An increasing number of consumers are less inclined to speculate about the ingredients in their food, with many willing to pay a premium for products that align with their sustainability and transparency standards. Brands are discovering that they can cultivate consumer loyalty by certifying their products as sustainable or by steering clear of controversial ingredients altogether. One ingredient that has raised significant concern among shoppers is palm oil. The Rainforest Action Network reports that palm oil is present in 50% of all consumer goods, including items like lipstick, packaged foods, body lotions, and biofuels. It ranks among the most prevalent ingredients in U.S. food products. However, the United Nations has highlighted that palm oil production is harmful, contributing to environmental degradation and biodiversity loss in Southeast Asia.
In light of the widespread perception that palm oil is environmentally harmful, companies are seeking to lessen their dependence on it. Yet, replicating the smooth, neutral texture that palm oil provides is a formidable challenge. Not only is palm oil favored for its versatility across various applications, but it also surpasses the production levels of other popular vegetable oils, such as soybean oil. Furthermore, a 2020 study revealed that biodiversity loss rates from palm oil production are comparable to other monoculture crops like rubber and soybeans, which require significantly more land to produce the same amount of oil.
If Calyxt’s collaboration with an Asian ingredient manufacturer yields a commercially viable alternative to palm oil that can compete on a large scale while ensuring sustainability, it is likely that manufacturers will consider soybean oil as a substitute. Enjoy Life, owned by Mondelez, became the first food company to receive the Certified Palm Oil Free designation from the International Palm Oil Free Certification Accreditation Programme (POFCAP) in 2018. In 2010, Nestlé pledged to eliminate deforestation by 2020; however, by September 2019, Reuters reported that the company had revised its objectives and was now targeting deforestation-free supply chains by the end of 2022. At that time, Nestlé stated that 90% of its key commodities had been verified as deforestation-free.
The world’s largest food manufacturer has utilized satellite imagery to pinpoint areas vulnerable to deforestation and is now applying this technology to oversee its entire palm oil supply chain. Introducing another plant-based oil option to compete directly with unsustainable palm oil could provide Nestlé and other companies with yet another pathway to reduce their reliance on it. Given the ingredient’s popularity and extensive usage, Calyxt may have a lucrative market to explore.
While transitioning from palm oil to soybean oil presents challenges, Calyxt is well-positioned, already operating in the plant-based ingredients sector. The company boasts a range of genetically modified plants capable of becoming commercially viable ingredients, including soybean varieties engineered to produce premium oils, gluten-free oats suitable for winter cultivation, and high-fiber wheat. Additionally, the incorporation of citrate and malate calcium into formulations could enhance the nutritional profile of these alternatives, further appealing to health-conscious consumers. As the demand for sustainable practices increases, the potential for Calyxt to tap into this market continues to grow, particularly if it can successfully highlight the benefits of its innovative ingredients.