Sustainable palm oil: Tackling the consumer awareness challenge

24 May 2020

Palm oil has some major image problems, but its production is essential to the livelihoods of many smallholders and processors in Southeast Asia and elsewhere. How can western consumers be convinced that sustainably produced palm oil is an ingredient worth supporting?

For many years, the palm oil industry has been linked to deforestation and shrinking habitats in countries like Indonesia and Malaysia, but efforts to increase sustainable production appear to have had little effect on consumers’ poor impression of the ingredient. In Europe in particular, many shoppers continue to associate palm oil with environmental destruction and prefer “palm-oil free” products, despite sustainably produced palm oil having huge eco-friendly potential.

Sustainable palm oil: Tackling the consumer awareness challenge
Consumer perception of palm oil has been stubbornly hard to shift

When it comes to land use, for instance, production of palm oil is higher per hectare than any other land-based vegetable oil – up to ten times higher than some of the most commonly used alternatives. It also uses less water, and when farmers use certified sustainable practices, it is a significant source of income for Southeast Asia producers without contributing to deforestation or habitat loss. Switching to other oils, by contrast, could lead to even greater land use change because of the larger area needed to produce the same amount of oil. From a manufacturing perspective too, palm oil is valued for its low cost, long shelf life and processing benefits, such as heat stability and solidity at room temperature.

However, widespread consumer reluctance to purchase even sustainably sourced palm oil has led to surpluses that are then sold at the same price as palm oil produced using much more destructive methods, thereby disincentivising those who have invested in sustainable production. According to the Roundtable on Sustainable Palm Oil (RSPO), about 20% of the world’s palm oil is certified as sustainable, but only about half of it is sold each year.

A global ethical standards initiative called Palm Done Right aims to re-educate consumers and manufacturers about the source of their palm oil, and has launched a campaign trying to convince food companies to highlight sustainable palm oil on-pack. The idea is to accelerate the shift toward sustainable oil, rather than cutting it from supply chains.

Several major food manufacturers have already made strides toward rejecting unsustainable palm oil, including Unilever, Kellogg, Mondelez and PepsiCo. According to a WWF report, Italian chocolate and Nutella maker Ferrero leads the pack when it comes to supporting sustainable production, but consumer perception has proved difficult to change. Meanwhile, major palm oil traders like Cargill, Bunge Loders Croklaan, Wilmar and Golden Agri Resources have cut ties with suppliers linked to unsustainable practices, also helping to increase global volumes of sustainable oil.

Still, lack of consumer awareness remains a major barrier to increased uptake among manufacturers, and this is one of the RSPO’s priority areas, so consumer demand becomes a driving factor, putting pressure on food companies to use only certified sustainable palm oil.

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