Intődy Gábor

Resolution on Palm Oil

Resolution of the Association of Hungarian Confectionery Manufacturers  on the Palm Oil Issue

The confectionery industry is aware that current palm oil management raises questions. Also, because conscious consumers are sensitive to the palm oil content of the products many manufacturers have undertaken to work only with sustainable palm oil: of our members Cerbona, Eispro, Göteborgs, Házisweets, Ferrero, Intersnack, Mars, Mondelez and Nestlé have joined the RSPO (Roundtable on Sustainable Palm Oil), furthermore many of our other members only purchase RSPO-certified palm oil. The confectionery industry is aware that current palm oil management raises questions. Also, because conscious consumers are sensitive to the palm oil content of the products many manufacturers have undertaken to work only with sustainable palm oil: of our members Cerbona, Eispro, Göteborgs, Házisweets, Ferrero, Intersnack, Mars, Mondelez and Nestlé have joined the RSPO (Roundtable on Sustainable Palm Oil), furthermore many of our other members only purchase RSPO-certified palm oil.

Oil palm is an ‘efficient’ crop; any other and current alternative requires more space and resources. Palm oil is not equivalent to deforestation if producers (mainly Indonesian and Malaysian communities) treat their environment responsibly. We believe that the focus should be on sustainable palm oil production rather than restriction.

Due to overconsumption as a consequence of overpopulation, virtually any plant food raw material could be highlighted as monocultures that change the environment and suppress natural habitats and species, including cereals, corn and soy.

Alternative local ingredients are not a solution to replacing palm oil in confectionery products, because rapeseed and sunflower are generally not suitable for this purpose. Butter of animal origin is not only inappropriate because of its significantly higher environmental impact, but its fat profile is less favourable from the point of view of nutrition, moreover, it can cause the rapid deterioration and rancidity of the products.

Changing to a substitute for palm oil would also require new technologies, which would not only be a long-term investment, but also a long-term commitment to a certain commodity that could also have an environmental impact later on. These could even be much greater than those caused by palm oil.

Currently, 74% of the European food industry uses sustainably produced palm oil (RSPO standard), while the world average is only 20%. The largest consumers of palm oil are India, China and Indonesia – the future depends primarily on them.

Europe has already taken measures to promote sustainable palm oil, but even a 100% European RSPO palm oil usage would only slightly improve the global situation. Restricting palm oil would ultimately affect Malaysian and Indonesian small farmers, who would find it impossible to cope, causing social tensions as well as internal and external migratory pressures.

Recommendations from the Association:

– When regulating the use of palm oil at a national level, directing the industry towards the use of sustainable palm oil instead of general bans in order to preserve the competitiveness of the industry.

– Auditing sustainable palm oil use has a net cost of approximately HUF 500,000/year/company, which is a significant expense for domestically owned SMEs. It is recommended that confectionery SMEs be provided with a source of funds for this purpose.

– Using Hungary’s membership and position as a member of the European Union, to initiate European-level pressure enforcement (certification requirements, import restrictions) on user countries and manufacturers with a low share of sustainable palm oil and who procure raw materials from uncontrolled sources.

– Hungary, following the ‘foreign investment strategy’ announced by the government, building on the excellent Hungarian-Malaysian relations and the ever expanding trade between the two countries, should actively participate in sustainable palm oil production in Malaysia with the provision of know-how and resources and capital investment incentives.

Biscuit market is expanding

The biscuit market is expanding both in Hungary and worldwide

More than one thousand years old, the biscuit endures despite climate crisis

With an estimated four percent increase in turnover this year, the 28,000 tonne domestic biscuit market has also boarded the international “biscuit express” as the global biscuit market is expanding by about five percent annually*. Moreover, total global sales are expected to grow from USD 120 billion to USD 160 billion in 5-6 years, said Sándor Sánta, President of the Association of Hungarian Confectionery Manufacturers at the Hungarian Museum of Trade and Tourism in Óbuda, where a biscuit exhibition has also been opened.

Biscuits have been an important food for mankind since at least the seventh century. Persian bakers were the first to bake dry, hard biscuits made from grain and water, which were primarily food for sailors, travellers and soldiers. They also served as indispensable food for the Roman legions, because non-perishable, high-energy biscuits which were easy to transport were ideal for the army.

The birthplace of tamed, softer, tastier, sweeter biscuit varieties aimed at civilians was Europe. We have the French to thank for harder, flat biscuits (1300s), and the Dutch for airier shortbread confectionery (1600s). The root of the word “biscuit” which is widely used in European languages comes from the Latin term “bis coctus”, meaning twice baked.

As biscuits contain predominantly cereals and water, and are generally free of or low in ingredients of animal origin, they have lower environmental impact than many other confectionery items and food products. Products low in fat and sugar, such as crackers, are the most sustainable, while biscuits with cream filling require the most resources. The production of one kilogram of biscuits involves the emission of 1.3-1.8 kg of CO2 and requires 11-27 litres of water, which is similar to the amounts for bread **.

In warm climates and in places where the climate crisis is causing warming, the biscuit is an ideal snack, as it retains its consistency and quality even in the heat, and requires no refrigeration. Recently, a number of manufacturers have introduced products that have a cream or chocolate filling that is completely enclosed by a biscuit or wafer coat, which is not only good for enhancing the taste experience but it also withstands the heat at the same time.
The biscuit market is also expanding for other reasons, of course. As the choice within a product category broadens, more and more consumers are finding their own favourite biscuits which then become part of their balanced diet. Biscuits with a low glycaemic index are now available, as well as those which are sugar-free, protein-enriched, fruity, multigrain, high in fibre, and even ice-cream biscuits to be served ice-cold.

Hungary offers a good opportunity for biscuit production because the main ingredients, flour, water or oats, are available from domestic sources. The demand for high quality oats for human consumption is expected to increase, which farmers should pay attention to and consider developing the cultivation of higher quality crops than the oats used for animal feed, as these can be sold for more.

Nevertheless, Hungarians eat less biscuits than in neighbouring countries, where the tradition of tea drinking is more widespread, and tea is unimaginable without some fine biscuits. However, biscuits are being served with tea and coffee in an increasing number of restaurants, which could further boost the development of a domestic “biscuit culture”. Consumers are also increasingly open to novelties and premium biscuits.

Dr Beáta Olga Felkai, Head of Department at the Ministry of Agriculture, emphasised that the aim of the department is to ensure the excellent quality of foodstuffs and to reduce the market for low-quality foods. The Codex Alimentarius Hungaricus plays a key role in this by providing credible information and guidance to producers and consumers alike. In addition, we have created a High-Quality Food (EQS) trademark system that affects growers, producers, processors, distributors and customers alike, as the logo is an indication of excellent quality. We believe that this will encourage producers and processors to develop, improve and sustain quality and also be an effective tool for increasing market awareness. Furthermore, the trademark also helps to inform the public, it builds trust, guarantees higher quality, and contributes to the development of a general food-consumption culture. The Head of Department at the Ministry of Agriculture added that international and domestic trends require continuous innovation, which we also consider important to encourage. This year’s OMÉK (National Agriculture and Food Exhibition) Food Industry Prize focuses on this and this field will continue to play a prominent role in the next funding period.

Péter Koósa, Managing Director of Detki Biscuits, representing the members of the Association of Hungarian Confectionery Manufacturers, emphasised that the company has been baking biscuits in Halmajugra for 36 years. With continuing innovation, expansion of their product range and technological investments they are following in the footsteps of the first Director Kálmán Koósa, who as a master of all trades saw production soar back in the ’80s. Owned by three families, the company was run by Olga Pavlova from 1991, who took over from her husband, Kálmán Koósa. Then this year, a successful generational change in management took place that usually poses a great challenge for Hungarian medium-sized companies, the owners electing Péter Koósa, the son of Olga and Kálmán as successor.

Péter Arnold Kertész, a communications consultant at Mondelez Hungária Kft. and Győri Keksz Kft., reported that the most important commodity for biscuit production is wheat, the cultivation of which is particularly exposed to global climate change. This is why it is of paramount importance that from 2019 the company has linked Hungary with its European sustainable wheat farming scheme, the Harmony Charter, whereby farmers supplying the company must minimise their environmental footprint, reduce their use of pesticides, decrease their CO2 emissions and water usage, and furthermore they must ensure biodiversity and leave 3% of their lands to grow flowers for feeding bees.

Gábor Szabó, Head of Corporate Relations and Market Research at Intersnack Hungary, said that their production plant in Győr has been making salted biscuits and crackers for almost 30 years and that 80% of their products are now sold abroad; they even export to East Asia, New Zealand, North and South America. Thanks to a technical patent dating back to the ’50s, they are able to bake extremely delicate, multi-layered crackers. Their latest product is the Chio Potato Cracker, a light potato cracker made from thin dough, but domestic sales are limited by the Public Health Product Tax (NETA). This is extremely high for salt crackers and biscuits, so that NETA combined with VAT amounts to approximately 40% of the consumer price. The over-taxation of salt crackers and biscuits is difficult to justify from a public health point of view, as the annual per capita consumption of salt crackers and biscuits in Hungary is only 170 grams, which is about 0.07% of our salt intake. Even with the best intentions, cracker makers are unable to reduce the salt content of their products to below the 1% salt content required for tax exemption, because unlike other types of snack, the salt in crackers and biscuits is not only added as seasoning but it is also an essential ingredient that regulates how the dough rises. This effect of salt has been exploited by all mankind for five thousand years, since the ancient Egyptians, who most probably invented leavening.

Dr László Somogyi, associate professor at Szent István University, explained that the training of Hungarian confectionery specialists at undergraduate level has a ten-year history at Szent István University and its predecessors. Training now continues at a new, postgraduate level in the University’s Faculty of Food Science. In the September of this year, the second year of the Master’s course in chocolate, coffee and tea preparation will be launched, which is the first professionally recognised specialisation leading to a degree in this country. Applications for this course may be submitted up till 15 August.

* Mordor Intelligence
** The Environmental footprint of biscuits, cookies and crackers, Journal of Cleaner Production, 2019/9