Ethical Consumers and Corporate Responsibility: The Market and Trends for Ethical Products in Food and Beverage, Personal Care and Household Items

Table of Contents

Chapter 1: Executive Overview

• Scope & Methodology
  • Scope of Report: Focus on Three Grocery Product Areas
  • Report Methodology
• Market Overview
  • Key Ethical Issues
  • Organic
  • No Genetic Modification or Cloned Animals
  • Fair Trade
  • Locally Grown
  • Sustainable Agriculture
  • Humane Treatment of Animals
  • No Animal Testing/Cruelty-Free
  • "Green"-Eco-Friendly-Non-Toxic
  • Biodegradable, Recyclable, Reusable, and Minimal Packaging
  • Criteria and Certification
  • Consumers Union Lists 147 Different "Eco-Labels"
  • Ethical Product Sales Top $32.8 Billion in 2006
  • Table 1-1: U.S. Retail Sales of Ethical Products, 2002-2006 (in billions of dollars)
  • Foods and Beverages Account for 82% of Retail Sales
  • Figure 1-1: Share of U.S. Retail Sales of Ethical Products by Product Group, 2006 (percent)
  • Natural Foods Channel Generates Nearly Half of Retail Sales
  • Figure 1-2: Share of U.S. Retail Sales of Ethical Products by Retail Channel, 2006 (percent)
• Market Outlook
  • Ethical Consumerism: A Mindset and A Lifestyle
  • Green Goes Mainstream as Conscientious Consumerism Rises
  • Media Spreads a Global Green Culture
  • Americans Shift From Ego to Eco
  • Globalized "Consumer Class"
  • Who Are the Eco-Friendly Consumers?
  • Gap Between Opinions and Buying Behavior
  • Voting at the Checkout
  • Consumer Boycotts
  • Major Corporations Get More Involved
  • Retailers Are Pressuring Suppliers' Ethics
  • The Profit Motive
  • Controversy Over "Green" Ethics
  • Ethical Issues Sometimes Conflict
  • Retail Sales Will Approach $57.3 Billion in 2011
  • Table 1-2: Projected U.S. Retail Sales of Ethical Products, 2006-2011 (in billions of dollars)
• Competitive Trends
  • Mainstream Moves to Incorporate Ethical Products
  • Selling, or Selling Out?
• Marketing and New Product Trends
  • Third-Party Certification Adds Credibility, Luxury Cachet
  • Alternative Marketing
  • "Natural," "Organic" Lead New Products Claims
  • Figure 1-3: Top 10 Ethical Claims on New Products, 2001 vs. 2006
• Retail Trends
  • "Supernaturals" Set the Pace
  • At Least 25,000 Stores in Natural Foods Channel
  • Ethical Becoming an Essential Competitive Thrust for Supermarkets
  • Wal-Mart and Target Also Going Ethical
  • Specialty and Department Stores Strong in Personal Care
  • Farmers Markets and CSAs
  • Alternative Distribution Channels
  • Case Study: Wal-Mart Goes Sustainable
  • Success, Controversy, and Green Initiatives
  • Case Study: Whole Foods as "Whole-Mart"
  • Growth Strategy
  • Ethical Convictions and Corporate Responsibility
  • Yet, Even Whole Foods is Criticized on Ethics
  • Lower Expectations
• The Consumer
  • The Simmons Consumer Survey
  • Three Out of Four Consumers Believe Companies Should Act Ethically
  • 55% Recycle; 61% Think Product Packaging Should Be Recycled
  • Figure 1-4: High-Index Demographics of Consumers Who Agree That Packaging for Products Should Be Recycled, 2006 (U.S. adults)
  • Table 1-3: Demographic Overview for Consumers Who Agree It Is Important a Company Acts Ethically, 2006 (U.S. adults)
  • Table 1-4: Demographic Overview for Consumers Who Agree That Packaging for Products Should Be Recycled, 2006 (U.S. adults)
• Looking Ahead
  • Appealing to a Broader Consumer Base
  • Retail Competition, Expansion Will Continue to Drive Market
  • The Wal-Mart Effect
  • More Mergers and Acquisitions
  • Continued Cross-Over by Mainstream Marketers
  • Ethical vs. "Ethical, Inc."

Chapter 2: Food and Beverages

• Market Trends
  • Market Definition
  • Key Ethical Issues Affecting Food and Beverages
  • Organic
  • Definition of "Organic"
  • Many Organic Foods Support Other Social Issues
  • No Hormones
  • No Genetic Modification
  • Use of Genetically Modified Ingredients Widespread
  • Controversial Products Pulled from Market
  • Few Americans Understand GMO
  • Group Proposes Non-GMO Certification
  • No Meat or Milk from Cloned Animals
  • Is "Locally Grown" the Next "Organic"?
  • The "Food Miles" Concept
  • Whole Foods Goes Local...
  • ...As Does Wild Oats
  • Humane Treatment of Animals
  • Cage-Free Eggs
  • No Standards for Free-Range Label
  • Grass-Fed Beef
  • Certified Humane and Free-Farmed Labels
  • Whole Foods Bans Sale of Live Lobsters
  • Humane Society Seeks Foie Gras Production Ban; Banned in Chicago
  • Retailers Spearhead Animal Welfare Standards
  • Fair Trade Practices
  • TransFair Certifies Products Sold in USA
  • Sustainable Agriculture
  • Some Marketers Setting Their Own Sourcing Guidelines
  • Sustainable Seafood
  • The Organic Fish Debate
  • Sales of Organic Foods and Beverages Easiest to Track
  • Ethical Food and Beverage Sales Grow to $26.9 Billion
  • Table 2-1: U.S. Retail Sales of Ethical Foods and Beverages, 2002-2006 (in billions of dollars)
  • Produce and Dairy Are Largest Ethical Categories
  • Figure 2-1: Share of U.S. Retail Sales of Ethical Foods and Beverages by Product Category, 2006 (percent)
  • Natural Foods Channel Leads Retail Sales
  • Figure 2-2: Share of U.S. Retail Sales of Ethical Foods and Beverages by Retail Channel, 2006 (percent)
• Market Outlook
  • More Consumers Choose Ethical Shopping
  • Organic Foods and Beverages Growing in Popularity
  • Ethical Issues Serve as a Point of Differentiation
  • Mainstream Retailers, Marketers Offering Ethical Foods and Beverages
  • Fair Trade Bananas to Get a Big Push
  • Price a Deterrent, But Many Consumers Willing to Pay More
  • Growing Shortage of Organic Ingredients
  • "Authentic" vs. "Fabricated" (Mass-Produced) Products
  • Many Consumers Distrust "Big Business" to Produce Ethical Foods
  • Cheating on Fair Trade?
  • Will Organic Growth Fizzle Out?
  • Food Contamination Scares Affect Industry
  • Ethical Foods and Beverages Market to Near $47.0 Billion in 2011
  • Table 2-2: Projected U.S. Retail Sales of Ethical Foods and Beverages, 2006-2011 (in billions of dollars)
• Competitive Trends
  • Ethical Food and Beverage Marketers
  • Global Marketers, Investors Control Many Top Brands of Ethical Foods and Beverages
  • Recent Mergers and Acquisitions
  • Is Smaller Better?
  • Starbucks, Stonyfield Farm, and Ben & Jerry' s Are Largest Mass-Market Ethical Brands
  • Table 2-3: IRI-Tracked Sales of Selected Ethical Foods and Beverages, 2005 vs. 2006 (in millions of dollars)
  • Table 2-4: IRI-Tracked Sales of Selected Ethical Foods and Beverages, 2001-2005 (in millions of dollars)
• Marketing and New Product Trends
  • Mainstream Marketers Seek More Participation and Visibility
  • A Switch to Biodegradable and Recycled/Recyclable Packaging
  • "Natural" and "Organic" the Most Popular Product Tags
  • Figure 2-3: Top Five New Ethical Food and Beverage Product Claims, 2001 vs. 2006
  • Table 2-5: Ethical Foods and Beverages: Selling Points by Package Tags, 2001-2006
• The Consumer
  • The Simmons Consumer Survey
  • Higher Levels of Education Characterize Consumers
  • Figure 2-4: Selected High-Index Demographics of Consumers Who Look for Organic/Natural Food, 2006 (U.S. adults)
  • Asian-Americans Skew High
  • Older Shoppers, Small Households Also Indicated
  • Table 2-6: Demographic Overview for Consumers Who Look for Organic/Natural Food (Any Agree), 2006 (U.S. adults)
  • Table 2-7: Demographic Overview for Consumers Who Look for Organic/Natural Food (Agree a Lot), 2006 (U.S. adults)
  • Table 2-8: Demographic Overview for Patrons of Whole Foods Market or Trader Joe' s, 2006 (U.S. adults)
• Case Studies
  • Ben & Jerry' s Homemade: From Hippies to Alternative Corporate Culture
  • Green Mountain Coffee Roasters: Tops in Business Ethics
  • Horizon Organic Dairy: Under Fire
  • Cornucopia Institute Files Complaints
  • Natural Selection Foods: "Industrial" Organic Produce
  • Newman' s Own: All Profits Go to Charity
  • Niman Ranch: Pioneer in Naturally Raised Meat Helps Small Farmers
  • Organic Valley Family of Farms: A Farmers' Co-Op
  • Starbucks: A Pioneer in Corporate Responsibility
  • Stonyfield Farm: Guerilla Marketing

Chapter 3: Personal Care Products

• Market Trends
  • Market Definition
  • Key Ethical Issues Affecting Personal Care Products
  • Natural, Organic, or Synthetic
  • Commonly Used Ingredients
  • Cruelty Free-Not Tested on Animals
  • Biodegradable, Recycled, and/or Recyclable
  • Ethical Personal Care Sales Top $5.2 Billion
  • Table 3-1: U.S. Retail Sales of Ethical Personal Care Products, 2002-2006 (in billions of dollars)
  • HBC Dominates Personal Care Product Categories
  • Figure 3-1: Share of U.S. Retail Sales of Ethical Personal Care Products by Product Category, 2006 (percent)
  • Natural Foods Channel Accounts for Two-Thirds of Sales
  • Figure 3-2: Share of U.S. Retail Sales of Ethical Personal Care Products by Retail Channel, 2006 (percent)
• Market Outlook
  • Ethical HBC Brands Still Mostly Niche, But Growing Fast
  • Retail Space a Challenge
  • Crossing Over
  • Premium Price Tags Buoying Sales Increases
  • Product and Packaging Efficacy Must Improve
  • Personal Paper Goods Expected to Stay Small
  • Ethical Personal Care to Reach $8.8 Billion by 2011
  • Table 3-2: Projected U.S. Retail Sales of Ethical Personal Care Products, 2006-2011 (in billions of dollars)
• Competitive Trends
  • Hundreds of Marketers, Only a Few Dozen Majors
  • Recent Mergers and Acquisitions
  • Aveda and The Body Shop Lead the Pack
  • Levlad, Hain the Strongest HBC Players in Natural Foods Channel
  • Mass-Market Sales Gain 29% in 2006
  • Tom' s of Maine, Burt' s Bees Lead in Mass
  • Table 3-3: IRI-Tracked Sales of Selected Ethical Personal Care Products, 2005 vs. 2006 (in millions of dollars)
  • Table 3-4: IRI-Tracked Sales of Selected Ethical Personal Care Products, 2001-2005 (in millions of dollars)
• Marketing and New Product Trends
  • Personal Care Marketers Still Building Assortment
  • New Product Package Claims
  • Figure 3-3: Top Five New Ethical Personal Care Product Claims, 2001 vs. 2006
  • Table 3-5: Ethical Personal Care Products: Selling Points by Package Tags, 2001-2006
  • Mineral Makeup a Hot Trend
  • Major Lines Expanding
  • Without, Minus, and Free Of
  • More Than Just Basics
  • More Natural
  • Personal Paper Products
• The Consumer
  • The Simmons Consumer Survey
  • 30% of Women Don' t Buy Cosmetics Tested on Animals
  • Figure 3-4: Selected High Indexes for Consumers Who Never Buy Cosmetics Tested on Animals (Any Agree), 2006 (U.S. adults)
  • Table 3-6: Demographic Overview for Consumers Who Never Buy Cosmetics Tested on Animals (Any Agree), 2006 (U.S. adults)
  • Table 3-7: Demographic Overview for Consumers Who Never Buy Cosmetics Tested on Animals (Agree a Lot), 2006 (U.S. adults)
• Case Studies
  • Aveda: Its Own Retailer
  • The Body Shop: Snatched Up by L' Oréal
  • The Hain Celestial Group: Jason and Zia Join the Empire
  • Kiss My Face: Irreverently Organic
  • Tom' s of Maine: Colgate Buys Majority Interest

Chapter 4: Household Products

• Market Trends
  • Market Definition: Household Products
  • "Green" or Eco-Friendly Household Products Share Many Similar Attributes
  • No Phosphates
  • No Chlorine Bleach
  • No Regulated Standards for Most Household Products
  • Ethical Household Product Sales Rise to $680 Million
  • Table 4-1: U.S. Retail Sales of Ethical Household Products, 2002-2006 (in millions of dollars)
  • Household Cleaners Is Larger Household Products Category
  • Figure 4-1: Share of U.S. Retail Sales of Ethical Household Products by Product Category, 2006 (percent)
  • Eco-Friendly Cleaners a $327 Million Business in 2005
  • Natural Foods Channel Accounts for Half of Retail Sales
  • Figure 4-2: Share of U.S. Retail Sales of Ethical Household Products by Retail Channel, 2006 (percent)
• Market Outlook
  • Consumer Awareness, Availability of Ethical Alternatives Building
  • Where Are the Mainstream Marketers?
  • Product Performance Key
  • Greenpeace Targets Kimberly-Clark
  • Fierce Competition for Mass-Market Shelf Space
  • Supply Chain Vulnerabilities
  • Retail Sales Will Approach $1.5 Billion by 2011
  • Table 4-2: Projected U.S. Retail Sales of Ethical Household Products, 2006-2011 (in millions of dollars)
• Competitive Trends
  • Ethical Household Product Marketers
  • Most Companies Small and Privately Held
  • Planet Acquires Green Forest
  • Paper Goods Dominate Mass-Market Sales
  • Figure 4-3: IRI-Tracked Sales of Ethical Paper Goods and Household Cleaning Products, 2001-2006 (in millions of dollars)
  • Marcal Controls 93% of Mass-Market Ethical Paper Goods
  • Mass-Market Household Cleaners Growing Rapidly
  • Table 4-3: IRI-Tracked Sales of Selected Ethical Household Products, 2005 vs. 2006 (in millions of dollars)
  • Table 4-4: IRI-Tracked Sales of Selected Ethical Household Products, 2001-2005 (in millions of dollars)
  • Table 4-5: Top Brands of Selected Ethical Household Products by 1-Year Growth, 2006 (in millions of dollars)
• Marketing and New Product Trends
  • New Product Package Claims
  • Figure 4-4: Top Five Product Claims on New Ethical Household Products, 2001 vs. 2006
  • Table 4-6: Ethical Household Products: Selling Points by Package Tags, 2001-2006
  • "Green" Household Products Positioned on the Basis of Health Benefits
  • New and Improved
  • Ethical Cleaning Products Making Scents
  • Biodegradable and Compostable Plates, Cups, and Utensils
• The Consumer
  • The Simmons Consumer Survey
  • Higher Education Characterizes Consumers
  • Figure 4-5: Selected High Indexes for Consumers Who Buy Products That Use Recycled Paper (Any Agree), 2006 (U.S. adults)
  • Older Shoppers, One-Person Households, Women Also Indicated
  • Asian Americans and Hispanics Prime Targets
  • Table 4-7: Demographic Overview for Consumers Who Buy Products That Use Recycled Paper (Any Agree), 2006 (U.S. adults)
  • Table 4-8: Demographic Overview for Consumers Who Buy Products That Use Recycled Paper (Agree a Lot), 2006 (U.S. adults)
• Case Studies
  • Marcal Paper Mills: Recycled Paper Products = Profits
  • Method Products: It' s Hip to Be Eco-Friendly
  • Planet: Relaunches Green Forest Paper Products
  • Seventh Generation: A Phoenix Rising

Chapter 5: International Trends

• Ethical Consumerism Mostly in Developed Nations
• Different Ethical Issues Important in Different Countries
• Are Consumers in Developing Nations Most Willing to Pay More for Ethical Products?
• Boycotts Popular Worldwide
• Organic Standards Differ
• Canada Close to Enacting National Organic Standards
• EU Proposes Animal Welfare Labeling
• Focus on Ethical Consumerism in the U.K.
• 52% of British Consumers Classify Themselves as Ethical
• Fair Trade Particularly Well-Established
• Look Behind the Label
• British Media Play Up the Green Lifestyle
• Conviction or Tokenism?
• Case Study: Grupo Eroski (Spain)
• Case Study: Migros (Switzerland)

Appendix: Addresses of Selected Marketers