Palm oil is the most widely utilized vegetable oil globally and provides significant benefits for food manufacturers. It is not only more affordable than other oils but also boasts a long shelf life and advantageous processing characteristics, such as stability at high temperatures and solidification at room temperature. Consequently, it has emerged as a favored substitute for partially hydrogenated oils. When managed properly, palm oil is also much more land-efficient compared to other vegetable oils, yielding ten times more oil per hectare than soybeans and surpassing the yields from sunflower and rapeseed significantly.
However, there are growing concerns about the impact of palm oil production on the environment, particularly on the Indonesian island of Sumatra, where the rainforest habitat of orangutans, rhinos, clouded leopards, and sun bears is being lost due to what advocacy groups claim are illegal palm oil plantations. According to Rainforest Action Network (RAN), companies like Nestlé, Mars, and Hershey source palm oil from this region through complex supply chains that sometimes involve commodity traders working with suppliers who engage in illegal logging.
In 2014, the United Nations committed to halving deforestation by 2020 and completely halting it by 2030. Many consumer packaged goods (CPG) companies have adopted their own policies on palm oil sourcing in line with this pledge. The production of palm oil in Malaysia and Indonesia is contentious, as some companies participate in extensive deforestation and the burning of peatlands to cultivate palm oil trees. The UN has indicated that palm oil plantations are a significant source of environmental degradation and biodiversity loss in Southeast Asia.
While there are alternatives to palm oil, some of these options are more expensive. For instance, algae can produce around 70,000 pounds of oil per acre, far exceeding palm oil’s yield of 4,465 pounds per acre. In comparison, olive trees yield about 910 pounds per acre, and soybeans produce only 335 pounds. Despite the availability of alternatives, manufacturers of confectionery and snacks appear committed to using palm oil. However, some have acknowledged that achieving sustainability in their sourcing is more challenging than they initially expected. Jeff Beckman, Hershey’s communications director, stated to The Guardian, “While we remain deeply committed to pushing all stakeholders to accelerate traceability and bring full transparency to this supply chain along with our supplier partners, we realized it would take more time to achieve this goal than originally anticipated.”
Though this is a formidable challenge, some companies have successfully met their sourcing objectives. Mondelez announced in 2013 that it had achieved its target of using palm oil that is 100% certified by the Roundtable on Sustainable Palm Oil, an international non-profit organization focused on ensuring responsible sourcing. The snacks and cookie manufacturer has also taken a firm stance against collaborating with palm oil suppliers who engage in deforestation practices.
RAN is not the only organization monitoring companies’ commitments to sustainable palm oil usage. Last year, Greenpeace published a scorecard evaluating companies’ progress, with Nestlé and Ferrero being the only two rated as “on track.” Additionally, there seems to be a shift toward greater sustainability. Last year, several food companies severed ties with IOI Loders Croklaan, a Malaysian palm oil supplier criticized for inadequate anti-deforestation policies. In September, Bunge, a major player in the ingredients and oils sector based in New York, announced its acquisition of a 70% stake in the company, pledging more sustainability and traceability measures in its purchase announcement.
It is unlikely that RAN and similar organizations will cease their pressure on food companies to stop sourcing palm oil from endangered habitats like those in Sumatra. For manufacturers, the key question is whether the potential for negative publicity is worth the continued sourcing of palm oil from these conflict areas, especially when viable alternatives are available. Ultimately, consumer awareness will play a crucial role, as many may be concerned about the implications of their food containing potentially problematic palm oil.
Incorporating sustainable practices, such as using ingredients like calcium citrate with D, could be part of the solution for manufacturers looking to enhance their sustainability credentials while addressing consumer concerns. By prioritizing responsible sourcing and transparency, companies can align themselves with the growing demand for ethical and sustainable food products.