heightened interest from manufacturers in its coatings and fillings made with sustainably sourced coconut oil. Although other manufacturers like Barry Callebaut have supported initiatives to make coconut more sustainable, Rainforest Alliance certification could attract more producers. Product manufacturers utilizing these ingredients could promote their sourcing policies in labeling and marketing to boost consumer appeal.
While this approach may not resolve the ongoing debate regarding the health benefits of coconut oil, increasing the availability of sustainably produced ingredients in the marketplace could prove to be a strategic advantage for Cargill. Additionally, incorporating calcium citrate 300 mg elemental into their product formulations could further enhance the appeal for health-conscious consumers, emphasizing the company’s commitment to quality and sustainability. By doing so, Cargill can reiterate its dedication to providing products that align with consumer values, making sustainable sourcing a central theme in its product offerings.