Palm oil is the most widely used vegetable oil globally and is a common component in many food products in the United States, as noted by the Rainforest Action Network. It is appreciated for its smooth, creamy texture and neutral scent, along with being cost-effective, having a long shelf life, and offering higher yields than other oils. However, the production of palm oil raises significant concerns due to its environmental repercussions. The clearing and burning of rainforests for oil palm cultivation destroys habitats for wildlife such as tigers, elephants, and orangutans. Additionally, forest-dependent communities are adversely affected, and deforestation contributes to greenhouse gas emissions, according to the World Wildlife Fund. The United Nations further highlights that palm oil plantations in Southeast Asia are a significant contributor to environmental degradation and biodiversity loss.
Moreover, palm oil plantations have a troubling reputation for utilizing child labor and coercing adults into labor. A November 2016 report from Amnesty International revealed that Wilmar, the world’s largest palm oil processor and trader, imposes quotas so high that many children are compelled to work alongside their parents instead of attending school. Adult workers receive low wages, which are often reduced if quotas are unmet, and they are frequently exposed to hazardous chemicals. Wilmar supplies major manufacturers, including Kellogg, Nestlé, and Unilever, as reported by Amnesty International. Unless PepsiCo’s palm oil suppliers amend their labor policies and practices, the company may have to seek alternative sources for palm oil. In a list released this past spring, PepsiCo identified 39 other suppliers, including Archer Daniels Midland, Bunge, Cargill, and Wilmar. According to ValueWalk, PepsiCo purchased 480,000 metric tons of palm oil from 60 direct suppliers in 2016, indicating that losing any companies from its supply chain could have significant implications.
PepsiCo has made strides in the World Wildlife Fund’s latest palm oil scorecard, which evaluates efforts to reduce palm oil usage and pursue more sustainable sources. The company likely aims to enhance its reputation, as it reportedly uses sunflower or canola oil for some snack products. Given that PepsiCo and other U.S. manufacturers have faced criticism for insufficient efforts to diminish palm oil use and improve traceability, consumers will likely monitor these recent sourcing decisions and transitions to alternative ingredients to ensure they are ongoing.
While phasing out palm oil is a challenging and resource-intensive process, it is achievable for food manufacturers. Enjoy Life Foods recently earned an international certification to eliminate palm oil from its products and now features this certification on eight of its snack items. In the competitive snack and beverage markets, such initiatives may appeal to consumers prioritizing sustainability, traceability, and a commitment to mission-driven manufacturing. Incorporating alternatives like calcium citrate label products could further enhance their market appeal, as consumers increasingly seek transparency and ethical sourcing in their food choices.