SZYM: article food applications

Investment Analysis Clubs Saul’s Investing Discussions
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http://seekingalpha.com/article/2281533-why-solazyme-expects…

The article (and the referenced publication describes the benefits of using SZYM frying oil versus standard canola frying oil for fast food frying application.

What I found interesting is that each McDonald’s franchise uses 2500 gallons of frying oil per year. At 3.5 kg/gallon, each franchise uses 8.75 MT of frying oil. Assuming that SZYM frying oil can be used 5 times longer than their existing oil, each franchise would use 1.75 MT per year.

Now there are 31,000 McDonalds, 13,000 BurgerKings, and 8000 Wendy’s. So to say that there are 50,000 fast food franchises is very conservative. Let’s call the global total to be 60,000 franchise location that use frying oil to make items like french fries. In aggregate, the restaurants could use 105,000 MT of SZYM frying oil. SZYM’s capacity (once ramped up) is 122,000 MT.

Chris

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In aggregate, the restaurants could use 105,000 MT of SZYM frying oil. SZYM’s capacity (once ramped up) is 122,000 MT.

I like the way you think!

Long SZYM
Mykie
Who stopped eating fried foods 40 years ago and is threatening to live until 100

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Longer lasting fry oil is a super advantage. However that alone may not be enough to make a company like MacDonalds use it. Remember when MCD wanted to go to a healthier frying medium, it took them years to find one that produced a french fry taste comparable to what thet had been using
(I recall the original may have had a beef tallow component).

Rob

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Longer lasting fry oil is a super advantage.

The downside of this would be any public backlash that might result. I can imagine what would happen if there are articles stating that McDs is trying to save money by using oil twice as long as normal but then the explain it is new GMO modified Oil from alge so everything is ok.

It may all be perfectly correct but not something that sounds good to the consumers… I really wouldn’t want to be the first to touch it as it could be a PR nightmare.

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The downside of this would be any public backlash that might result. I can imagine what would happen if there are articles stating that McDs is trying to save money by using oil twice as long as normal but then the explain it is new GMO modified Oil from alge so everything is ok.

It may all be perfectly correct but not something that sounds good to the consumers… I really wouldn’t want to be the first to touch it as it could be a PR nightmare.

So it’s ok so sell Coke or Pepsi that contains high fructose corn syrup (90% of corn produced in the US is GMO) but not French fries cooked in SZYM oil? I haven’t heard of any backlash about Coke, Pepsi, any other non-diet soft drink, corn tortillas or tacos (think Taco Bell). Oh, don’t forget about all those corn fed cows ( and chickens)…no one talks about no eating beef or chicken.

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I am not saying it is ok or even that it is unsafe. It might even be better than what they do. I am just talking about the public perception of what it looks like that McD’s is able to save money by using cooking oil twice as long as normal. The explanation is one very easy to backfire by saying that nobody should worry as our genetically modified oil lasts twice as long as normal oil.

They can’t just say… look what Coke and Pepsi is doing…

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Sorry for being unclear. My point was that MCDs sells Coke or Pepsi in their locations and there is no backlash. They sell hamburgers from cows that ate GMO corn and there is no backlash. They sell chicken sandwiches from chickens that ate GMO corn, no backlash.

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I agree with IDC. Although there are plenty of GMO products out there, making a change to a genetically engineered oil so that they can use it longer doesn’t sound like a big sell to me. I don’t think it is different, or even close to unreasonable, but I do think it “doesn’t sound right.”

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I am not saying it will be the GMO in itself that would be backlash. But if it got known that they are able to save money by using cooking oil twice as long as normally used would raise questions about how can they do that? They would be left to explain why their oil can last twice the normal usage.

Don’t think they haven’t suffered before bad press for their food. The whole Pink Slime thing wouldn’t ever pass any explanation to the public regardless of its safety.

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But if it got known that they are able to save money by using cooking oil twice as long as normally used would raise questions about how can they do that? They would be left to explain why their oil can last twice the normal usage.

If they were to switch to the oil (I’m not saying that they will), then they won’t explain anything. There is no benefit to the customer to knowing this information. If the fries taste the same, who cares? If a company can lower operating costs on something that’s completely transparent to the customer, they usually don’t explain anything.

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From Wikipedia under “genetically modified foods”:

About 90% of the corn grown in the US has been genetically modified.[31]

And:

About 90% of the planted area of soybeans in the US are genetically modified varieties.[33][31]

And:

Most vegetable oil used in the US is produced from several crops, including the GM crops canola,[50] corn,[43][51] cotton,[52] and soybeans.[53] Vegetable oil is sold directly to consumers as cooking oil, shortening, and margarine,[54] and is used in prepared foods. There is no, or a vanishingly small amount of, protein or DNA from the original GM crop in vegetable oil.[45][55] Vegetable oil is made of triglycerides extracted from plants or seeds and then refined, and may be further processed via hydrogenation to turn liquid oils into solids. The refining process[56] removes all, or nearly all non-triglyceride ingredients.[57]

And:

95% of sugar beet acres in the US were planted with glyphosate-resistant seed in 2011.[17] Sugar beets that are herbicide-tolerant have been approved in Australia, Canada, Colombia, EU, Japan, Korea, Mexico, New Zealand, Philippines, Russian Federation, Singapore, and USA.[61]

The food products of sugar beets are refined sugar and molasses. Pulp remaining from the refining process is used as animal feed. The sugar produced from GM sugarbeets is highly refined and contains no DNA or protein—it is just sucrose, the same as sugar produced from non-GM sugarbeets.[45][62]

Therefore, it’s hard for me to see how this is going to be a deal-breaking issue for them. Their oil is the same as everyone else’s, only better. And they can point out that there is nothing genetically modified about their oil, you cant “catch anything” from any genetically modified genes - as there are no genes at all in the oil, there is no DNA in the oil, it’s just food oil.

JMO

Saul

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And it doesn’t have to be McD which is very sensitive to adverse publicity. There must be tens of thousands of mom and pop hamburger joints, and other small restaurants, in the US who don’t worry about publicity, and if someone says this is a better longer-lasting oil, certified safe for human consumption, and even cheaper (maybe), they’ll jump at it, and won’t ask questions.

Saul

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Therefore, it’s hard for me to see how this is going to be a deal-breaking issue for them. Their oil is the same as everyone else’s, only better. And they can point out that there is nothing genetically modified about their oil, you cant “catch anything” from any genetically modified genes - as there are no genes at all in the oil, there is no DNA in the oil, it’s just food oil.

Well said. Additionally, I can hardly believe that fast-food lovers are so health conscious. If they were, they wouldn’t, and shouldn’t eat there. Comparing with everything else sold there, this oil, if they use it, probably would be the least harmful to health.

Regards.

-M

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This is my thought exactly - I think people that are eating at fast food places are not going to be all that concerned about what the food is fried in. People that are that concerned about GMOs are not stepping into a McDs to begin with.

Go SZYM!

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I would bet that less than 1% of people polled would have any idea how often fry oil is changed in a restaurant. I would also bet that less than 10% would know/care what type of fry oil is used by a given food outlet.
From time to time you hear about transfats or hydrogenized fats, but largely most people don’t take the time to find out.

Rob

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I would bet that less than 1% of people polled would have any idea how often fry oil is changed in a restaurant

Most certainly wouldn’t know and wouldn’t care until they knew for what ever reason. How long was “Pink Slime” used before it got such a backlash in 2012? It had little to do with safety, but just a sudden public backlash from something that had been used in food since the 1990’s I believe that suddenly became a big story. I think the term even first appeared in the press in 2009 but only in 2012 did it really break into a big scandal.

So I think these things can make large restaurants to be extra careful in the perception of what they do even if they believe there is no health or safety issue.

In general, I agree that most don’t know nor care that much about it…until it somehow boils up to be a big story.

I don’t count on Cooking oil to be essential to their success anyway

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So it’s ok so sell Coke or Pepsi that contains high fructose corn syrup (90% of corn produced in the US is GMO) but not French fries cooked in SZYM oil? I haven’t heard of any backlash about Coke, Pepsi, any other non-diet soft drink, corn tortillas or tacos (think Taco Bell). Oh, don’t forget about all those corn fed cows ( and chickens)…no one talks about no eating beef or chicken.

Hi Chris,

You are right on but as TS Eliot said:

Between the idea
And the reality
Between the motion
And the act
Falls the Shadow

and I’m afraid in the world of one liners, GMO is a more effective lightning rod than high fructose corn syrup.
Mykie
PS you might also know that once most oils get to a certain temperature, (enough to fry potatoes), it becomes rancid. I wonder if anyone knows that within the first batch or so of oil used, they are eating potatoes cooked in rancid oil?

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