Do consumers want alternative raw materials?

Commodities including palm oil, cocoa and coffee are linked to deforestation. Efforts to mitigate these links, to conform either to individual certifications or the upcoming European Union Deforestation Regulation (EUDR), are often difficult and unwieldy due to the complexity of the supply chains involved. Yet consumers still want these products. We won’t see chocoholics or coffee addicts going cold turkey any time soon, at least voluntarily. However, alternatives to these commodities do exist. Companies developing these alternatives aim to provide the same functionality and the same taste without the environmental degradation that often comes with deforestation. In much the same way as plant-based meat alternatives, these companies aim to provide consumers with a version of what they want that is more sustainable. Key stakeholders in the world of alternative raw materials debated last week at the Future Food-Tech event in London if alternatives to raw materials can be scaled up, and more importantly, whether consumers will want them when they are. What are the barriers to commercialisation? But before going to market, there are a range of practical issues businesses must contend with. “How do we de-risk this thing that is inherently tremendously risky, and be world class at developing new products, manufacturing them, and then getting them to be relevant in the commodities market?” asked Adam Maxwell, CEO of Voyage Foods, which produces alternatives to coffee, cocoa, peanut butter and hazelnuts. Before producing an alternative raw material, said Anne Mertens-Hoyng, category director for chocolate, confectionary and ice cream at Cargill, one must be sure it is both feasible and viable. “Are the costs in line with what consumers are willing to pay?” she asked. Mertens-Hoyng’s department is helping to scale-up start-ups, including Voyage Foods. Scaling up is a key issue, largely due to funding, said Ben Wilding, CEO of alternative palm oil start-up Sun Bear Biofuture . Regulation, he suggested, is also a key barrier. The novel food application process is time-consuming and complex. The industry needs big players like Cargill to accelerate innovations, said Clément Tischer, head of food-tech at German retailer REWE Group. Large corporates are often hesitant at providing the backing needed to help start-ups to sell their products for the first time, which is why, he suggested, corporates which are willing to do so are often crucial for the industry’s ecosystem. “That collaborative ecosystem is absolutely critical,” agreed Wilding, pointing out the company’s own partnership which allowed it to significantly upscale. Are consumers interested in alternative raw materials? Even once these barriers are circumnavigated, an emerging market such as alternative raw materials has by no means a clearly defined commercial viability. Before going ahead with the production of such a product, said Cargill’s Mertens-Hoyng, it must first be ascertained whether the consumer truly wants it. Consumers, according to Cargill’s market research, are very open to the prospect of eating a chocolate substitute “as long as it tastes good. There’s no use in coming with an innovation that doesn’t taste good.” Consumer acceptance, suggested REWE Group’s Tischer, is still uncertain within such a nascent sector. “For new ingredients, you don’t have any benchmark. You don’t know how consumers actually perceive them and accept those new ingredients.” Expectations, he suggested, are usually very high. REWE Group replaced cocoa with a sunflower oil-based replacement known as ChoViva in one of its products, and according to Tischer, the company saw no drop in demand. This gave it the confidence that it was doing the right thing, but Tischer admitted that it could have ‘easily happened the other way around.’ ‘Accessibility to everyone forever’ is key to Voyage Foods, Maxwell told FoodNavigator after the panel. While sustainability is important, being able to provide ingredients to more people is also crucial. He said, while ‘changing habits that people are so viscerally tied to’ will initially be tricky, changing what people use as raw materials is nothing new. “Alternatives to ‘x’ are all our history. We used to used bat poop for fuel sources, we used whale oil, kerosene, gasoline, now renewables. In all industries there are better alternatives.” How do you get the taste right? Ingredients are not the whole of taste, at least in chocolate. Processing methods are also key to the end result that consumers get, and this fact is integral to a chocolate alternative. Cocoa ‘doesn’t make up the overall taste of the product’ in chocolate, pointed out REWE Group’s Tischer. This makes it somewhat easier to replicate. 80%, he said, comes from the processing methods. To make a chocolate alternative, one just needs to substitute the other 20%. “Chocolate doesn’t grow on trees,” Voyage Foods’ Maxwell told us after the panel. “The flavour we know and love of a chocolate bar doesn’t taste like a cocoa seed or a pod.” His company aims to generate those flavours through processing, with different ingredients. What is the future for raw materials? While the viability and feasibility of alternative raw materials in the present may be uncertain, the future could bring an entirely new landscape. As the effects of climate change continue to increase, Wilding pointed out, yields of palm oil plantations will start to go down, putting up the price. The combination of this and the improved unit economics of alternatives, such as Sun Bear Biofuture’s product, may change the relative prices of these commodities.