Hansells Food Group has put out a cheaper, palm oil-free spread, which the company claims is the first in New Zealand.
Palm oil has been controversial because farmers are clearing rainforests in countries like Indonesia to plant palm oil crops and endangering the survival of orang-utans.
Hansells chief executive John McKay says it's a marketing opportunity, but people are demanding it.
He says New Zealanders consume about 19,000 tonnes of spreads every year and it's an everyday use item.
Mr McKay says Hansells is already exporting to Australia with this product and it will be looking to other markets as well.
He says there is a range of three products and it will be cheaper for consumers than it has been in the past, and also with the benefit of having no palm oil.
Mr McKay says Hansells still uses sustainable palm oil for some products, but it's actively testing alternatives.
For example, it's now using rice bran oil in its Aunt Betty range of steam puddings, which has further reduced its palm oil consumption by more than 80 tonnes.