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Supply Chain
Without Ukrainian Sunflower Oil, Iceland Foods Forced to Put Practicality Over Sustainability

Thanks to the Russia-Ukraine conflict, the British grocery chain has been cut off from its supply of sunflower oil; the company says it must temporarily revert to using palm oil, which it eliminated from its products in 2018.

The global supply chain and economic disruptions that emerged during COVID-19 showed us that we can be nimble when necessary; but shifting global supply chains away from problematic players such as Russia — especially in times of crisis — is still impossible to achieve overnight.

The war in Ukraine has been sending shock waves felt in supply chains and industries around the world — including the auto and electronics industries; and unsurprisingly, food companies are also feeling the effects. In addition to being a key producer of computer chips, wheat, petroleum and wood, Ukraine is the world’s largest exporter of sunflower oil; combined with Russia, it accounts for 70 percent of global supply.

In a blog post this week, Iceland Foods' managing director Richard Walker described how the sudden unavailability of sunflower oil is forcing the company to find suitable alternatives and in some cases, break promises it had made regarding using palm oil — which it vocally eliminated from its own-brand products in 2018.

Walker explained that when Iceland distanced itself from palm oil from all its own-label products in 2018, to take a stand against tropical deforestation, it greatly increased the company’s reliance on sunflower oil. Now that that has suddenly become temporarily unobtainable, Walker says Iceland is working closely with its suppliers to find alternatives; but “in some recipes, the only viable substitute for sunflower oil — either because of its processing properties or taste issues — turns out to be … palm oil.

“I say this with huge regret, but 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,” he adds.

In the meantime, Iceland has agreed to use RSPO-certified sustainable palm oil (according to edie) in a limited range of its own-label products that will begin to appear in stores in June; those items will clearly show palm oil in the list of ingredients.

While the industry has made strides since Iceland stopped using palm oil, and individual brands such as Dr. Bronner’s have laid the groundwork for their own sustainable and ethical palm oil supply chains, Walker says he remains skeptical as to “whether there ever really can be any such thing as truly ‘sustainable palm oil’ available in the mass market” — and he insists Iceland’s return to the contentious oil is temporary, and the retailer will revert to using sunflower oil as soon as the supply situation stabilizes.

“In the meantime,” Walker says, “I can only ask our customers to bear with us as we attempt to deal with one of the unexpected consequences of the return of war to Europe, and to keep our stores stocked and the nation fed.”