‘Ownership still lacking’: FMCG brands need to step up public support of sustainable palm oil – RSPO leadership

The Roundtable on Sustainable Palm Oil (RSPO) believes that although certified sustainable palm oil (CSPO) has made great strides in the food and beverage sector over the past two decades, progress at the consumer level is still being hampered by a lack of ownership on the part of consumer-facing FMCG brands.

“Although sustainability is most definitely a shared objective by everyone in the industry, there are many individual changes that need to be made in order to make a significant impact,”​ RSPO Board of Governers Co-Chair Dato’ Carl Bek-Nielsen told us at a closed media conference after the officiation of RSPO’s recent RT2022 event in Kuala Lumpur, Malaysia.

“Unfortunately this ownership is sometimes lacking, especially when [looking at] some, not all, end-users of CSPO, including in large food and beverage brands.​

“One example I have seen is a big firm that told me that they like using palm oil due to its useful characteristics when it comes to the actual product formulation, but that they ‘need to be careful’ when taking pictures such as of the CEO at palm oil plantations as palm oil can be a ‘very sensitive’ issue and the pictures could be misconstrued.​

“What the industry really needs is for companies to really step up and independently take ownership of their usage of CSPO, to show everyone that we are really trying to unite as a whole entity behind CSPO and highlight its benefits – everyone needs to play their part, there is no point pointing fingers at one another.”​

Newly-appointed RSPO CEO Joseph D’Cruz added that this issue is also prevalent when it comes to the use of RSPO logos on end-product packaging.

“Trademarks on packs are very important when it comes to communicating with consumers, but we see that members can be reluctant to use the RSPO logos to make this communication,”​ he said.

“The communications or marketing teams of these big brands tend to hesitate due to consumer sentiment that all palm oil is bad – but these companies also have a role to play when it comes to telling that story about how sustainable palm oil is the best way forward.”​

Bek-Nielsen also pointed out that this support needs to also be reflected when it comes to making purchasing choices, urging manufacturers to participate in that shared responsibility.

“Of al the CSPO that the producers are producing, just 64% has been taken up, and that is a long way from the 90% and above that needs to be reached,”​ he said.

“There is a real need to push that shared responsibility and everyone needs to really buy in here, and this is especially so when it comes to operationalizing decisions in support and promotion of CSPO.”​

Price premium not an issue​

China and India remain amongst RSPO’s top targets for expansion in the near future, both of which are known to be relatively price-sensitive markets – but the organization believes that this is not a major issue.

“We know that in India especially palm oil is a very important cooking oil in households and many of these are poor households so price is important to them,”​ said D’Cruz.

“The thing is that the difference in price between CSPO and regular palm oil is really not massive, and the price hikes as of late have are attributable to overall commodity price rises, not sustainability certification – importantly, as more and more producers are brought in to produce CSPO and this becomes the baseline, the smaller the price difference will be.”​

In comparison with other vegetable oils on the market, palm oil still has a significant price advantage as well.

“Palm oil remains the most versatile and affordable edible oil in various markets including India by far,”​ said Bek-Nielsen.

“There are hundreds of millions of consumers there who need to live hand-to-mouth, and in comparison with other oils such as soybean, palm oil is crucial for them.​

“For example, soybean oil has a US$400 premium above palm oil outside of the US, and a US$800mn premium in the US, so in the face of this, even if CSPO is a few dollars more than non-certified palm oil, this will be far less impactful on consumers compared to other oils.”​