Specialty fats and oils, also known as alternative fats and oils, are increasingly being utilized as substitutes for traditional confectionery ingredients like cocoa butter, butter, milk fats, and palm oil in the food and beverage industry. Research firms such as LMC, Markets and Markets, Euromonitor, and Innova predict a 4-5% annual growth in global demand for specialty fats like shea butter, mango kernel, illipe butter, kokum kernel, and sal, which are used as replacements for cocoa butter in confectionery products.
One driving factor behind this shift is the rising demand for animal-free ingredients. The vegan chocolate market is expected to reach $2 billion by 2032, prompting many chocolatiers to seek alternatives to milk powder, butterfat, cream, and whey powder in their products.
Alternative fats and oils offer not only similar properties to traditional ingredients but also enhanced functionality and versatility, including heat resistance. This is particularly beneficial for brands expanding into warmer regions like the Middle East, where chocolate melting is a concern. Natasha Orlova, vice president of global specialty fats at Cargill, emphasizes the importance of this feature for customers in such climates.
Moreover, the use of alternative fats and oils can streamline production processes for food manufacturers by eliminating the need for tempering without compromising the desired texture of the final product.
Cost-cutting is another significant driver behind the increasing adoption of specialty fats. With the cocoa market experiencing unprecedented price spikes, the development of cocoa alternatives is becoming essential for sustainability. In response to this demand, Cargill is investing $50 million to expand its plant in Port Klang, Malaysia, aiming to meet the growing demand for specialty fats in Asia-Pacific and other regions.
The global scale-up of specialty fats and oils reflects a shift towards more stable pricing and reduced supply volatility in the food and beverage industry. With continued growth in the confectionery market, customers are seeking innovative solutions to meet consumer trends and regulatory requirements. This trend towards sustainability and cost-effectiveness is driving the development of new food processing technologies and packaging solutions in the food and drink industry.
