The oil palm industry in Malaysia is at a tipping point. It is faced with multi-dimensional challenges that need action and long-term vision. The exponential growth in the cultivation of oil palm has helped feed the world’s growing demand for food, feed, fuel and fibre, and brought about many economic benefits.Read more »
Malaysia is a country that is built for business and trade. We are relatively small geographically and in population terms; but we have a dynamic economy, a skilled and educated workforce, and we are situated at the crossroad of strategically important trading routes.Read more »
Many misunderstandings exist about palm oil, with several myths having found their way into public discourse due to aggressive campaigning by NGOs. These public relations campaigns have several disguised goals. The underlying intention, however, is to tarnish the image of palm oil in the eyes of the consumer, and ultimately, influence their purchasing behaviour.Read more »
A recently-published study on European consumer healthiness evaluation of ‘free from’ labelled food products has concluded that such foods appeal more to consumers. It aimed at determining how ‘free from’ labelling shapes consumers’ perception and whether the absence of an ingredient is considered an indicator of improved nutritional value of food products.
The study was conducted by researchers from the renowned Swiss Federal Institute of Technology in Zurich and the Brussels-based European Food Information Council, a non-profit organisation that ‘stands up for science-based information on food and health’.
They came to the conclusion that products with a ‘free from’ label are considered healthier than products without the label; and that the strongest effects occurred for ‘GMO-free’ and ‘palm oil-free’ labelling.
Under the study, an online survey was conducted with 500 respondents in France, Poland and Sweden and 450 in the UK. Four labels – lactose-free, gluten-free, GMO-free and palm oil-free – were tested using different product categories.
Each label was shown on three different food products that are common in all four countries: bread/pasta/cookies products with a ‘free from gluten’ claim; cheese/milk/yoghurt with a ‘free from lactose’ claim; oil/maize/chocolate with a ‘free from GMOs’ claim; and margarine/chocolate spread/chocolate with a ‘free from palm oil’ claim. The sample mock-up products were designed based on images of real products available on the European market.
The healthiness perception was evaluated by comparing products with the ‘free from’ label to identical products without the label, and asking specific questions. Potential factors for the healthiness evaluation and the intention to pay a price premium were nutrition knowledge, information-seeking on food packages, preference for food naturalness, general health interest, trust in actors in the food domain, and ‘affect’ regarding the absent ingredients. The concept of ‘affect’ was measured for each label separately by asking participants to indicate their feeling(s) when they think about the different ingredients.
With respect to palm oil, the study stated that there is currently no official (i.e. legally permitted) label for products in the European market to indicate that the product is free from palm oil. However, individual retailers or manufacturers use their own labels to highlight that their products are ‘palm oil-free’. The study also noted that there is one label used for food packaging, which indicates the use of palm oil certified by the Roundtable on Sustainable Palm Oil.
Results of the study
The findings indicated that products with a ‘free from’ label were considered healthier than products without such a label. The largest deviations from the average response were observed for the ‘GMO-free’ and ‘palm oil-free’ labels.
Country effects were observed as well. The largest differences in the evaluations were observed for ‘GMO-free’ and ‘palm oil-free’, with less significant differences for ‘lactose-free’ and ‘gluten-free’ labels. Participants from France evaluated chocolate, chocolate spread and margarine labelled as ‘palm oil-free’ and maize, oil and chocolate labelled ‘GMO-free’ as being healthier compared with respondents from Sweden and the UK.
A majority of the participants, independently of the country of origin, evaluated food products with the ‘GMO-free’ and the ‘palm oil-free’ labels as being healthier than identical products without such labels. The effects appear to be less significant for the ‘gluten-free’ and the ‘lactose-free’ labels.
The researchers suggested that these sentiments may be due to French policy: ‘Public debate and negative media coverage [in France] as well as the contemplated tax ban on palm oil and restrictive regulation of GMOs in food and crops could be drivers of the negative image these ingredients have in the French consumer sample.’
Moreover, the results appeared to indicate that the removal of something (e.g. lactose) or the absence of an ingredient (e.g. palm oil) that holds negative connotations in consumers’ perception can lead to a more positive evaluation of the product displaying such labels.
Indeed, the most consistent and strongest country-specific effects for both healthiness evaluation and intention to pay a price premium were observed among French participants in the context of ‘GMO-free’ and ‘palm oil-free’ labelling.
French respondents also reported the strongest negative connotation for these two ingredients. Consumers considered policy to be based on the judgments of experts; and policy concerning the regulation of GMOs and palm oil might have significantly influenced individuals to intrinsically assume that products containing these ingredients are less safe or less healthy.
The researchers argued that certain labelling contains important information for consumers with food allergies (e.g. to gluten) or intolerances (e.g. for lactose). The question is whether these labels may also be a purchase incentive for consumers who are not required to check their diet for these ingredients, but rather attribute false characteristics, such as healthiness, to products due to the labelling.
Past research has shown that consumers do not always interpret labels as intended by food business operators. In the case of ‘free from’ labels, consumers might interpret the label as a sign of unpalatability; as being only useful for certain consumer groups; or as an indicator for a healthier food option.
Currently, the number of ‘palm oil-free’ labelled products in France is larger than in any other country. Extensive market research, last conducted in 2016, has shown that an increasing number of food business operators use ‘no palm oil’ or ‘palm oil-free’ claims/labels on a large number of food products.
The number of products bearing such claims in France increased from 312 in 2013, to 666 in 2014 and to 692 by the end of 2015. The number of brands using such claims also increased from 39 in 2013 to 60 in 2014 and to 66 in 2015. It can be assumed that French consumers have been confronted with ‘palm oil-free’ labels over a long period of time and through increasingly virulent commercial campaigns.
Noteworthy is that the study confirmed an increased consumer willingness to pay a price-premium for ‘free-from’ labelled products. The study showed that, in particular, French respondents were the most receptive to ‘palm-oil free’, and attributed this to public debate and negative media coverage.
Food labels influence and shape consumers’ food shopping behaviour. This change of behaviour must clearly be factored in when assessing the relevance and legality of certain ‘free from’ claims. The French respondents expressed the strongest intentions to pay more for ‘palm oil-free’ products.
However, an author of the study reportedly stated: “In my view the industry should be cautious with using ‘free from’ labels, however. It could create mistrust if consumers realise that ‘free from’ products may not be healthier than comparable products with [the ingredient].”
The study appeared to confirm that the negative campaigns and discriminatory policies in France reach the consumers and influence their purchasing decisions. Obviously, this is deceptive, anti-competitive and negative for the palm oil industry.
The outcome of this study could also be interpreted as proof of the damage caused by ‘palm oil-free’ labels and campaigns. French consumers really believe that products with this infamous label are healthier. This perception must change. The industry needs to step up its educational campaigns vis-à-vis consumers and, where necessary, take legal action against denigratory, deceptive and anti-competitive practices.
Much of the media debate surrounding palm oil in recent months has focused on the European Parliament’s proposed ban on palm oil biofuels, as part of the revised Renewable Energy Directive (RED II).
This focus is understandable – the RED II represents an imminent threat that must be opposed forcefully. Malaysia is leading the opposition to the proposed ban.
This article, however, is not about the RED II. Even in the midst of such a critical period, Malaysia has a responsibility to keep its focus on the wider picture of the palm oil debate not just in Europe, but globally. Our approach must be strategic and a long-term one.
We cannot only focus on what is today’s threat, in order to wear the mantle of thought-leadership, but need to look ahead to what may be the challenges in future. Why? The better we can think and understand the challenges, the better the chance to mitigate and defeat them.
This does not only mean thought-leadership in relation to challenges. There are many of those coming over the horizon – from the EU’s new approach to addressing deforestation to the debate over mutual recognition of certification schemes, and many more.
We must also be brave and set forth a positive, pro-active strategic direction for the future, based on positive messages about Malaysia and its overall conduct of the palm oil industry. A starting point should be an ambition to position Malaysia as a global leader in agriculture – in technology, innovation and development throughout the palm oil supply chain.
Several examples spring to mind. Mapping the oil palm genome is a giant leap – it is beneficial in and of itself, in that it enhances scientific understanding. More importantly, it will have practical consequences benefitting the environment, rural development and economic growth.
We must think of this achievement not in academic terms, but how we position Malaysia as a global leader in agriculture, particularly in oil palm cultivation.
The use of methane capture technology is another major step forward. Ninety-two methane-capture facilities have been completed; over 150 more are in the planning or construction stage. The Malaysian government and industry are working on this together.
This approach will at once reduce carbon emissions, improve profitability through the alternative use of biogas and help ensure future market access for Malaysian palm oil, as greenhouse gas emission standards around the world become stricter.
If this sounds too good to be true, it isn’t. It is simply the fruit of technological innovation, government support and industry pro-activeness.
The focus on yield enhancement through advanced breeding and tissue culture propagation (as opposed to land-bank expansion) is a world-leading effort from Malaysia to prove that sustainability and economic development do not have to be in opposition; rather, they are bedfellows.
The seeds for this success have already been sown. At every opportunity we must remind the world, and especially our critics in Europe, of this far-sighted approach.
Similarly, the development of the Malaysian Sustainable Palm Oil (MSPO) certification scheme is far more significant at a global level than perhaps many in the industry or even in Malaysia appreciate.
The MSPO is not merely a new, or locally-driven, standard. It is at the forefront of driving an approach to palm oil sustainability based not on whimsical or arbitrary criteria conceived in the backroom of an NGO headquarters, but on internationally-recognised standard-setting methods such as those used by the International Standards Organisation and United Nations Development Programme.
Send simple, clear messages
Now we must accelerate communicating our vision to the world. We must understand that communicating in Europe and other western markets is different – they do not have the same intimate knowledge of palm oil as Malaysians.
There is already some ingrained prejudice or misguided idealism in the minds of western world consumers. So, we must be more direct by using simpler, clearer messages that frame Malaysia in a positive way. Academic messages don’t resonate – they are not sharp or simple enough for the public and media discourse.
We are talking about the sweet spot for a successful palm oil strategy internationally; long-term thinking, positive messages and simple communication.
An additional factor can be to re-assess our audience. We have been very successful with the trade audience, moving conversations away from negative Green NGO talking points to issues of trade and economics.
France, Spain and other EU member-states support Malaysia in the European RED II debate, precisely because of this strategy. A critical part of our strategic thinking is how to expand this success to reach other sympathetic audiences in European capital cities – the pro-development and community advancement groups, for example.
Another opportunity lies in the pro-innovation and investment audiences in Europe who are interested in agricultural progress and innovation.
We must be realistic that some – if not most – of the environmental or sustainability community will not defend palm oil. Therefore, let us spend our time and money more wisely.
That means working with our current friends, and finding new friends to outnumber our critics. We must raise our eyes to the horizon and aspire to lead the agenda of debate globally.
Datuk Lee Yeow Chor
This is an edited version of an opinion piece published by The Star on April 13, 2018.
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