John Bryant, CEO of snack food giant Kellogg's, found himself in hot water last week on a quarterly earnings call when one investor took the company to task for its part in destroying vital Indonesian peatlands that store vast amounts of climate-polluting carbon, and rainforests home to the last 400 remaining wild Sumatran tigers in the world.
Tony the Tiger is probably pretty embarrassed at the moment.
At issue is a recent partnership struck between Kellogg's and an Indonesian company called Wilmar, who is the largest supplier of palm oil in the world. Wilmar is rated the least sustainable publicly traded company in the world by Newsweek, lagging behind companies like Monsanto, Coal India, Dow Chemical and ExxonMobil.
In order to plant the palm trees that produce the palm oil, Wilmar destroys thousands of hectares of virgin Indonesian rainforest and peatlands every year. The last remaining 400 Sumatran tigers call these rainforests home and the peatlands are very important when it comes to climate change, as they store more carbon than the world emits in 9 years.
Kellogg's recently struck a partnership with Wilmar to buy their palm oil to use in the cheap snack foods it sells.
It's mass rainforest destruction in the name of Pringles.
Corporate watchdogs and their hundreds-of-thousands of members are rightly ticked about the connection between Kellogg's and Wilmar and are ratcheting up the pressure.
On the investors call where the Wilmar partnership was brought up, Kellogg's CEO John Bryant brushed off the criticism saying that, “It's something that the activists should really take up with Wilmar to determine the best path forward with them.”
When Bloomberg News asked Wilmar for comment, a company spokesperson had this to say:
“Wilmar is committed to developing and cultivating its plantations in a responsible and sustainable manner that looks into safeguarding the intrinsic value of the ecosystem, including endangered fauna like the orangutans and Sumatran tigers.”
So Kellogg's says it is not their problem, even though they are creating a market for rainforest destruction to make snack food, while Wilmar says they do care, despite the (dis)honor of being the least sustainable company in the entire world.
This is classic PR spin. But spin only works for a short time, and eventually the image your company ends up with is the one closest to reality, and ultimately the one it deserves. If Kellogg's wants to remain a popular and well-liked brand, it is going to have to stop spinning and either demand Wilmar change its ways posthaste, or cut ties with the palm oil-giant altogether.