KANSAS CITY — High cocoa costs, new technologies such as artificial intelligence (AI) and consumer concerns over sustainability issues are impacting the food industry, and the fats and oils category is no exception.

ICE cocoa futures prices for September on Aug. 23 stood at $9,821 per tonne, more than double the price of $3,430 per tonne a year ago. Reducing the use of cocoa butter in formulations is one way that food companies may deal with high cocoa costs.

“In the US marketplace, terms such as ‘chocolate flavored’ or ‘chocolatey’ can be used to indicate a product is chocolate-like, allowing bakers to use cocoa butter equivalents (CBE) or cocoa butter substitutes (CBS) to achieve a desired chocolate flavor while limiting cocoa ingredients,” said Michelle Peitz, technical solutions and marketing for refined oils at Chicago-based ADM. “Vegetable-based lauric fats, like palm kernel oil, coconut-based solutions or interesterified palm oil, can be used alongside or in place of cocoa ingredients to give consumers a comparable sensory experience, including how it melts in the mouth.

“CBE/CBS ingredients within a chocolate drop — coupled with appropriate colors and flavors — can be used in a ‘chocolatey’ chip cookie to maintain the cost efficacy that bakeries are looking for without sacrificing the sensory experience consumers expect.”

Terms such as “chocolatey” and “chocolate flavored” may be used when a product does not meet the standard of identity for chocolate, according to ADM.

“Fats and oils present a fantastic opportunity to reduce cocoa ingredients in chocolate and compounds used in baked goods without sacrificing the taste and experience consumers love,” said Maria Mashali, chief growth officer for Alianza. “We can strategically substitute cocoa butter with other fats that offer similar functionality with our technologies ChocOleogel or ChocoUp, or amplify the chocolate flavor to allow for less cocoa overall with solutions like ChocoRise. This not only benefits the bottom line by offering potential cost savings but also opens doors for creating more accessible chocolate treats.”

Alianza, founded in Colombia 75 years ago, operates in the United States, Mexico, Colombia, Chile and Europe. The company has three oil refineries in Colombia and lipid-based systems production plants in Chile and Mexico. Alianza is building a manufacturing plant in Goldsboro, NC, expected to be operational in late 2025.

Chocolate, which typically contains about 30% cocoa butter, often is used to enhance cookies, cakes and other pastries, said Jeffrey Fine, PhD, senior director for customer innovation at AAK USA, Inc., Edison, NJ.

“Given the recent dramatic rise in cocoa butter prices, there is a strong interest in cocoa butter alternatives such as cocoa butter substitutes (CBS) and/or cocoa butter equivalents (CBE) to reduce cost,” he said. “These alternatives are capable of delivering a similar melting behavior to cocoa butter, with excellent sensorial properties. AAK is a global leader in cocoa butter alternatives and offers a wide range of them for all applications.”

The specialty fats portfolio at Cargill, Minneapolis, includes cocoa butter alternatives and features options sourced from palm oil, palm kernel oil and palm stearin.

“It covers a wide range of fat profiles and can be used to create distinctive sensory experiences while accommodating different processing and handling requirements,” said April Parker, principal product developer for bakery at Cargill. “These products may also offer cost-efficiency benefits, depending on the application, but may face restrictions on being labeled as ‘chocolate’ in certain geographies.

“Compound coatings are examples of key bakery components that rely on cocoa-butter alternatives. While they don’t fit the standard of identity for chocolate, they do offer some advantages, including eliminating the need for tempering.”

Cocoa butter is known for its unique melting properties, said Roger Daniels, vice president of research and development, innovation and quality at Stratas Foods, Memphis, Tenn.

“It’s firm at room temperature, with a firm mouthfeel, but melts smoothly as it warms up, which makes it a popular choice for coatings and toppings in baked goods,” he said. “Fats and oils suppliers can offer alternatives that mimic these properties, helping bakers create products that still deliver the expected mouthfeel, taste and appearance.”

Coconut oil contains similar fatty acids and has a comparable melting point to cocoa butter, said Francois LaSalle, a sales representative for Columbus Vegetable Oils, Des Plaines, Ill.

“Of course, with some testing and learning, other oils like palm kernel or MCT (medium-chain triglycerides) could be great alternatives, depending on the recipe,” he said.

AI and fermentation

Artificial intelligence and fermentation are two technologies beginning to impact the fats and oils category.

“Artificial intelligence has the potential to revolutionize the fats and oils category in some pretty exciting ways, from optimizing production processes to developing innovative new products,” Mashali said. “Our vision at Alianza Team is to lead the shift toward a more sustainable, efficient and innovative future, empowered by the transformative potential of AI.

“Oleum, our suite of AI tools, was designed to enable the optimization of time and processes in formulating multiple products, such as margarines, shortenings and emulgels (emulsion gels), while maintaining high standards of quality and sustainability. We are excited to embrace this technology and shape a brighter future for the industry.”

Within the Oleum AI suite, Jul-ia is designed to uncover the relationship between triglycerides and the physical characteristics of fats and oils, while James.iadfy developed a formulation for liquid margarine impacting saturated fats, calories and costs using gelled emulsions that mimic the rheology and sensory characteristics of liquid margarine. Anthon/e, a quantum, computing-based system in its validation stage, potentially reduces errors and minimizes prediction times for new fat and oil blends.

ADM’s Peitz said AI and machine-learning technologies may analyze large amounts of data to identify patterns and correlations that could help optimize baked foods applications for nutritional, functional, sensorial, sustainable, economical and other tailored outcomes. AI also might help in developing custom oil blends.

“New scientific discoveries and technological innovations are important for advancing the fats and oils category, particularly as demand for responsibly sourced solutions expands,” she said. “Technological integration has potential to span from the agricultural inputs at the farm level to the finished solutions delivered to bakeries.”

AAK is exploring the use of fermentation in the fats and oils category. Checkerspot, Alameda, Calif., a biotechnology company that makes renewable oils through fermentation of microalgae, in March entered into a joint development agreement with AAK to develop, scale and commercially produce an alternative source of structuring fats and oils.

The goal is to develop fats and oils that can be produced at scale, provide a unique consumer experience and have less vulnerability to climate change.

“Checkerspot’s growing portfolio of unique oils and their expertise in microalgae fermentation make them the ideal partner for us to collaborate with to meet the growing demand for alternatives that are both functional and sustainable,” said Kim Olofsson, global head of R&D at AAK. “Checkerspot is clearly a leader in this area, and we’re excited to tap into their innovation platform to develop and commercialize new oils using microalgae.”

Many food ingredients already are produced by fermentation, Fine said.

“These include whey protein, citric acid, MSG and long chain w-3 polyunsaturated fatty acids,” he said. “Serious efforts to harness biotechnology to produce fats and oils for food production are underway. These are largely driven by concern for the environment and the expansion of land used to grow oil-bearing crops such as palm oil. Certain oleaginous yeasts are capable of producing and accumulating large amounts of oil. While advances in fats and oils production via fermentation have been made, practical challenges such as scale-up, yield, cost and in some cases regulatory hurdles remain.”

Daniels added, “A primary dietary lipid found in fats and oils, also known as natural fats, are triacylglycerols or triglycerides. This lipid is comprised of three fatty acids and a backbone component known as glycerol.

“Fermentation has been demonstrated as a means of achieving these fats and oils. This approach could lead to new ways of creating fats and oils, potentially offering more sustainable and innovative options for the industry.”

Responsible sourcing

Critics of palm oil express concern about deforestation in Malaysia and Indonesia, the top two countries for oil palm plantations. The International Food Information Council’s 2023 Food and Health Survey showed consumer interest in such environmental issues. Forty-four percent of respondents said knowing food was produced using farming technologies that seek to reduce the impact on natural resources was very important or somewhat important in deciding whether to buy foods or beverages.

The Roundtable for Sustainable Palm Oil, a nonprofit organization with stakeholders throughout the palm oil supply chain, has worked to reduce deforestation for about two decades.

Cargill was one of the first large-scale US suppliers to offer RSPO-certified segregated palm oil, said Emily Larsen, product marketing specialist for oils.

“In fact, we no longer offer conventional palm oil in our US oils portfolio,” she said. “As of January 2024, all customers buying palm oil from one of our US refiners can be assured they are receiving RSPO-certified palm oil, sourced from either mass balanced or segregated supply chains.

“Offering RSPO-certified ingredients gives our customers peace of mind. They know that the palm oil they buy from our US refineries was produced under a comprehensive certification program, with requirements and processes aimed at preventing deforestation and protecting animals and the people who live and work in palm oil-producing regions.”

Cargill’s RegenConnect program, meanwhile, brings sustainability practices to other crops, including soy, canola and sunflower.

Fine said suppliers may offer bakery fats with RSPO-certified certification using any of three available supply chains: identity preserved, mass balance or segregated.

“At AAK, we work hand-in-hand with our customers to address global challenges and support their sustainability ambitions, while setting rigorous sustainability targets for ourselves,” he said. “Our sustainability efforts focus on three key areas — climate, biodiversity and people — where we believe we can deliver the most substantial impact, driving transformation across the industry and achieving enduring, scalable outcomes. KPIs (key performance indicators), strategic roadmaps and comprehensive action plans illustrate the detailed implementation of these core priorities across our operations and along the entire value chain.”

Companies may address consumer expectations by incorporating fats and oil solutions sourced from dedicated sustainability and regenerative agriculture programs into their baked food, Peitz said.

“In the US, ADM engages directly with farmers for supplies of oilseeds like peanut, soy, corn and cotton grown using regenerative agriculture practices and principles,” she said.

RSPO member ADM bases regenerative agriculture on five land management principles: minimizing soil disturbance; maintaining living roots in soil; continuously covering bare soil; maximizing diversity, with an emphasis on crops, soil microbes and pollinators; and responsibly managing inputs, including nutrients and pesticides.