SUBSCRIBE

Breaking News on Industrial Baking & Snacks

Trends > Sustainability

How close is Walmart to meeting its 2015 sustainable palm oil deadline?

By Elaine WATSON , 05-Oct-2012

Walmart says it is confident it will reach its goal of using sustainably sourced palm oil for all of its private label products by the end of 2015, although it won’t give any details about how much progress it has made to date in North America.

While its UK subsidiary Asda recently revealed that 20% of the palm oil used in its store brands comes from segregated sustainable sources (with the rest covered by GreenPalm certificates), Walmart has not given out any figures this side of the Atlantic.

Walmart was the first retailer to have a product in North America featuring the RSPO (Round Table for Sustainable Palm Oil) trademark after using certified sustainable palm oil in its artisan fresh banana nut bread in February 2012.

We are confident we can make our 2015 goal

However, a spokesman would not say how far down the road Walmart is today on meeting its 2015 target, or how challenging finding cost effective sources of fully-segregated palm derivatives - the form of palm oil used by most food manufacturers - is proving in North America.

A spokesman said: “Based on current progress we are confident we can make our 2015 goal. We have items is multiple countries that bear the RSPO logo to help educate consumers of the steps Walmart is taking.”

Asked how Walmart is helping suppliers meet its targets and still produce private label products in a cost-effective manner, he said:

"Our goal is to make this a win for the environment, suppliers, and Walmart customers. We have spent a lot of time with NGOs, oil suppliers, finished goods manufacturers, and merchants to build a solid plan.”

GreenPalm offers an interim solution where sourcing fully-segregated palm oil products is not yet cost effective or practical

In a January 2012 policy document for suppliers outlining its palm oil sourcing strategy, Walmart said suppliers “must be working towards utilizing RSPO standards or equivalent for certified palm oil used in Walmart private brand products”.

But what options do Walmart's suppliers and other food manufacturers keen to use sustainable palm oil have?

If they want to use the RSPO trademark (above right) and associated claim ‘This product contains certified sustainable palm oil’, they must use palm oil that has been segregated throughout the supply chain and is traceable directly back to its RSPO-certified source.

A second option – mass balance – combines some segregated RSPO certified oil and some standard oil, and allows users to use the RSPO trademark (with the word ‘Mixed’) and the claim: ‘Contributes to the production of certified sustainable palm oil’.

However, both products currently command a significant price premium owing to the expense of physically segregating RSPO-certified palm oil throughout the supply chain ('standard' palm oil is a commodity that is typically intermingled at every stage of the supply chain).

The third - most cost-effective - option, is for buyers to purchase certificates guaranteeing that a tonnage of palm oil/derivatives equivalent to the tonnage they use has been produced from RSPO-certified plantations.

While they can't guarantee the actual oil they are buying is sustainable, they at least know the amount they use has been produced sustainably and can use the GreenPalm logo (above left) and associated claim: ‘Supports the production of RSPO-certified sustainable palm oil’.

WWF: GreenPalm offers a platform for immediate action and sends the right signals to producers

Although some marketers worry that GreenPalm's 'supports' claim is not as appealing to consumers as the RSPO 'This product contains' claims, it offers an interim solution for where sourcing fully-segregated products is not cost effective or practical, World Wildlife Fund Vice President of Agriculture Dave McLaughlin told FoodNavigator-USA. (Click here for our interview with Dave.)

They are also increasingly recognizing that using GreenPalm to try to stimulate more RSPO-certified production now might be the only way to create the critical mass of RSPO-certified oil at source required to make fully-traceable RSPO-certified products affordable in 2015, he said.

"With regards to Walmart, I do believe after our June meeting they have changed their thinking [and recognize that stimulating more certifications via GreenPalm will make it easier to move to physical traceable supply chains in future], or at least are more inclined to the process that emerged from the June discussions. 

"Their volumes are relatively small so they could probably meet the commitment, but yes, there will be added cost."

Cost remains a major hurdle

Speaking to us in April , Cargill product line manager, tropical oils, Mohit Gupta, said that the US was starting to catch up with Europe in the sustainable palm stakes, but that cost remained a major hurdle for firms wanting to buy segregated fractions in particular.

He said: “The US is catching up a bit. We’ve seen a number of customers who have taken education around the issue and are in the process of considering their options.”

But he added: “Cost still remains the biggest inhibitor in the industry… Sourcing segregated palm oil for the US is still extremely difficult due to economical shipping quantities and lack of customer commitment.

“It is still very hard to source fractions for the US market, which does not consume olein as much as stearin. However, RSPO has made an exception and one can buy segregated RBD (refined, bleached and deodorized) palm oil and sell mass balance stearin against it on a 1:1 ratio.”

While all four of Cargill’s US palm oil refineries have been audited by the RSPO, “demand is not yet enough for all refineries to start supplying in full scale”, said Gupta.

GreenPalm: ‘We have had a lot of engagement with North American companies’

GreenPalm general manager Bob Norman said he was encouraged by some recent developments in the US on sustainable palm, although progress has been faster in Europe.

He said: “We have had a lot of engagement with North American companies.  As well as attending the IFT, GreenPalm participated in the WWF/CGF Sustainable Palm seminar in Washington in June.”

However, “We are yet to see a lot of the interest translate into actual membership of GreenPalm”, he acknowledged.

We’ve seen three new members from North America since June.  But at least the subject matter is getting on people’s radars."

Click here to read our interview with WWF's Dave McLaughlin.

Related products

Key Industry Events

 

Access all events listing

Our events, Events from partners...