The Next Step In The Ethical Consumerism Revolution

Table of Contents

• DATAMONITOR VIEW
  • CATALYST
  • SUMMARY
• ANALYSIS
  • INTRODUCTION: There are different levels and consequences of ethical consumption
    • Business leaders want to take action but are unsure how to best succeed
    • Ethical consumerism is becoming more sophisticated
  • TREND: Ethical and environmental concerns are escalating on a global scale
    • Concern over environmental and animal welfare issues are especially high among Europeans
    • US consumers have entered a more reflective and concerned phase of consumption
    • In the Asia-Pacific region more economically developed nations are most concerned about the environment
    • Take-outs and implications: ethical consciousness has entered the mainstream and must therefore prompt a strategic re-think as companies plan for the future
  • TREND: Consumers are increasingly acting on their ethical beliefs via product choices
    • Fair-trade sales are experiencing phenomenal growth
    • Beverages is the most important category in fair-trade, primarily due to extensive coffee and tea sales
    • Organic spending is growing, driven, in part, by ethical considerations
    • Consumers will boycott brands/products that they perceive as lacking environmental credentials
    • Consumers are also disposing of the products they buy in a more ethical manner
    • Take-outs and implications: ethical consciousness is directly impacting consumer goods sales
  • INSIGHT: Socio-demographics impact how shoppers view ethical issues
    • Take-outs and implications: manufacturers and marketers need to take socio-demographics into account but recognize a democratization of ethical consumerism overall
  • INSIGHT: There remains a ' disconnect' between consumers' ethical attitudes and actual buying behavior
    • Consumers desire accurate information and education about ethical / environmental issues
    • Price can be a factor for some consumers failing to adopt more ethical alternatives
    • Consumers demand more from a product than solely being ethical
    • Consumers are also questioning the broader integrity of the ethical movement
    • Strong ethical credentials are associated with enhanced consumer trust
    • Take-outs and implications: removing the major ' inhibitors' to ethical purchasing is needed to reap long-term rewards
  • INSIGHT: Environmental concerns are paramount to the ethical consumption trend
    • Ethical consumption is not a wholly altruistic act
    • Take-outs and implications: concerns about the environment are not entirely selfless
  • INSIGHT: Ethical consumerism is associated with self expressive consumers looking to position themselves in a specific manner
    • Take-outs and Implications: consumers use ethical consumption as a means of expression
  • INSIGHT: ' Going local' is a consumption trend with strong ties to ethics
    • Food miles are in the consumer consciousness, but the term is not without limitations
    • Consumers are responding to concepts of ' carbon footprints' and ' food prints'
    • Take-outs and implications: ' buying local' is a key element of the ethical movement
  • Conclusions
• ACTIONS
  • ACTION: Determine a clear plan of action to deal with increasing ethical expectations among shoppers
    • Research / monitor your company' s ethical performance effectively - if you don' t others will
  • ACTION: Endeavour to reduce the impact of your products on the environment
    • Source products and ingredients ethically where possible
    • Demonstrate a commitment to reduce your packaging footprint by reducing material waste
      • Use ' light-weighting' alternatives where applicable
    • Incorporate sustainability initiatives into all operations
      • ' Carbon offsetting' can contribute to your ethical profile
  • ACTION: Actively promote your ethical credentials ensuring honest and clear communication
    • Educate and inform consumers about your sustainability credentials
    • Show consumers that your CSR activities are not just PR
      • Use carbon offsetting in conjunction with other procedures and claims
    • Ensure that ethical claims can be substantiated
    • Get passionate activists onside or inside the company
    • Don' t be afraid to reflect the positive and ' cool' aspect of ethics
    • Make transparency and traceability core features of supply chain and marketing communications
      • Promote the story of the ethically produced product
    • Avoid making ethical considerations the key message of marketing communications, especially for new product promotion
  • ACTION: Attempt to bring ethical consumerism to mass market
    • Expand ethical product distribution into mass channels
    • Develop branded initiatives that enable consumers to more easily identify eco-friendly packages
    • Use in-store signage to educate and communicate about environmental credentials
    • Command price premiums where possible yet strive to bring prices down
• APPENDIX
  • Definitions
  • Methodology
  • References/ Further reading
  • Ask the analyst
  • Datamonitor consulting
  • Disclaimer
  • List of Tables
    • Table 1: Fair-trade overall product sales by country, 2002, 2007, 2012, ($m)
    • Table 2: Fair-trade sales by country and category, 2002, 2007, 2012 ($ millions)
    • Table 3: The percentage of new product launches in the US and Europe tagged as ' organic' , by product 2002-07
    • Table 4: Organic food market value ($ millions) by country, 2002, 2007, 2012
    • Table 5: Organic beverage market value ($ millions) by country, 2002, 2007, 2012
    • Table 6: Organic personal care market value ($ millions) by country, 2002, 2007, 2012
    • Table 7: Importance of fair-trade categories by gender, 2006
  • List of Figures
    • Figure 1: There are a number of drivers and inhibitors affecting ethical consumption
    • Figure 2: Ethical consumerism is becoming more sophisticated over time
    • Figure 3: Australia and Spain are predicted to have the strongest growth in fair-trade over the next five years
    • Figure 4: The US, Spain and Sweden offer the fastest growth potential in organic food sales
    • Figure 5: Higher education positively impacts ethical buying behavior
    • Figure 6: Over the past twenty years their has been a shift in European and US consumer concern toward environmental issues
    • Figure 7: Caring about the environment tops social justice concerns for US fair-trade consumers
    • Figure 8: Recent natural disasters have highlighted the impact of climate change in consumers' minds
    • Figure 9: Tesco has launched a new store with a 50% smaller carbon footprint than a conventional store
    • Figure 10: Educating consumers about ethical sustainability policies increases awareness and adds impact to the changes being made
    • Figure 11: Marketers can adapt farmers' market advantages for the mass market
    • Figure 12: Ethical considerations are secondary to a number of other important needs associated with food and drink consumption
    • Figure 13: In-store signage increases the visibility of sustainable products