Food challenge for 2006: satisfying the ethical consumer
companies that pay scant attention to this defining trend will lose
out.
Ruth Rosselson, a writer for the UK Ethical Consumer Research Association (ECRA), told FoodNavigator that factors such how companies sources their products, the impact they have on the environment and how they treat their workers are directly impacting how they spend their money.
"This ethical market is definitely growing," she said. "People are increasing asking where their products were made and how far they have come.
"Before 2000, organics was a niche market. Its not just about health anymore."
Consumer organisations such as ECRA have helped shape this burgeoning awareness. Its website, www.ethicalconsumer.org, was established in 1989 with the purpose of informing and empowering consumers in order to enable them to make ethical purchasing decisions.
It collates information from numerous sources and provides information on companies in table form, rather like an alternative Which? guide to ethical businesses.
"What we found was that while consumers were keen to take ethics into the shop, the information that would enable them to do that was simply not there," said ethicalconsumer.org writer Ruth Rosselson.
"Consumers also often found themselves bemused and bewildered by the amount of conflicting information out there."
The organisation aims to cover everything from the treatment of animals to the issue of air miles. It looks at what companies are doing to reduce their impact on the environment.
Consumer demand is already forcing through changes. Aversion to GM (genetically modified) food in Europe has already forced many food companies to label their products as being GM-free. The fair trade movement has also gained considerable momentum, with consumers increasingly prepared to pay more for guarantees of fair labour practices and sustainable sourcing.
Food companies have been quick to respond. Nestlé UK for example recently became the first of the four major coffee roasters to offer a fair trade product line, and international coffee roaster Douwe Egberts is set to follow Nestlé's lead by launching an ethical coffee brand in the UK.
"There has been a most definite knock-on effect," said Rosselson. "We now see multinationals such as Unilever join organisations such as the Ethical Tea Partnership, which aims to source tea more responsibly."
Growing consumer awareness has been the engine of this change. Ethically dubious business practices have tarnished many a multinational, and businesses such as Nestlé are increasingly determined to establish ethically sound business credentials. The food industry, it appears, has clearly seen the writing on the wall.
Along with Groupe Danone and Unilever, Nestlé is a founding member of the Sustainable Agriculture Initiative Platform, a 19-member strong food industry body that supports the development of agricultural practices that preserve current resources and enhance their efficiency. And coffee retail giant Starbucks has established schemes to pay farmers top dollar for their crop and forge long-term relationships with them.
Food companies of course are beginning to realise that tapping into ethical consumerism makes good business sense. Products marked 'natural' or 'organic' are flying off the shelves, with Fairtrade sales, alone, growing by more than 40 per cent a year in the UK alone. The UK Fair Trade Foundation says that over 1,000 certified fair trade products are now available in Britain, and that the market value reached £140m in 2004.
"Big multinationals are beginning to buy out organic businesses," said Rosselson. "Cadbury of course recently bought out Green & Blacks. Our opinion is that such actions are in direct response to consumer concerns."
This trend is likely to escalate further as consumers become better armed with information. "Free range eggs were a niche market when we started out, but are now mainstream," said Rosselson.
Food companies not tuned into current ethical demands will therefore increasing lose out as consumers become better informed and more discerning when it comes to ethical shopping. Issues such as sustainable sourcing, fair trade, humane treatment and genetic modification are clearly here to stay.
