Restaurants Diversify Cooking Oils and Optimize Operations as Prices Soar

Restaurants Diversify Cooking Oils and Optimize Operations as Prices Soar

Cooking oil prices reached an all time high this October. While restaurant owners compete against the energy sector for every drop of soy oil out there, they’re up against some tough competition. Even organized crime has been stealing used fryer oil from dumpsters in the dead of night. Is it gold or oil we’re talking about here? To many, the difference is small when your operation depends on it. 

Operators are diversifying oil types and supply sources, while adjusting menus and learning how to prolong fry life. 

Cooking Oil Prices Triple amidst Global Shortages

The first  years of the pandemic came after nearly 6 years of low vegetable and crude oil prices. As the virus spread, consumption dwindled and so did production. Now, economies and restaurants are accelerating activity, but shortages are causing cooking oil prices to skyrocket.

A migrant worker shortage in Indonesia and Malaysia, the source of 85% of the world’s palm oil, led to a global shortage causing prices to double. Sunflower harvesting was delayed, and as farmers expect price increases they are holding out on selling to boost profits. Meanwhile, soy and canola oil – the main cooking oils used in restaurants – have tripled in price.

Crude oil prices have also risen to their highest value in the last 6 years, since the 2014 plummet. This increases all supply chain costs, from food to transportation, vegetable oil included.

Renewable Fuel Laws Worsen Soy Oil Crisis

Welcomed government mandates aim to reduce greenhouse gases by using renewable alternatives. At least 7 states, including California, require a percentage of fuel to be blended with up to 20% biodiesel or be completely renewable diesel. Both types are made from vegetable oil and animal fats.

As a result, energy companies are procuring vegetable oils before restaurants even have a chance. 

Biodiesel can also be made from used cooking oil. Before the pandemic refineries got most of their vegetable oil from the food-service industry.

But when restaurants shut down, refineries went straight to oil producers, and there’s no going back. Restaurants that still have offtake agreements for used oil have to guard their vats for fear of the cooking oil being stolen before it is sold, according to Business Insider. 

The US is one of the world’s top 3 producers of soy oil. It makes up 70% of the local edible oil market and is therefore the key oil now diverted to biodiesel.

Operators who relied mainly on this once cheap and neutral tasting cooking oil must now evaluate the alternatives.

6 Things to Consider with New Cooking Oils

There are several factors to consider when choosing a cooking oil for a restaurant. 

  1. Price  – The aforementioned factors have caused all vegetable oil prices to increase. But price may also be influenced by the relationship operators have with their suppliers and how fair the agreements are.
  2. Smoke point – The temperature at which an oil starts burning and smoking. Besides influencing taste, it is a sign that the oil is breaking down and toxic chemicals, such as free radicals, may be released. Choosing a smoke point that is suitable to the type of cooking being done is crucial. 
  3. Flavor – Many oils, like sesame or coconut oils, have a distinct flavor that can either enhance or unbalance a dish. Neutral tasting oils tend to have higher smoke points which makes them a common choice for frying and baking. 
  4. Health – Oils have long been scrutinized for their health impact. Fatty acids Omega-9 and Omega-3 are healthy and abundant in avocado, flax and olive oil. Omega-6 on the other hand, found in almond oil or overheated sunflower oil, may cause inflammation. In addition to fatty acids, oils contain saturated and unsaturated fats. In general, oils with more unsaturated fats are liquid at room temperature and healthier than solid oils. 
  5. Refined vs Unrefined – Unrefined oils retain more of their natural flavors and nutrients but have shorter shelf lives and lower smoke points. 
  6. Fry Life – There is no clear cut rule to how many times a batch of oil can be used. It depends on the effective temperatures, the foods fried (more particles left behind means shorter fry life), and even the arrangement of heating elements. Once the oil smokes at low temperatures or changes color, it’s time to change. There are now technologies and sensors that will help operators remember when it’s time for replacement.. 

Cooking Oils with High Smoke Points Compared

Restaurants typically have a variety of oils on stock to suit different needs. Here we compare cooking oils with high smoke points required for frying. 

>>> Get the best oil alternatives here!

    1. Canola Oil – Relatively low in saturated fat and high in monounsaturated fat, Canola oil is a practical choice for health- and price-conscious buyers.  Its neutral flavor and high smoke point (400-450F) makes Canola one of the most versatile options.  Common uses include deep-frying, baking, and in vinaigrettes and dressings.
    2. High Oleic Sunflower Oil – The refined version of this oil has a smoke point of 450F. It is rich in Vitamin E and considered healthy when not overheated, making it good for baking, searing and sauteing.  
    3. Corn Oil – Unrefined corn oil has a lower smoke point at 350F, but refined corn oil will have a smoke point of around 450F. It is good for frying and baking with a neutral flavor. Although rich in Vitamin E, corn oil can be highly refined and contains inflammatory fats.
    4. Soybean Oil – Soy oil has a neutral taste making it suitable for frying, salad dressings and baking. It is a good source of Omega-3 fatty acids and has a high smoke point at 450F. 
    5. Grapeseed oil – The health benefits of Grapeseed oil are plenty, boasting high levels of Vitamin E (more than any of the above oils), polyunsaturated and omega-6 fatty acids, Linoleic acid, and antioxidants.  It has a 420F smoke point and a subtle, nutty, grassy taste, but is also relatively expensive and might not be the best option for deep-frying and high-volume cooking.

6 Tips to Get Even More Out of Cooking Oils

Besides incorporating new types of cooking oils, restaurants can take steps to mitigate the effects rising prices and shortages have on their bottom line. 

  1. Optimize menus – Slowly incorporate fresher foods and recipes that rely less on fat.. These healthier menu items will reduce the amount of oil used per serving, save you money and boost your reputation.. 
  2. Prolong fry life – Extend frying oil life by filtering and purifying it frequently. Frequent cleaning will make sure yesterday’s particles aren’t contaminating today’s oil. 
  3. Choose quality – Premium oils with high-oleic values and antioxidants will prolong fry life as well as shelf life of baked products. The price increase balances out with fewer oil changes. 
  4. Oil maintenance – Train dedicated BOH staff in oil maintenance and safety.  Investigate oil management technologies and sensors that test and optimize oil use and reduce labor costs on changeouts. 
  5. Long term supply – Secure long term supply agreements. The farming industry is working on planting crops better suited for frying. But those will arrive in a few years. Find an honest distributor you can trust with transparent pricing and secure supply agreements in advance. 
  6. Sell used oil – Create an offtake agreement for the used cooking oil. The benefit of price increases is that the price of used oil has also increased.

The Future of Cooking Oils

Projecting what the future holds for cooking oil in restaurants is impossible, but it is reasonable to assume that the current trend will continue.

The new Omicron variant reminds us that the pandemic is far from over and its impacts are still materializing.

For example, soap and detergent prices are also likely to rise for similar reasons. Animal fats used to produce detergents can also be used to create biodiesel, and oil refineries are procuring fats fast. 

It will likely take 3-4 years until a mix of cooking oil substitutes, changes in eating habits and technological innovations, like air fryers, relieve some of the demand on cooking oil. 

We project that growing trends in health and sustainability will intensify consumer interest in the health and freshness of vegetable oils used in restaurants. 

Buy Cooking Oils from Cheetah

Need a cooking oil alternative? Cheetah has a huge selection for you to choose from. Download the app and get your order the next day!
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