Kellogg pushes sustainable palm oil: Is it enough?

Palm oil is listed as the fourth ingredient in Kellogg’s Eggo Buttermilk waffles, and the sixth ingredient in the food company’s blueberry frosted Pop-Tarts – in both cases, a small part of a best-selling recipe.

But even the smallest ingredients can have a big impact. Kellogg found that last November when conservation groups rallied outside its Battle Creek, Mich. headquarters demanding the world's leading cereal company change how it gets an ingredient that has threatened tropical rain forests.

Kellogg announced last week it will require its palm oil producers to source palm oil in a way that is “environmentally appropriate, socially beneficial, and economically viable” by 2015, in addition to the work the company says it has done on sustainable palm oil initiatives since 2009. In Indonesia and Malaysia alone, over 30,000 miles of tropical rain forests have been destroyed from increased palm oil harvesting, according to Catapult, a consultancy group that works on environment and social issues. 

This has caused natural habitat loss for endangered species such as the orangutan and Sumatran tiger in places like Indonesia, Malaysia, Colombia, and West Africa. 

"As a socially responsible company, traceable, transparent sourcing of palm oil is important to us, and we are collaborating with our suppliers to make sure the palm oil we use is not associated with deforestation, climate change or the violation of human rights," says Diane Holdorf, chief sustainability officer at Kellogg, in a release. 

Palm oil is a $50 billion per year commodity used in about half of all packaged goods, and US imports have increased nearly five times over in the last 10 years, according to Boston-based Green Century Funds. The oil is used in products like Pringles and Cinnabon Snack Bars (though no palm oil is used in Kellogg cereal), and Kellogg is a “significant” palm oil purchaser, says Green Century Capital Management, Inc. Kellogg made over $14.8 billion in sales in 2013, and is the second largest producer of cookies and crackers.

Kellogg also works with Wilmar International Ltd., the world’s largest palm oil trader, which has been accused of using illegal and unsustainable harvesting methods. However, since Kellogg took up a pledge to promote sustainable palm oil practices, it has pressured the company to clean up its act. In December, Wilmar signed a “No Deforestation, No Peat, No Exploitation” policy.

“Having Kellogg join is huge,” says Joao Talocchi, US palm oil campaigner at Greenpeace. “This will impact how palm oil is produced all over the planet.”

He says creating better methods of palm oil harvesting aren’t just good company public relations – by changing these methods, companies ensure that ecosystems stay sustainable for years to come, and companies can still use palm oil in the future.

Currently, if people want to create a palm oil plantation, they first drain peatlands (“really really rich in carbon and is important as a water source,” says Mr. Talocchi), then burn the area to the ground (“it’s much easier to burn than carry the material”), and then plant palms. Aside from devastating local ecosystems, this practice also has a social impact – indigenous people often live on land granted to companies to develop palm oil plantations, and there have been cases of labor abuse due to little accountability.

Now, he says, the goal is to push companies, like Kellogg, to trace where their palm oil is coming from, and hold their producers accountable for their practices.

Ideally, he says, palm oil plantations should be built on shrub or grasslands. Plantations should not be in areas of high biodiversity and where there are high levels of carbon in the ground, and producers need to have the consent of the local community. Having a major company on board like Kellogg helps pressure producers to re-evaluate their practices in order to keep business thriving, plus puts the spotlight on companies that don’t hold their producers accountable.

“The goal is not necessarily to have clean palm oil in US cereals but to have clean palm oil around the world,” he says.

Aside from this step forward, Talocchi says there is a ways to go. Many companies hold their producers accountable to the Roundtable on Sustainable Palm Oil (RSPO) standards, which he says don't go far enough. In response, Greenpeace, along with the World Wildlife Foundation, and several other NGOs created the Palm Oil Innovation Group (POIG) to create a more comprehensive, and potentially one day universal, sustainability audit for palm oil producers. Their charter includes standards for carbon, peatland, and pesticide level. Kellogg holds its producers to RSPO standards.

However, palm oil policy isn’t the only issue on Kellogg’s plate. Last fall, Kellogg locked out over 200 workers from a cereal factory in Memphis, Tenn. over labor and wage disputes. The workers’ union claims the lockout is illegal, but Kellogg says workers need to be more flexible with wages in order to keep the factory sustainable.