By Lorraine Mullaney

- Last updated on GMT

Related tags Palm oil Sustainability

The Cree Indians predicted that the white man would realise that he couldn't eat money only when the last tree had been cut down, the last fish caught and the last river poisoned.

But some would argue that westerners are finally learning to respect our planet. Exhausted with the egocentricity of our multi-option society, consumers are now yearning for higher standards of decency and respect, which means industry must follow, according to Jens Lönneker of the Rheingold Institute for Qualitative Market and Media Research. "It's no longer about what the brand does for the consumer," ​he says, "it's about the brand proving that it is of benefit to the community."

Judith Murdoch, marketing controller of AAK, manufacturer of edible oils and fats for the food manufacturing and baking industries, believes consumers care more about price and that retailers are driving sustainability, under pressure from environmental groups and the media. "Food quality and price remain greater concerns for the majority of hard-pressed consumers than the sustainability of ingredients,"​ she says.

Whatever the driver, the consensus is that the issue isn't going away. Neil Blackburn, supplier director of food for Univar said: "Ignore sustainability at your peril. The world has woken up to the fact that we can't continue the way we have been doing. That's the world we live in now."

Scott May, vice president of sweet goods and dairy at Givaudan agrees: "This is not a consumer fad, it's a need to ensure the ongoing supply of ingredients in the long run."

The hurdles

So what are the main hurdles for suppliers? Cost is the most obvious one. We may not be able to eat money but it sure has some buying power.

Tom Fowler is md of Garrett Ingredients, a firm that supplies fat to the ice cream industry in the form of hydrogenated palm kernel oil. His firm offers a sustainable and a non-sustainable option. He says cost issues mean that larger customers are more likely to be in a position to take up the sustainable option. "In nine out of 10 cases the sustainable option is more expensive,"​ he says. "The actual certification and the traceability trail drive the additional cost because systems vary widely, which is inefficient. New systems are helping but there needs to be an industry standard that everyone buys into."

The state of the global economy doesn't help. "If we were in a better economic state there would be a better chance," ​he says. "Whenever there is an on cost, it's going to be resisted."

But it's not all about money. Some sustainable ingredients are not easily available, according to bulk margarine and fat manufacturer Cardowan Creameries. The firm has no problems sourcing sustainable palm oil. However, stearin is harder to source, according to national sales manager Kenny Young, who highlights the impact this has on the on-pack claim of full certification.

Allied Bakeries claims the majority of its palm oil is certified, segregated and sustainable. "However, some ingredients that are created from palm oil, such as emulsifiers, are not yet available as sustainable versions,"​ says Nick Law, operations director.

May says traceability is the biggest obstacle in running Givaudan's ethical vanilla sourcing programme because there are so many individual farmers in Madagascar. "Unlike crops grown on giant plantations producing significant volumes, we are working with 80,000 farmers, each with a plot the size of a room."

Givaudan employs an agronomist to work with individual farmers on the ground and, at the same time, monitors the fields using GPS mapping. Each farmer's field can be individually identified and the yield calculated.

Edible oils and fat supplier AAK regards supply chain complexity to be the key obstacle to sustainable palm oil production. "Oil gets intermingled at every stage of the production process," ​says marketing controller Judith Murdoch. "Developing and maintaining separate, segregated supply chains adds cost. As consumers, we support the idea of sustainably produced ingredients. But there's little evidence to suggest we're prepared to pay more for them."

The solutions

Back to the price tag. But AAK thinks the way around this is another type of tag: certification. "The GreenPalm certificate trading programme is designed to provide a means by which firms can support sustainable production without, necessarily, having sustainably produced material in their products,"​ says Murdoch.

"By by-passing the physical supply chain completely, GreenPalm is playing a crucial role in developing sustainable supplies, and enabling manufacturers and retailers to contribute to the cause at a price they can afford."

Murdoch claims GreenPalm's role will diminish as sustainable supplies increase and costs reduce but it will continue to be useful for complex blends, fractions and palm kernel oil.

Blackburn praises the order and common sense that certification schemes bring. "It's so easy to get distracted by pressure otherwise as there are so many pressures to deal with, such as employment law and supply chain issues,"​ he says. "As long as these bodies are organised and constructed under the right circumstances you can make progress. Without them, you get opportunistic players hijacking the sustainable process for pure short-term financial gain."

But Tim Lang, Professor of food policy at City University, argues: "A few rather weak certification systems don't cut it. Anyone in the know knows we need a system shift not tinkering."

Lang calls for common frameworks. "The current government is actually letting food policy drift,"​ he says. "The last government was slowly and reluctantly but at least beginning to integrate with food policy, connecting international issues with local ones. DEFRA's national food strategy Food 2030 made an interesting commitment. People in Europe have asked me: 'Why has that interesting development from Britain stopped?' Countries like Australia are now running with it. It knows it's got to change its food policy. In Britain we're living in cuckoo land."

Tom MacMillan, formerly of the Food Ethics Council agrees: "While ideas for resource efficiency in the food sector can be helpful, where we most urgently need ingenuity is in economic and social policy."

AAK's Murdoch thinks legislation is an unlikely scenario. "There's widespread agreement that the move towards sustainability should be voluntary,"​ she says. "However, the government could make a positive contribution by publishing its own supplier guidelines in support of sustainably sourced ingredients."

Fowler of Garrett Ingredients concurs with the importance of having one common scheme to clarify industry goals. But he stresses the need for a global scale. "The slightest little hiccup on the other side of the world now has a huge part to play in what goes on in the UK. The situation we are in is very uncertain. We need to be joined up globally in everything we are doing."

But how can government in the UK legislate on a global scale? Young of Cardowan Creameries says: "Companies like New Britain Palm Oil lobby very hard here in the UK and in Europe but it's difficult for a UK government to legislate on a product that is produced overseas. Palm oil production has no direct impact on the environment or habitat in the UK so the government here has little power to legislate."

So where will the market move next? AAK's Murdoch thinks third-party certification will become a priority for key ingredients such as cocoa powder and soya. Univar's Blackburn thinks that sustainable ingredients will become more easily available because the pressure is coming from all sides and will hit new ingredients such as cereal crops.

"We are going to see more and more pressure on us as distributors,"​ he says. "Customers are asking more questions, which will bring new areas of accountability. There will be much more focus on the actual supply chain. The businesses that are focusing on sustainability at all levels will have the competitive advantage."

He stresses the benefits that ingredient sourcing brings to poorer countries. "To many countries they are gold. They can provide a sustainable level of income for those who wouldn't have any otherwise."

Not everyone shares his bright view, however. Certainly not Tim Lang. "Some corporations such as Unilever and Coca-Cola are making interesting commitments. But they get to a point and then they stop. Because no-one dares confront the consumer. The consumer has got used to seeing 30,000 different choices sitting on supermarket shelves it's embedded values. Governments must help set frameworks and we're going to have to invest massively now or there'll be a war."

Blackburn says the larger food manufacturers will have to lead by example because they are more able to absorb the extra costs required to take those processes on board. "Once you get to a critical mass of product, you have more power to negotiate with economies of scale."

Innovation helps meet the challenge. "We embrace the innovative approach to formulating new more sustainable products and it gives us a competitive edge. When I look at some of the products we're putting on the market today and the benefits they bring I would argue they are more cost-effective. Some of the enzymes we use to extend shelf-life, for example, prevent a lot of food from being thrown out."

Back to money again. We may not be trying to eat it but saving it may help us to ensure that we don't eat our way down to the last palm tree.

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