Both are used by Fonterra as an ingredient in some products to enhance texture and to bond (emulsify) the ingredients, or to provide supplementary fats.
Sustainability is a priority for us, and this includes being careful about where we source our ingredients. We support the production of certified sustainable palm oil and Fonterra is a member of the Roundtable on Sustainable Palm Oil (RSPO).
In 2017, Fonterra procured 15,847MT of palm oil ingredients, all of which was from one of the following RSPO supply chain models:
7 per cent was from RSPO-certified segregated sources where sustainable palm oil from different certified sources is kept separate from non-certified palm oil throughout the supply chain
51 per cent was from ‘mass balance’ sources, where sustainable palm oil from certified sources is mixed with non-certified palm oil throughout the supply chain
42 per cent was from ‘book and claim’ sources, where the supply chain is not monitored but credits are purchased from RSPO-certified growers
As part of the commitments outlined in the Fonterra Palm Products Standard, we are working towards a goal of 100 per cent of our palm oil supply coming from RSPO-certified segregated supply by the end of 2018. We are facing challenges with supply chains in markets outside of Australia and New Zealand, and we are continuing to work with suppliers to achieve this target.
We expect to achieve the following for direct palm oil purchases:
1) 100 per cent Segregated supply by the end of 2018 for Australia and New Zealand (representing approximately 70 per cent of the total volume of palm oil procured by Fonterra)
2) 100 per cent Mass Balance supply for all regions by December 2019
3) 100 per cent Segregated supply for all regions by the December 2020
We will continue to work with suppliers during this time and will transition supply as soon as possible.
All Fonterra Brands New Zealand products fully comply with Australia, New Zealand and international food safety standards, and all Tip Top and Kāpiti ice creams and ice blocks are palm oil free.