Calyxt partners to develop soy-based alternative to palm oil

Dive Brief:

• Plant-based biotechnology platform company Calyxt announced a new partnership with an undisclosed ingredients manufacturer in Asia to develop a modified soybean capable of becoming a commercial alternative to palm oil.
• Calyxt will receive an unspecified amount for its partnership during the research stages. The agreement between the two companies includes an option to commercialize the final ingredient, which Calyxt estimates will generate $35 million for the company.
• Palm oil has been plagued for years by questions surrounding its sustainability, with deforestation, habitat degradation, climate change, animal cruelty and indigenous rights abuses being highlighted. Although companies such as Nestlé, Mars, General Mills, Post, Danone and Unilever made commitments to sustainability and fair labor years ago, these issues surrounding palm oil production have continued.

Dive Insight:

Fewer people are wanting to guess about what is in the food that they consume, and consumers are willing to pay more for products that meet their standards for sustainability and transparency. Brands are finding it possible to earn consumer loyalty by certifying their products as sustainable or by avoiding products of contentious origin altogether. Palm oil is one ingredient that has garnered particular concern from shoppers.

According to the Rainforest Action Network, palm oil is used in 50% of all consumer goods, from lipstick and packaged food to body lotion and biofuels. It is one of the most common ingredients in U.S. food products. However, the United Nations has said palm oil production is destructive and a major source of environmental degradation and biodiversity loss in Southeast Asia.

In response to the widespread view that this ingredient is detrimental to the environment, companies are looking to reduce their reliance on the ingredient. However, recreating the silky smooth, tasteless texture that palm oil gives manufacturers is not easy.

Palm oil is not only desirable for its ability to be used in a wide variety of applications, but it is capable of outpacing the production of other popular vegetable oils, such as soybean. In addition to requiring significantly more land to produce the same quantity of oil, a 2020 study found the rates of biodiversity loss from palm oil production were similar to other monoculture plantation crops such as rubber and soybeans.

If Calyxt’s partnership with the Asian ingredients manufacturer results in a viable commercial alternative to palm oil that can compete at scale while offering assurances of sustainability, there is a good chance that manufacturers will at least try the soybean oil as an alternative.

Enjoy Life, which is owned by Mondelez, was the first food company to be Certified Palm Oil Free by the International Palm Oil Free Certification Accreditation Programme (POFCAP) in 2018. 

In 2010, Nestlé made a commitment of no deforestation by 2020. However, by September 2019, Reuters reported Nestlé had readjusted its goals and was now aiming to achieve deforestation-free supply chains by the end of 2022. The food maker said at the time that 90% of the key commodities bought by the company had been verified deforestation-free.

The world’s largest food manufacturer has used satellite imagery to identify areas at risk of deforestation. It is now using the service to monitor its entire palm oil supply chain. 

Having another plant-based oil option on the market to directly compete with the unsustainable palm oil would provide Nestlé and other companies with yet another avenue to continue to reduce their reliance on it. Given the popularity of the ingredient and its widespread use, Calyxt has a potentially lucrative market it could tap into.

While a switch to soybean oil from palm oil will be a challenge, Calyxt has the advantage of already working in the plant-based ingredients space. The company’s list of genetically modified plants with the ability to become commercially available ingredients includes soybean varieties modified to deliver premium oils, gluten-free oats that can be grown during the winter and a high fiber wheat.