By Bill Reilly, Director of Foodservice, Catania Oils
Key Takeaways:
- Avocado oil is gaining popularity due to health concerns about seed oils, but seed oils remain dominant due to their cost-effectiveness and versatility.
- Sustainable packaging innovations, particularly the shift from HDPE to PET and rPET plastics, are in high demand to address environmental concerns and combat shrinkflation.
- The edible oils industry faces ongoing challenges with food fraud and product authenticity, with better regulation needed and consumers advised to be wary of prices that seem too good to be true.
As the first half of 2024 comes to a close, we’ve been tracking emerging trends in the edible oils marketplace. Concerns about cost, health, sustainability, and shrinkflation have prompted notable changes throughout the industry.
Here are five predictions about what’s in store for the edible oil industry throughout the remainder of this year.
1. Avocado oil will continue to increase in popularity
In the past year alone, our team has seen a 40% growth in the sale of avocado oil, which began gaining momentum in retail four years ago.
The increasing popularity of avocado oil is due in part to the tenuous reputation of seed oils in the general public. Though seed oils are a reasonable alternative to more expensive products like avocado and olive oil, many retailers and foodservice professionals are nonetheless pivoting away from seed oils to cater to a more health-conscious market. Avocado oil shares many characteristics with olive oil, a product renowned for its health benefits. Avocado oil enables chefs to market a health-conscious oil to consumers without the hefty price tag of olive oil.
Avocado oil is also appreciated for its versatility — with a mild, buttery flavor and high smoke point, avocado oil is suitable in all applications, including dressings, frying, sauteing, and baking.
Versatile and health-conscious, demand for avocado oil will remain high.
2. Price is still king
Though avocado oil is becoming an inventory mainstay, the vast majority of edible oils used across the food industry are still seed oil-based — and that is unlikely to change. Seed oils are cost-effective, versatile, and tasty. As the price of pure oils continues to increase, frying oils and custom seed oil blends will remain popular. New proposed standards may cause avocado oil to spike in cost as well. Seed oils, in contrast, are historically cost-effective.
3. Sustainable packaging innovations will remain in high demand
The edible oil industry has long been scrutinized for its sustainability practices. In the past, concerns have risen about the ethical sourcing of raw materials, the impact of harvesting raw materials on local biodiversity, and more. Recently, there has been a push towards sustainable packaging as a result of growing concern about landfill waste and microplastics — and, more positively, as a way to combat shrinkflation.
The industry is shifting away from HDPE plastic in favor of the more durable, versatile, and sustainable alternative of PET plastic, which is the most recyclable plastic in the United States. Recycled PET (rPET) goes a step further by incorporating recycled material into the final product. A gallon-sized bottle made of PET plastic uses 44% less plastic than the traditional HDPE version, and also uses 30% post-consumer recycled materials rather than virgin plastic.
As sustainability remains an important consideration for industry professionals, we will likely see more innovative packaging solutions emerge.
4. Cost-effective packaging will combat shrinkflation
Innovative packaging solutions can be as cost-effective as they are sustainable. Shrinkflation is one of the foremost problems facing the edible oil industry. As costs rise, concerns about profit margins have compelled some companies to cut corners by reducing the amount or quality of their products without changing the packaging or price. While this approach may improve profitability in the short-term, client relationships are likely to erode over time. Choosing cost-effective containers ultimately reduces packaging costs, allowing for profit margin shifts without the need to sacrifice the amount or quality of the product itself.
5. Concern about product authenticity will continue
Food fraud and shrinkflation are real problems in the edible oil industry and the food industry in general. Though many honest companies still exist, these issues have fostered distrust amongst buyers — for good reason. According to industry experts, fraud affects 1% of the global food industry at the cost of about $10-$15 billion/year, though other experts predict it’s closer to $40 billion/year. Better state and federal government regulation at all stages of the supply chain is necessary.
In the meantime, manufacturers should be aware of fraud and its impact. If the price of a certain product looks too good to be true, it most likely is. For example, the price of olive oil has gone up significantly. This dramatic price increase impacted the entire industry — authentic olive oil is more expensive everywhere. A costly product does not necessarily indicate a rip off — in fact, it’s likely to be the other way around.
The flexibility, innovation, and cost-consciousness demonstrated by the edible oil industry in the first half of 2024 are likely to continue throughout the remainder of this year and beyond, driven by the substantial obstacles of an increasingly health-conscious public, rising costs, and concerns about product authenticity.
Bill Reilly is Director of Foodservice for Catania Oils, the Northeast’s leading processor and packager of plant-based oils for retail outlets, bulk purchases, and the foodservice industry.
