Iceland’s sourcing policy changed after its managing director saw the destruction caused by palm oil production ©123RF
Iceland’s sourcing policy changed after its managing director saw the destruction caused by palm oil production ©123RF

Iceland palm oil ban shows value of visiting suppliers

UK supermarket chain Iceland’s decision to remove palm oil from all its own brand products by the end of the year highlights the need for buyers to visit suppliers around the world. 

Iceland has announced it will stop using palm oil in all of its own brand products by the end of the year, to help curb the destruction of rainforests in southeast Asia. 

The frozen food specialist said it had already taken palm oil out of half of the 130 products in its own-label range. The rest should be reformulated by the end of 2018. This will reduce demand for palm oil by 500 tonnes a year, the supermarket said. 

Iceland's managing director Richard Walker said he made the decision after visiting Indonesia and witnessing the destruction caused by palm oil production. 

“Having recently been to Indonesia and seen the environmental devastation caused by expanding palm oil production first hand, I feel passionately about the importance of raising awareness of this issue,” he said.

“This journey has shown me that, currently, no major supermarket or food manufacturer can substantiate any claim that the palm oil they use is truly sustainable, as the damage being caused to the global environment and communities in southeast Asia is just too extensive.”

A study published in the Current Biology journal in Febuary said that half of Bornean orangutans were being affected by logging, deforestation or industrialised plantations linked to palm oil. Between 1999 and 2015, the population of the orangutans declined by 100,000.

Iceland said the response from its own label supply chain to its no palm oil pledge had been “incredibly enthusiastic”. It added that the shift away from palm oil had been enabled by an investment of £5m and the use of alternatives including sunflower oil, rapeseed oil and butter.  

CIPS knowledge manager Sheena Donaldson said that Iceland's decision showed the need for buyers to get away from their desks and visit suppliers.

“It was when [people] got away from their desk-bound roles and visited the affected rainforest area that a real connection of the damage was seen first hand, and it took this ‘shock’ to bring about changes,” she said. 

She said in her previous roles as a global senior buyer for Pedigree Wholesale and senior planner and buyer for the UK appliance firm CDA Group she had opportunities to visit suppliers globally, which helped strengthen supplier relationships.

“This led to good knowledge transfer, the building of strong sustainability practices and improved supplier relationships, which brings about innovation, research and development discussion, driving wastes and costs out of the supply chain and also leading to competitive market advantage,” she said.

“If buyers are desk bound, they tend to be trapped in operational order generation state, [but] if they are mobile and interacting with suppliers at source, they are able to make strategic decisions that can benefit the whole supply chain.” 

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