Lay’s and Quaker brands giant PepsiCo, which has often attracted criticism from campaigners over its palm oil supply chain, has introduced stricter rules for suppliers.
The US food and beverage behemoth’s new policies include not buying palm oil from any direct or indirect supplier that has been involved in deforestation over the last four years.
Go deeper with GlobalData
Discover B2B Marketing That Performs
Combine business intelligence and editorial excellence to reach engaged professionals across 36 leading media platforms.
PepsiCo has not been alone in facing criticism for the way the palm oil used in its products is sourced but the Walkers maker has featured in a number of NGO investigations into the way the ingredient is grown and cultivated.
The company said its new policies apply to “all palm and palm kernel oil that we use globally and covers our entire supply chain, from direct suppliers to production sources at the group level”.
The group sought to underline how the rules “should be applied across their entire operations and third-party supply chain and not limited solely to the palm oil sold to PepsiCo.”
It said: “Our policy applies to all of PepsiCo’s operations, subsidiaries, joint ventures, brands and products worldwide. It also serves as an expectation of our business partners, at the group level, that directly produce palm oil.”
US Tariffs are shifting - will you react or anticipate?
Don’t let policy changes catch you off guard. Stay proactive with real-time data and expert analysis.
By GlobalDataA spokesperson for PepsiCo added: “PepsiCo is committed to sustainable sourcing. Our goal is to ensure that all our palm oil is free from deforestation, new development on peatlands, and exploitation of people. These updates to our policy and approach reflect our ongoing determination to have a positive impact through additional actions that contribute to a sustainable palm oil system by working with peers, suppliers, civil society and others. We will continue to report publicly on our progress against these standards and the effectiveness of our sustainable sourcing efforts.”
Certain palm-oil suppliers in Asia have faced allegations of deforestation and of abusive labour practices.
One of the more recent probes came from US-based environmental organisation Rainforest Action Network, which last September claimed it had “definitive” evidence palm oil grown in protected peat forests of the Rawa Singkil Wildlife Reserve in Indonesia was being used in foods marketed by PepsiCo. Other companies including Nestle, General Mills and Mars were also implicated.
Rainforest Action Network said it had worked with PepsiCo on the changes to the food manufacturer’s policies on palm oil, which the NGO described as a “comprehensive shift in approach” to the ingredient.
“We commend PepsiCo for adopting a comprehensive policy and leading actions that, if implemented, will drive change in its palm oil supply chain as well as the broader palm oil industry,” Robin Averbeck, agribusiness campaign Director with Rainforest Action Network, said.
