Unilever to use geo-technology to tackle the ‘first mile’

By achieving full visibility of its palm oil supply chain, Unilever claims that it will be better equipped to tackle key environmental issues. Credit: KYTan / Shutterstock.

Unilever, one of the world’s largest buyers of palm oil, looks set to implement new geo-location technology to make its palm oil supply chains more transparent and sustainable as part of its initiative to make all its supply chains deforestation-free by 2023. Used across its ice cream, cosmetics and soap products, Unilever purchases over one million tonnes of palm oil related products a year; however, the company has long been afflicted with a ‘farm to table traceability’ problem that has affected the whole FMCG industry. The new technology created by Orbital will allow for Unilever to track supply chains and trace materials all the way back to the ‘first mile’, it is suggested that by looking at what is actually happening every day on the ground they will be able to recognise ‘which farms are linked to which mills, which mills are linked to which refineries, and which refineries are linked to which warehouses’.

By achieving full visibility of its palm oil supply chain, Unilever claims that it will be better equipped to tackle the key environmental issues of burning tropical rainforests, destruction of wildlife and land conflicts which have been fuelled by the growing demand for cheap and versatile edible oils. James Crawford, the founder of Orbital, suggests that the new strategy is consumer led and that companies are being pushed by their end customers to develop sustainable products.

In fact, as per GlobalData’s latest 2020 Covid-19 recovery consumer survey, published on 12 August, it was shown that a significant majority of consumers (76%) globally suggest that how ethical or environmentally friendly a product is influences their product choice. *1. Furthermore, it is notable that Covid-19 has not diminished consumers’ appetite for sustainable or ethical products with almost half (47%) even responding that since the Covid outbreak, ethical / sustainably sourced ingredients are now even more important to them*2.

Unilever’s new approach can be identified as a response to the growing consumer trend of trust and transparency; in an environment whereby consumers have become skeptical or even cynical regarding large corporate practices, the company is aiming to provide reassurances and transparency over the sourcing of its ingredients. Likewise, Unilever recognises the great environmental responsibility it has in ensuring that its supply chain is not contributing substantially to climate change and environmental destruction, that is why in 2010 it launched the Unilever Sustainable living plan (USLP). The USLP has meant that Unilever has made great strides in being more environmentally responsible, with key achievements including a 65% reduction in CO₂ emissions since 2008 and cutting waste impact per consumer by 32%.

As a globally recognised FMCG giant, Unilever has the ability to drive forward change and become the market leading example on sustainable and ethical products, and its willingness to trial and adopt new technologies may prove pivotal. Orbital claims that since developing the tracking technique for palm oil, they have been gaining interest from a range of industries including chocolate and furniture manufacturers who also want to understand where their goods are sourced from. Taking a step in the right direction, similar moves are likely to be welcomed with open arms by consumers and environmental groups alike.

GlobalData’s 2020 COVID-19 recovery consumer survey – week 5 (August 12) – global
*1 – combined “always influences my product choices”, “always influences my product choices”, “somewhat influences my product choices” responses
*2 – combined “top priority,” “significantly more than before,” “and slightly more than before” responses

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