Palm Oil Alternatives Are on the Rise – Will Consumers Bite?

As sustainable alternatives to palm oil enter the mainstream, a new survey shows that consumers view them more favourably than the conventional tropical fat.

Would you eat a fat made from fermented yeast?

That’s a question one startup asked 1,350 people in France, Germany and the Netherlands – and for a majority of them, the answer was a big fat yes.

The survey was conducted by NoPalm Ingredients, a Wageningen-based producer of yeast-derived fats, with the aim of understanding consumer acceptance of its sustainable alternative to the most commonly used fat on the planet.

The firm uses a proprietary fermentation process with non-GMO yeasts to convert local agricultural sidestreams (like potato peels and whey permeate) into yeast oils. These can be a “drop-in” replacement for palm oil – it costs the same, and manufacturers don’t need to reformulate their recipes.

“For the first time, we have robust, independent data showing that brands can switch to yeast oil without losing consumer acceptance or purchase intent,” said chief commercial officer Julie Cortal. “That unlocks a critical path to market entry and scalable adoption for an entirely new category of sustainable oils.”

Europeans have a taste for yeast-derived palm oil alternative

The poll assessed the acceptance of yeast-derived oil in terms of product appeal, purchase intent, and ingredient list liking. NoPalm Ingredients chose margarine as a test product, its high oil content and daily household use making it a high-exposure ingredient and a “strong indicator for broader market applicability”.

They found that yeast oil was “significantly more liked” than palm oil as an ingredient in Germany and France. The fermentation-based alternative was viewed by a majority of respondents as both healthier and more environmentally friendly too. Indeed, NoPalm Ingredients’s offering generates 90% fewer emissions and requires 99% less land than palm oil.

While overall consumer awareness about yeast oil remained low (between 10-20%), it didn’t negatively impact acceptance. And when the benefits of the alternative were communicated to participants, their liking of the ingredient grew significantly.

When shown the back-of-pack, all yeast oil labelling options performed at least on par with current fat labels for product appeal and purchase intention. In Germany and France, labels that included the term ‘yeast’ outperformed those that didn’t, while the phrase ‘oil of yeast origin’ was found to be clearer and more accessible than technical alternatives, such as the mention of specific yeast strains.

“Clear consumer labelling is not only a commercial advantage, but also a regulatory requirement,” said Leoniek Robroch, regulatory affairs manager at NoPalm Ingredients. “Our data shows that ‘yeast oil’ is both well-understood and accepted by consumers. It has [the] potential to be recognised as a customary name under EU regulations, an important step toward compliant and scalable market access.”

NoPalm Ingredients already working with industry giants

The results of the survey would offer food brands looking to replace palm oil in their products clear guidance on labelling and a de-risked pathway to reformulation, according to NoPalm Ingredients.

Globally, 40% of all oil produced is palm oil, which is present in half of all supermarket items, making up a $70 billion market. The industry is a driver of rampant tropical deforestation and has been directly linked to wildfires in Indonesia. Further, palm oil production is a threat to wildlife and human rights, with Indigenous communities losing their lands and workers being exploited under poor conditions and pay.

These issues have led policymakers across the world, including the EU and the UK, to clamp down on deforestation-linked palm oil. But replacing palm with other vegetable oils isn’t a good solution either, as doing so could have unintended climate consequences.

It’s why startups like NoPalm Ingredients are leveraging fermentation to produce palm oil substitutes instead. It’s an increasingly crowded space, populated by the likes of Palm-Alt, Clean Food Group, Äio, Time-Travelling Milkman, Savor, and Smey, among others.

NoPalm Ingredients currently sells two products under its Revóleo brand. Revóleo Soft is a beige, semi-solid microbial oil meant to replace palm oil, cocoa butter, or milk fat across confectionery, bakery items, and plant-based meat and dairy. Revóleo Silk, meanwhile, is a soft butter for cosmetics and personal care, delivering smoothness, spreadability, and natural shine to body lotions, hair conditioners, colour cosmetics, soaps, and more.

The company has raised $6.5M and has already attracted several industry giants with its technology, including Unilever, Zeelandia, and Colgate-Palmolive; in addition, its fat has been used by precision-fermented dairy producer Those Vegan Cowboys in an animal-free camembert.