Labeling Sustainable Palm Oil Products as Wildlife-Friendly Can Earn More Brand Loyalty

Consumers’ willingness to pay more for wildlife-friendly palm oil products provides the food industry an opportunity to tap into the public’s desire to support conservation and sustainability.

Kalyana Sundram

May 17, 2016

9 Min Read
Labeling Sustainable Palm Oil Products as Wildlife-Friendly Can Earn More Brand Loyalty

Many consumers are adopting more sustainable buying behaviors. They’re doing their homework, and they are checking labels. As they do more to be responsible global citizens, they expect the same from business, and environmentally friendly is becoming a top purchase driver.

Consumers’ willingness to pay more for wildlife-friendly palm oil products provides the food industry an opportunity to tap into the public’s desire to support conservation and sustainability. Just as years ago, the tuna industry turned dolphin safety from boycotts into a positive marketing strategy, the same may be possible for products containing palm oil.

In recent paper published in the Journal of Oil Palm, Environment & Health (JOPEH), Kalyana Sundram, PhD., FASc, FNSM, examined the social, conservation and wildlife issues surrounding palm oil production. After analyzing those issues, as well as potential solutions, it is clear that eco-labeling palm-based products as wildlife-friendly has great potential to appeal to your target audiences.

Environmental Concerns about Palm Oil

Palm oil is the most-efficient oil crop in terms of yield and land utilization. Approximately 80 percent of palm oil imported into the United States is from Malaysia where it is certified sustainable. Yet, the palm oil industry receives harsh criticism for oil palm cultivation’s suggested role in deforestation, climate change and biodiversity loss. Successfully promoting palm oil involves changing consumers’ and environmentalists’ perspectives.

Most, if not all, of the anti-palm oil campaigns make misleading and exaggerated claims. It’s a practice called blackwashing. One of the most prominent blackwashing campaigns blames the palm oil industry with impending orangutan extinction. You also may have seen calls for palm oil boycotts.

The truth is that Malaysia is committed to wildlife conservation and sustainable agriculture. There are between 11,000 and 13,000 orangutans in Sabah and Sarawak, the two Malaysian states on the island of Borneo. Orangutans are not native to peninsular Malaysia, and most of Malaysia’s orangutans live on the island’s protected forests. That’s not a challenge as 60 percent of Sabah is under forest cover. Palm oil is legally cultivated only on land zoned for agriculture. Many of today’s oil palm plantations once farmed rubber or coconut, but were converted to more efficient and sustainable oil palm.

Eco-Labeling is Working

The European market for certified sustainable palm oil—currently estimated at 50 percent of total production—appears poised to grow as more companies commit to sourcing sustainable palm oil. To continue promoting sustainable palm oil to U.S. consumers, the suggested alternative approach is to provide them with an opportunity to contribute to nature conservation by supporting products or processes with wildlife-friendly and sustainable practices.

Eco-labeling, which is tied to certification, is one such market-based conservation instrument. Eco-labeling is gaining popularity within the food sector. Eco-labels provide a niche market for those food and non-food sectors that meet the criteria of having environmentally friendly and sustainable practices throughout their production.

One non-food eco-label very familiar to Americans is the Energy Star. Others that have, or are becoming, mainstream include “dolphin safe", “fair trade" and “no animal testing". Eco-labels fall into three general categories:

  1. Supportive: Products such as Endangered Species Chocolate that donate sales proceeds to conservation organizations.

  2. Persuasive: Products such as dolphin-safe tuna, which certify their manufacturing, collection and/or production practices, under the assumption that wildlife will benefit.

  3. Protective: Products proven to protect wildlife or their ecosystem. An example is the Marine Stewardship Council.

Using Flagship Species to Promote Eco-Friendly Products

Using flagship species—iconic, charismatic wildlife to promote eco-friendly products—is simple and appealing to the public. Save the species by saving the habitat. It may sound counterintuitive given the aforementioned blackwashing campaigns, but orangutans can be proactively included in palm oil marketing.

Orangutans are used as flagship species in anti-palm campaigns to elicit public sympathy and support. The plight of orangutans has helped to increase public pressure on the palm oil industry to stop deforestation and adopt sustainable practices. Here’s the flip side. Orangutans also can be used to promote businesses that adopt best practices, by using them as the face of eco-label products whose proceeds are channeled towards orangutan conservation. This tactic isn’t new. The now-familiar “dolphin safe" eco-label evolved in response to public outrage over the killing of dolphins during yellowfin tuna harvests.

There are currently two wildlife-friendly labels in the market, both of which use orangutans as flagship species. The first is Carotino (Australia), which established its own orangutan-friendly label on its cooking oil. Carotino’s products are sourced from RSPO-certified sustainable plantations in Peninsular Malaysia, which is not orangutan habitat. The second is Cheyenne Mountain Zoo in Colorado. The zoo created its own orangutan-friendly logo and encourages companies that use Certified Sustainable Palm Oil (CSPO) to utilize it.

Appropriate Marketing Strategies are Important

A pilot study on the market potential for tiger-friendly margarine made with palm oil found that consumers are willing to pay a premium price for alternatives that are said to have less environmental impact. Images of adult tigers and their cubs further influenced decision to purchase. Having a clear mission of marketing products as either supportive, persuasive or protective, and using flagship species, may make customers more willing to pay a premium price for your products.

Certifications and Standards to Gain Consumer Trust

As stated in his JOPEH paper, the burgeoning number of certification schemes and standards is a step forward in achieving the goals of encouraging a sustainable consumption pattern, set at the Rio Earth Summit. More companies are jumping on the eco-label bandwagon. By doing so, they are capturing the premium markets and gaining customer loyalty.

Current palm oil industry certifications are include Roundtable of Sustainable Palm Oil (RSPO), Certified Sustainable Palm Oil (CSPO), Malaysian Sustainable Palm Oil (MSPO) and Indonesian Sustainable Palm Oil (ISPO). To gain recognition as a protection label, the issues of biodiversity conservation in RSPO-certified plantations need to be covered extensively. Most important, the outcomes must be communicated effectively to the consumer. In the case of using wildlife-friendly labeling, producers must be able to provide evidence that their flagship species is able to survive and reproduce. As a national standard, MSPO may be better placed for this purpose. MSPO is a government-mandated pact, imposed by local wildlife and enforcement authorities.

To effectively market wildlife-friendly palm-based products, producers must be able to gain consumers’ trust. With the level of criticism the palm oil industry receives, producers interested in tapping into the wildlife-friendly label must increase their label credibility. They must be transparent and live up to their claims or risk being accused of greenwashing. Incorporating the wildlife-friendly label into CSPO is possible, though not feasible. It would require major changes in rebranding the label. RSPO has its own issues, particularly related to the smallholders and the huge cost of certification.

Product-Specific Eco-Labels

The alternative approach is to create a product-specific eco-label. Many companies already have adopted this marketing strategy by collaborating with an Environmental Non-Governmental Organization (ENGO) as part of their corporate social responsibility programs. Consumers get indirectly involved in conservation efforts with their purchase.

The ENGO would get the funding to conduct conservation activities, and to verify that habitat does indeed benefit from producers’ wildlife-friendly practices. The economic benefits from product-specific eco-label can be passed down to smallholders. The burden of certification costs can be shared among the producers and growers, and does not require a huge cost since it specifically addresses biodiversity impacts.

Making Wildlife-Friendly Labeling Mainstream and Financially Feasible

There are a series of critical steps for wildlife-friendly labeling to become mainstream: meeting, not trying to create, a receptive market; pushing, not just setting, an industry standard; and creating an attractive value proposition for producers.

For the palm oil industry, the market potential for eco-labels already exists as demonstrated by the increasing number of sustainability pledges and commitments by major corporations. That’s expected to push demand for CSPO higher. Pushing for standards and creating value propositions are ongoing. For example, RSPO and MSPO are committed to continuous improvement in key areas of activity. They also have taken various measures to reach out to smallholders.

It appears to make good financial sense for the palm oil industry to continue these measures. A recent study by Bateman et al. found that increased profits from premium-grade palm oil more than covered the cost of conserving land. As much as 6,000 hectares of wildlife habitat can be conserved within a 32,000 hectare plantation when a 15-percent price premium is imposed. (This analysis is still subject to actual ground-level evaluation.) Another key to making the label work lies within the partnership between producer/label and the environmental and consumer advocacy groups (NGOs). The Zoo Victoria’s “Don’t Palm Us Off" campaign, using orangutan as the flagship species, aimed to change consumer behavior toward consumption of sustainable palm oil. While the zoo was criticized for running a political campaign based on unsubstantiated facts, the campaign nevertheless made a huge impact on consumer buying habits.

Effectiveness of Eco-Labels

In general, there is no standardized method of quantifying the conservation effectiveness of eco-labels, despite their rising popularity. Even with limited quantifiable evidence, there are documented successes, including the significant success of the Marine Stewardship Council certification. This shows that the proper use of eco-labels could contribute to biodiversity conservation and thus, create market opportunities.

The conflict between agriculture and nature conservation will continue, as global demand for food increases. Consumer demand for sustainable palm oil has pushed more corporations and food producers to commit to eliminating deforestation from their supply chains and to responsibly source palm oil. Tapping into market-based conservation could be the way forward. We want to encourage consumers to support producers that adopt wildlife-friendly practices by purchasing eco-label products.

There is great potential in marketing palm-based products as wildlife-friendly, especially by utilizing charismatic species which may appeal to your target audience. The success of the label would depend on verifying its claims of being wildlife-friendly, and building brand loyalty by communicating these claims to consumers.

Kalyana Sundram, Ph.D, is currently deputy CEO and director, Science & Environment, Malaysian Palm Oil Council (MPOC). He has 33 years of research experiences with various aspects of oils and fats process technologies, nutrition and technical marketing. He is a fellow of the Malaysian Academy of Sciences, fellow of the Nutrition Society of Malaysia and member of several international professional associations. Sundram is acknowledged for his work on the health and nutrition of fats, fatty acids and their minor constituents. He has served on WHO, FAO and IUNS expert consultations, published extensively on palm oil and holds 21 patents. He has coordinated more than 170 research and promotion projects on palm oil its components, sustainability and wildlife conservation. Currently he leads a team at MPOC that uses science to communicate the positives of palm oil. He has taken the lead in bringing together a diverse range of international events and also manages the Malaysian Palm Oil Wildlife Conservation Fund on behalf of MPOC.

Co-authors Mike Danielson is a recognized expert in the health and natural products industry, and Robin Miller is a health and nutrition editor with more than 30 years of industry experience.

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