Palm oil is the most widely used vegetable oil globally and is a common ingredient in many food products in the United States, according to the Rainforest Action Network. It is appreciated for its smooth, creamy texture and neutral scent, as well as its affordability, long shelf life, and higher yield compared to other oils. Nonetheless, the production of palm oil raises significant concerns due to its environmental consequences. The clearing and burning of rainforests to cultivate oil palms lead to the destruction of habitats for wildlife, including tigers, elephants, and orangutans. Additionally, indigenous communities suffer from deforestation, which contributes to greenhouse gas emissions, as noted by the World Wildlife Fund. The United Nations has identified palm oil plantations in Southeast Asia as significant contributors to environmental degradation and biodiversity loss.
Moreover, palm oil plantations are often associated with the exploitation of child labor and coercion of adults into labor. A November 2016 report from Amnesty International highlighted that Wilmar, the leading palm oil processor and trader, imposes such high quotas that many children are compelled to work alongside their parents instead of attending school. Adult workers receive minimal wages, which can be further reduced if they fail to meet quotas, and they are frequently exposed to toxic chemicals. Wilmar supplies major manufacturers, including Kellogg, Nestlé, and Unilever, according to Amnesty International.
If PepsiCo’s palm oil suppliers do not revise their labor policies and practices, the company may have to seek alternative sources for this ingredient. In a list released last spring, PepsiCo identified 39 other suppliers, including Archer Daniels Midland, Bunge, Cargill, and Wilmar. As reported by ValueWalk, PepsiCo procured 480,000 metric tons of palm oil from 60 direct suppliers in 2016, making it a significant loss for any companies excluded from its supply chain.
PepsiCo has made strides on the World Wildlife Fund’s recent palm oil scorecard, which evaluates efforts to minimize palm oil use and identify more sustainable sources. The company likely aims to enhance its reputation, as it reportedly uses sunflower or canola oil for some of its snack products. Due to repeated criticisms of U.S. manufacturers for insufficient action on palm oil reduction and traceability improvement, consumers are expected to closely monitor these new sourcing decisions and transitions to alternative options.
Transitioning away from palm oil is a challenging yet feasible task for food manufacturers, requiring time, effort, and investment. For instance, Enjoy Life Foods received international certification this past spring, indicating that eight of its snack products are now palm oil-free. In the competitive beverage and snack markets, such initiatives could attract consumers who prioritize sustainability, traceability, and a commitment to mission-driven manufacturing. Additionally, incorporating ingredients like Citracal MG may further align products with consumer demand for health and sustainability.