As the price of sunflower oil soared following Russia’s invasion of Ukraine, Iceland has reverted to the use of palm oil in some of its products – something the retailer has been resolutely against since 2018. Retail Week’s Rosie Shepard and George MacDonald debate whether that was the right decision.

Still from Iceland animated Christmas ad

Iceland’s Christmas 2018 advert was banned for being too political

Rosie Shepard

Rosie Shepard, reporter: ‘It feels like putting costs before values’

Iceland caused quite a stir back in 2018 when its Christmas advert was banned from TV for being too political, but the grocer stood by its stance against the use of palm oil in its products and released the advert online.

The advert, featuring an orangutan who worried as its home was destroyed in order to produce palm oil, marked the commencement of Iceland’s pledge to remove the oil from its own-brand ranges.

It has since been viewed 90 million times on social media, and Iceland boss Richard Walker has been extremely vocal about the sustainability issues with palm oil, so why is it so easy for him to renege on his promises – does cost come before ethics?

It’s a question that has plagued retailers for the past few years, as the cost of being green comes at a higher price that they, and their customers, are not necessarily willing to pay. 

In the case of palm oil vs alternatives, when price was not a factor as the relative prices for all were the same, Iceland was a driving force for change in the industry.

Iceland advert still

Iceland’s controversial TV ad

While it’s understandable that Iceland could not have predicted the perfect storm that would impact its sunflower oil supply, turning back to palm oil feels like the business is indeed putting costs, and therefore profit, before values.

Walker wrote in his blog that he has made the “temporary” move, “with regret”, and that his stance on palm oil has not changed, but with little idea of how long the war in Ukraine – and the consequent soaring sunflower oil prices – will last, temporary measures could soon become a more permanent fixture.

The move has received backlash online, with customers disappointed that Iceland has rescinded what had become such a core part of its business proposition.

“Iceland’s boss has been extremely vocal about sustainability issues with palm oil, so why is it so easy for him to renege on his promises?”

Iceland should be given some credit for its honesty – the retailer could have quietly made the decision without any big announcement or explanation from Walker – but it doesn’t make it any less bitter a pill to swallow.

Could this become a pattern for other retailers when the cost of plastic alternatives, sustainable cotton or renewable energy comes too high? Climate change will be the ultimate cost if retailers choose to place profit before sustainability.

 

George MacDonald

George MacDonald, executive editor: ‘Those who judge Iceland from their sofas don’t carry the burden of obligation to the least well-off’

Iceland’s decision to switch to palm oil again because of the impact of Russia’s invasion of Ukraine on sunflower oil supply is the right one.

It is right for Iceland’s customers, many of whom are on very tight budgets, even though the switch back to the controversial ingredient will disappoint environmentalists.

Iceland was the most prominent campaigner against the use of palm oil, pledging to remove it from own-label products in 2018. The grocer even ran a TV ad with Greenpeace, so this week’s about-turn has generated howls of outrage from some eco-warriors.

They are wrong. It’s not as if Iceland has abandoned its principles. Managing director Richard Walker has been entirely transparent about the decision – he was the one after all who made it public.

And he has been clear in his determination that the re-adoption of palm oil in some own-brand products will be a temporary measure.

Such clarity and commitment may not convince the sceptics, who like to sit in judgment from the comfort of their sofas and don’t carry the burden of obligation to some of the least well-off in society.

Iceland store London

Iceland has a reputation for offering value

This week a surge in the use of food banks has been reported, as consumers struggle with the rising cost of living. Food bank charity FareShare said it does not have enough food to meet the level of demand. 

When so many consumers face such difficulty, on what basis was Iceland – which has a reputation for value – supposed to pass on the costs of the disruption of sunflower oil supply following the outbreak of war in Ukraine?

As Walker put it: “The only alternative to using palm oil under the current circumstances would simply be to clear our freezers and shelves of a wide range of staples including frozen chips and other potato products.”

“An unsuccessful business is in no position either to act decisively to reduce its own environmental impact, or to help shape customer behaviour”

Any retailer would put its customers first. And the commercial success that comes from doing that is essential if they are then to make a difference on sustainability. An unsuccessful business is in no position either to act decisively to reduce its own environmental impact, or to help shape customer behaviour and government policy on sustainability.

As Walker said: “This is a serious emergency and one that requires tough choices and compromises if we are to achieve our prime objective of continuing to feed the nation.”

The palm oil decision is a setback, but it has not brought Iceland’s sustainability ambitions to a full stop.

Retail Week Live 2022

Retail Week Live 2022

Iceland’s Richard Walker is among the first 70 speakers to be announced for this year’s Retail Week Live.

The event is a global retail festival that connects, inspires and challenges the retail ecosystem to create efficient and purposeful businesses to succeed in an ever-changing world. 

The strapline for this year’s event is ‘Time for Radical Change’, with an agenda split across two days to focus on the themes of digital transformation and innovation, and people and the planet. 

Our speakers are pioneers of their industry, handpicked for their track records in leading change, anticipating new trends and harnessing innovation. They represent a fierce group of leaders who aren’t afraid to take back a measure of control – and provide a sense of hope. But more than that, they will give you the tools to deliver radical change. 

As well as world-class content, Retail Week Live also boasts a whole host of unforgettable experiences ranging from wellness and pampering through to live entertainment, all designed to spark connections. 

To find out more about Retail Week Live 2022 and secure your place at this year’s event, click here.