Introduction
Awareness of the ethical issues affecting food, drinks and personal care has been growing over
the last decade, and this awareness is now having a real impact on food, drinks and personal care.
To target ethical consumers, manufacturers and retailers need to ensure that they respond to their
concerns by modifying their practices, updating products and effectively communicating any changes.
Scope of this report
- Current and forecast numbers of natural and organic consumers by country.
- Value of the key natural and organic food, drinks and personal care product markets by country.
- Detailed insights into the ethical issues that consumers are most influenced by in their
purchasing decisions and how they act on their convictions.
- Review of leading corporate social responsibility programs, labeling schemes and how these
effectively attract ethical consumers.
Research and analysis highlights
Dutch and French consumers are the most willing to pay a premium for ethical products, with 67%
and 60% respectively claiming that they would do so.
The number of loyal natural food, drinks and personal care users in Europe and the US is
predicted to increase from 89 million in 2004 to 173 million in 2009. In the US, the proportion of
loyal users will increase from 12% in 2004 to 24% by 2009, while the equivalent figures for Europe
are 14% and 25%.
Overall 67% of consumers in the US and Europe claim to have boycotted a food, drinks or personal
care companys goods on ethical grounds. According the Co-ops index, UK companies lost US$2.7bn of
sales through consumer boycotts in 2003.
Key reasons to read this report
- Access comprehensive data on the opportunity that the growth of natural and organic consumers
are creating.
- Understand how growing ethical concerns influence consumers purchasing behavior and how this
will evolve over the next five years.
- Learn how to successfully target ethical consumers by effectively communicating to them how you
are meeting their expectations.
CHAPTER 1 EXECUTIVE SUMMARY
Introduction
The future decoded
A growing number of consumers actively participate in ethical activities
People are also increasingly willing to pay a premium for ethical goods
Ethical concerns drive uptake of natural and organic products
Ethical consumerism goes beyond simply choosing more ethical brand
Ethical consumers are turning to alternative food distribution channels
Action points
CHAPTER 2 THE FUTURE DECODED
Introduction
Consumers are increasingly acting on their ethical beliefs
The proportion of consumers acting ethically is growing
American, Dutch and Swedish consumers are the most ethical
Spain, Italy and France show the strongest growth in ethical behavior
Consumers are increasingly likely to pay more for ethical goods
Varying preparedness to pay for ethical goods reveals cultural differences
More consumers are turning to natural and organic products
Definitions of natural and organic products
The number of consumers of natural products is rapidly growing
The proportion of loyal users is increasing
Definition of loyal and occasional users
The value of natural and fresh food and drink sales is rising
Natural and fresh food and drink is driven by the meat sector
Growth in organics will remain healthy
Consumers are turning to natural and ethical personal care
There are two definitions of natural personal care
Both natural and ethical personal care are growing
Natural personal care is a very rapidly growing sector
Ethical personal care benefits from the growth in naturals
Ethical issues matter most to food and drinks
Most consumers find ethics most relevant to food and drinks
The food and drinks industry is linked to a very wide range of ethical concerns
Fewer consumers attach importance to ethics in personal care
The problem of testing cosmetics on animals has mostly been eliminated
There are, however, growing environmental concerns relating to cosmetics
Many consumers wish to - and do - act on their convictions
Over two-thirds of consumers have boycotted a CPG company
Many consumers consider that their choice of product is a political act
Belief in non-traditional political action amongst consumers is growing
Environmental concerns have the most influence on consumers
Ethical consumers dislike excessive packaging
Environmental concerns are closely linked to food safety
European consumers continue to reject Genetically Modified (GM) products
Social concerns also feature highly in consumers priorities
Unfair international trade is a main concern of ethical consumers
Consumers are turning to alternative distribution channels
Case study: UK and US farmers markets
Farmers markets are mutually beneficial for producers and consumers
Consumers are partly driven by disillusionment with supermarkets
Farmers markets are also growing in popularity in the US
Time-poor ethical consumers often turn to deliveries
Organic delivery companies are expanding their offering
Delivery companies offer convenient ethical shopping but are expensive
Natural personal care consumers have different motivations
What consumers want from natural personal care
Credibility of natural personal care
Conclusions
Ethical concerns increasingly guide consumers choices
CPG players must not dismiss ethical consumerism as a fad
Regaining consumers trust is key
CHAPTER 3 ACTION POINTS
Introduction
Make the distinctive properties of natural products clear
Promote natural personal care products as being healthy
Use natural positioning to develop a unique proposition
Be clear about the ethical and natural properties of products
Make verifiable claims about natural products
There is no legal definition of what constitutes a natural product
A lack of clarity misleads consumers and destroys trust
Ensure that claims can be substantiated
Make sure your natural ingredients are ethically sourced
Case study: The Body Shop Community Trade program
Encourage retailers to develop a market feel
Consumers enjoy shopping in markets
Case study: Cocos Fresh Food Markets
Capitalize on latent demand
Use reliable labeling schemes to build trust
Avoid confusing consumers with a proliferation of labels: the French example
Labeling schemes should not just denote a minimum standard
Adopt effective yet honest communications strategies
CSR pays no dividends if consumers dont know about it
Show consumers that your CSR activities are not just PR
CSR initiatives aligned with consumers concerns can reap rewards
CSR creates goodwill amongst employees as well as consumers
Many employees are not aware that their company has a CSR program
Most senior executives believe that their CSR efforts are effective
People wish to work for ethically responsible companies
Engage in cross-industry ethical agreements
Case study: the Common Code for the Coffee Community
Coffee producers and workers are the immediate beneficiaries
Retailers have shown that ethical commitments pay dividends
The CCCC is not necessarily a permanent solution, but it is a first step
Help to educate consumers about food production
Rectify consumer misconceptions
An interest in production methods and health go hand in hand
CHAPTER 4 APPENDIX
Supplementary data
Definitions
Research methodology
Relevant links
How to contact experts in your industry
List of Tables
- Table 1: Consumer survey: "Please rate the extent to which you have bought more or less
ethical or socially-responsible goods and services in the past year."
- Table 2: Percentage and total number of natural (including organic) food and drink consumers by
usage status, Europe and US, 2004-2009
- Table 3: Value of natural (including organic) food and drink markets by key product markets,
Europe and US, 2004-2009
- Table 4: Value of organic food and drink markets by key product markets, Europe and US,
2004-2009
- Table 5: Naturals % share of overall personal care market, 1999-2009
- Table 6: Total value of natural personal care market, 1999-2009 (?bn and US$bn)
- Table 7: Ethical personal care market value, 2004-2009
- Table 8: Consumer survey: "for which type of product do you think that ethical
considerations are most important?" (% respondents)
- Table 9: Structure of the European organic food retail market, 2002
- Table 10: Motivators for the use of natural personal care products (% survey respondents citing)
- Table 11: Barriers to use of natural personal care products by non-users (% survey respondents
citing)
- Table 12: Percentage and total number of organic food and drink consumers by usage status,
Europe and US, 2004-2009
- Table 13: Consumer survey: "With regards to food and drinks, how aware are you of the
following issues and how much do they influence your purchasing behavior?"
- Table 30: Definitions used in this report
List of Figures
- Figure 1: Ethical consumer behavior by country, 2000-2005
- Figure 2: Willingness to pay more for ethical products by country, 2000-2005
- Figure 3: Defining natural personal care
- Figure 4: Consumer survey: "For which type of product do you think that ethical
considerations are most important?" (% respondents)
- Figure 5: Consumer survey: main reason for boycotting a food, drinks or personal care
manufacturers products
- Figure 6: Consumer survey: "With regard to food and drinks, how aware are you of the
following issues and how much do they influence your purchasing behavior?"
- Figure 7: Rates of household waste recycling by country, Europe, 2003
- Figure 8: French food certification schemes: consumers are often confused by what they actually
indicate
- Figure 9: The EUs food labels guarantee provenance and production methods but not quality
- Figure 10: Consumer survey: "Which of these ethical commitments would most improve your
disposition towards buying a particular companys food, drink or personal products?"