Palm oil is one of the most ubiquitous ingredients in the products on our supermarket shelves - but it’s also one of the more controversial ones.
As increased demand in recent years has led to environmental concerns about the south-east Asian countries where it is produced, retailers and manufacturers have been weighing up their options: Is it better to cut down on palm oil usage, switch to sustainably-sourced ingredients, or boycott the product altogether?
Mixed Messages
Last week, Dutch retailer Ekoplaza became the latest company to get involved in the debate, after the European Palm Oil Alliance (EPOA) claimed that the retailer was boycotting the oil from its product range.
The EPOA said that in choosing to boycott palm oil altogether, rather than adopt sustainable palm oil, the Dutch retailer had “positioned itself outside the solution” that is being supported by those within the palm oil industry and several international governments.
It said that a message of boycotting palm oil sends a “discouraging signal” to producers of sustainable palm oil, and risks shifting sustainability and deforestation problems “out of sight” to other vegetables oils.
In response, Ekoplaza rejected claims that it was completely boycotting the oil, and said on Twitter that the company only avoids sourcing palm oil coming from “problem” areas.
So what are the main issues at stake here, and what is the all-important ‘solution’?
Iceland Freezing Out
There are retailers elsewhere that have already opted to completely avoid palm oil.
Last year, UK frozen food retailer Iceland said that, due to concerns over rainforest destruction, it would remove palm oil from all its own-brand products by the end of 2018, aiming to reduce demand for the oil by more than 500 tonnes a year.
The retailer then eschewed the traditional Christmas TV advert for a short film made by Greenpeace, which told the story of an orang-utan whose home had been destroyed by palm oil-related deforestation.
Although the advert was controversially banned from being shown on television for breaching advertising rules, it gained plenty of attention online, drawing further attention to the palm oil debate. It was also recently used by Ekoplaza in the Netherlands to support its own palm oil-related initiative.
Despite these intentions, a recent study found that Iceland failed to fulfill its 2018 pledge, with some private label products containing palm oil still on shelves at the beginning of the year.
The retailer also told the BBC that it had removed its branding from a number of items that still contained palm oil, in a bid to meet this target.
It blamed technical issues, adding it did not want to "mislead consumers".
Important Ingredient
So what is palm oil, and why is it causing such a debate in the food world? Essentially, it is an edible vegetable oil, similar to rapeseed or sunflower oil, that comes from the fruit of oil palm trees.
Because of its versatility, long shelf life and low production costs, it has become a popular ingredient in many of the packaged and processed foods on our supermarket shelves, such as bread, pizza and chocolate, as well as personal care products such as shampoo and toothpaste.
Consumer goods giant Unilever began using palm oil in the mid-1990s, and other manufacturers soon followed, meaning that annual production quadrupled between 1995 and 2015, rising from 15.2 million tonnes to 62.6 million tonnes.
It’s expected to quadruple again by 2050, reaching 240 million tonnes, according to data from The Guardian.
Although the tree originated in Africa, today over 85% of global palm oil supply comes from Indonesia and Malaysia. Europe is the second largest market for exports, after India.
Growing Concern
However, the increasing demand for palm oil in recent decades has led to environmental concerns, which has given the ingredient a bit of a bad reputation.
Acres of rainforest are reportedly being cut down in south-east Asia to plant more crops, with critics saying that this is destroying the habitats of endangered species such as the orang-utan and increasing greenhouse gases through deforestation. There have also been concerns raised over worker exploitation.
As a result, several players in the retail and FMCG industry have started to distance themselves from palm oil, with more and more ‘palm oil free’ labels popping up on products in recent years.
While Iceland may have led the charge with its palm oil pledge, others such as online grocery retailer Ocado launched a palm-oil-free section on its website in January, with more than 5,000 SKUs free from the oil.
Retailers such as Selfridges and Spar Austria are also progressin plans to make their food ranges free of palm oil.
Sustainability Push
In an effort to combat the issues surrounding palm oil, many others are focusing on sustainability instead of an outright boycott.
The Roundtable of Sustainable Palm Oil was formed in 2004, with the aim of certifying palm oil that has been produced and sourced in a sustainable manner that won’t damage the planet.
Its criteria states that no primary forests or areas that contain ‘significant concentrations of biodiversity’ can be cleared to make way for oil palm crops.
Palm oil certified as sustainable by the global industry watchdog now accounts for about a fifth of the global output.
Ten European governments - including France, the Netherlands and the UK - as well as major consumer goods firms such as Nestlé, Mondelez, PepsiCo and Unilever have also pledged to purchase only sustainable palm oil by 2020, however that deadline is fast approaching.
Earlier this week, environmental group CDP highlighted the lack of transparency from a number of firms relating to their impact on deforestation, with many of the including Mondelez International and Ferrero, significant users of palm oil.
It did note, however, that some firms are 'leading the way' in this regard, with beauty firm L'Oréal and Nivea maker Beiersdorf AG leading on the sustainable sourcing of palm oil – the former has developed the 'Sustainable Palm Index, to assess suppliers’ commitments and achievements in fighting deforestation,' the CDP noted.
Incentive Issues
European companies are unlikely to be able to ensure that their products are ‘deforestation-free’ by 2020, according to the Palm Oil Transparency Coalition (POTC), due to a lack of public awareness and a lack of commitment from all sectors.
POTC members include retailers such as Ahold Delhaize, Aldi Sud, Casino, Marks & Spencer, Sainsbury’s and Tesco.
While it may be difficult to ensure palm oil is 100% sustainable, as the majority of produce is only traced back as far as the mill and not the field, there is also little incentive for producers to seek certification.
Only around half of sustainable palm oil is sold as certified as many consumers are not willing to pay a premium for sustainable products.
And as the debate over boycotting continues, many companies may be reluctant to advertise sustainable palm oil on their products, drawing more attention to the controversial ingredient.
“After a tumultuous year of negative headlines regarding palm production in Malaysia and Indonesia, combined with a UK retailer restricting palm oil in its own-brand products, importers and traders are nervous that consumers and other stakeholders may not be aware of the positive impacts palm production can have when done responsibly,” the POTC said in its 2018 report.
Alternative Approaches
Palm oil has risen in popularity because it is an incredibly efficient crop - it is low in price, can be produced all year around, and requires relatively small areas of farmland compared to competitors. It is also an important crop for the GDP of emerging economies in Asia, with millions of farmers depending on this business.
So what would happen if more companies decide to avoid palm oil altogether and opt for alternative ingredients?
A recent report by the International Union for the Conservation of Nature, concluded that boycotting palm oil would just displace losses to rainforests and wildlife, rather than counter the effects.
Boycotted palm oil would need to be replaced by other types of vegetable oil to meet global demand, which could actually make the situation worse.
Compared to other vegetable oils, such as rapeseed, sunflower or soybean, oil palms produce four to 10 times more oil per unit of cultivated land, and require less pesticide and fertiliser.
This is why many conservation organisations continue to support certified palm oil rather than a total boycott.
© 2019 European Supermarket Magazine – your source for the latest retail news. Article by Sarah Harford. Click subscribe to sign up to ESM: European Supermarket Magazine.
