SPA FUTURE THINKING UNVEILS THE IMPORTANCE OF CONSUMERS UNDERSTANDING OF ORGANICS AND FAIRTRADE
With trust in media at an all time low do consumers and shoppers trust and understand the retail offering when it comes to buying into a more ethical approach to the way they shop for food and drink products?
Over recent decades consumers have been targeted with Organics, Fairtrade and local as well as having seen brands highlighting their carbon footprint as ethical approaches to leading a greener, healthier lifestyle.
Despite the economic downturn Fairtrade has retained its popularity with Datamonitor predicting that by 2014 Fairtrade foods spend will have almost doubled to £525m.
Whilst only 14% buy Fairtrade regularly a 47% of consumers will buy ‘occasionally’.
Conversely sales for Organic products have fallen 5.9% according to the Soil Association with sales down to £1.73bn.
However, the Organic Market Report 2011 shows that 86% of households regularly buy organic, with over £33m being spent on Organics each week.
Another positive is that sales of organic veg boxes increased by 1% in 2010 and supermarkets including Waitrose expect increases in organic sales for 2011.
The strength of brand identity of the Fairtrade brand with a single message and clear communication as well as strong supermarket buy in have almost certainly aided the cause for Fairtrade.
These factors have led to clear consumer understanding and as a result strong levels of buy in from shoppers.
Fairtrade products have also benefitted from a comparative price to non-Fairtrade items aided by retailer buy-in where companies such as Sainsbury’s have focussed on providing Fairtrade ranges at no additional cost.
The difficulty for Organics compared to Fairtrade can potentially be pinpointed on two key areas; consumer understanding and price.
The brand has a less clear identity and needs to appeal across a wide number of criteria including environment and animal welfare through to taste and overall health.
Communicating this clearly has been a much more difficult proposition than Fairtrade and without a clear proposition; trust in the offering has been less strong.
For example, the health benefits of Organics are still not clearly defined or proven and this combined with a price premium may well have contributed to its struggles.
Price will continue to play an important role for both Fairtrade and Organics in the longer term. Whilst dairy and cereal prices are all 20-50% above where they were last year the UN estimates that cereal prices will 20% higher and meat prices 50% higher, over the next decade.
However the long term success for both Fairtrade and Organics relies on continued education, maximising awareness and accessibility combined with buy in from manufacturers and retailers to maintain and strengthen trust and understanding.
SPA Future Thinking work with over 30 of the Top 50 FMCG companies in the world.
Their recommendations help them generate more successful product launches and can increase new product’s sustainability in the market by as much as 50%.
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