Indonesia: Consumers ready for sustainable palm oil

Hans Nicholas Jong, The Jakarta Post 7 Nov 15;

Almost 8 million consumers, over a quarter of the Indonesian market, are willing to switch to sustainable palm oil products as long as they are properly informed and the products are widely available in the market, a recent study has found.

The study, the first to analyze the perception of Indonesian consumers regarding sustainable palm oil products, found that 27 percent of its 800 respondents would use sustainable palm oil products and were willing to pay extra for them.

The Roundtable on Sustainable Palm Oil (RSPO), in collaboration with Daemeter Consulting, conducted the survey between May and October this year in five major cities: Jakarta, Bandung, Surabaya, Medan and Palembang.

Of the 7.9 million consumers who they would use such products, 2.9 million were willing to support the cause by initiating and taking part in campaigns.

“From this highly committed group of people, more than 60 percent said that they were willing to buy sustainable palm oil products that were much more expensive [than regular ones],” Daemeter Consulting sustainability communications manager Leony Aurora said.

The rest said they were willing to buy only sustainable palm oil products.

Apart from the 7.9 million potential consumers, at least 13 million more consumers could be encouraged to switch to sustainable palm oil products, the report said.

“These people are referred to as ‘followers’ [...] Maybe we need a big-name celebrity to campaign for the cause. Most people in this group don’t want to pay extra [for sustainable palm oil products],” said Leony.

While the report acknowledges that there is a huge market and potential demand for sustainable palm oil in the country, a myriad of challenges remain ahead, including the fact that most customers do not have enough understanding of the concept of sustainability as well as the impact of unsustainable oil palm plantations.

“When we asked the respondents about the impact of palm oil, 37 percent said it had a positive impact while another 37 percent said there was no impact whatsoever. This is shocking because there is a disconnect between what the media is reporting [the negative impact of oil palm plantations] and consumers,” Leony said.

Of those who said that oil palm plantations had a positive impact, 31 percent said the plantations were beneficial to the environment.

“They believe they will reduce pollution and increase greenery. So they think planting [an oil palm] tree equals green equals good. Maybe the government’s program on planting trees is too successful so that the public thinks whatever trees are being planted is good [for the environment],” said Leony. “They’re overestimating the environmental benefit produced by monoculture plantations.”

On the other hand, only 4 percent believed that oil palm plantations had a negative impact, with 78 percent of them saying that they were destructive of the environment.

“The number who said palm oil plantations had a [negative] social impact was very small, only 7 percent. So media reporting on indigenous peoples has failed to resonate with the public,” said Leony.

RSPO global outreach and engagement director Stefano Savi said the palm oil industry in Indonesia should learn from the study.

“This is a great advantage, this means we can communicate the issue of sustainability without having the risk of emphasizing the negative aspects. So what are we waiting for? Let’s educate consumers,” he said.

World Wide Fund for Nature (WWF) Indonesia Market Transformation Initiative deputy leader Irwan Gunawan said palm oil firms should start a revolution in the industry by introducing more sustainable products into the market, instead of waiting for consumers to demand them.

“It’s always a question of chicken and egg. But for me, it’s the chicken [palm oil firms] who should first lay the eggs [sustainable palm oil products]. This is capital investment. In the first five years, you might bleed money, but after that you will reap the benefits,” he said.

— JP/Hans Nicholas Jong