Ethical Consumerism - Definition
Ethical consumerism may be loosely defined as the practice of purchasing products and services that actively seek to minimise social and/or environmental damage, and the avoidance of products deemed to have a negative impact on society or the environment.
Size of the ethical market
According to the Co-operative Bank, the market for ethical products and services includes the following segments:
- Ethical food and grocery products
- Ethical personal products
- Eco-travel and transport
- Ethical financial products
- ‘Green’ home improvements
- Community activities
Taking the above elements together, the UK’s ethical market was worth £29.3 billion in 2005, and is growing quickly, up 11% on the previous year (Source: ONS). Of the various elements above, and as shown in the graph below, ethical finance is by far the largest segment of the ethical market. However, in terms of growth, between 2004 – 2005 ethical food and grocery products have seen the largest increases, up 18.1%. (Source: The Co-operative Bank)
Amount of spending on ethical products and services in the UK, 1999-2005
(Source: The Co-operative Bank)
Ethical food and drink market
The Co-operative Bank has estimated that in 2005 the market for ethical food and drink was worth £5.4 billion. As shown in the table below, the definition of what is ‘ethical’ is a wide one, including not only foods considered to be ethical, but also the boycott of foods considered to be unethical.
Spending on ethical foods in the UK, 2004-2005
| Ethical Food |
Spend
(2004) |
Spend
(2005) |
% growth
(2004-2005) |
| Organic |
£1,213m |
£1,583m |
30.5% |
| Fairtrade |
£141m |
£195m |
38.3% |
| Free range eggs |
£215m |
£240m |
11.6% |
| Farmers' markets |
£195m |
£210m |
7.7% |
| Vegetarian products and meat alternatives |
£626m |
£638m |
1.9% |
| Freedom foods |
£13m |
£14m |
7.7% |
| Sustainable fish |
£11m |
£17m |
54.5% |
| Dolphin friendly tuna |
£215m |
£218m |
1.4% |
| Food boycotts |
£1,947m |
£2,291m |
17.7% |
| Total |
£4,576m |
£5,406m |
18.1% |
(Source: The Co-operative Bank)
Overall spending on ethical foods accounts for about 5% of the typical shopping basket, according to the Office for National Statistics.
In addition to increased spending on ethical foods there has also been a year on year increase in spending on personal products, for example humane cosmetics and ‘eco-fashion’ products (innovative products, including clothes made from recycled plastic bottles, are becoming more common place).
Consumer attitudes to Ethical Issues
Even though the overall spending on ethical foods is still relatively low, consumers are concerned about ethical issues. As shown in the graph below, when asked, a high percentage of the UK public say they consider ethical issues to be important. Top-of-mind is environment and recycling due no doubt to increased media coverage on these particular areas.
Importance of Ethical Issues: Comparisons Across Issues
Source: IGD Consumer Unit, 'Ethical Consumerism' 2006
As with any product or service, clear benefits help stimulate demand. In environmental terms this has been seen with the EU labelling scheme for white goods, with the sales of A-rated energy fridges now accounting for around 60% of the market. The increasing concern regarding environmental issues could also see increased labelling of products (see ‘Carbon Footprinting and Labelling’ factsheet).
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