Background to Ethical Foods
Ethical food products have grown exponentially due to the rising consumer interest in ethically sourced goods. This has occurred in a period of tough economic and market conditions, suggesting that ethical consumerism looks set to maintain its position within food and grocery retailing. This may also signal a fundamental change in the way a certain proportion of shoppers shop for food and grocery products.
- The Ethical Food Market, as defined by the Co-operative Bank’s ‘Ethical Consumerism 2005’ report, is growing at 7.5% year on year
- This is compared to a total grocery market growth rate of 4.2% year on year
In previous research, 85% of shoppers felt that the food industry had a responsibility to social, ethical and environmental issues so it is encouraging to see that 60% of shoppers thought food retailers were the best as responding to ethical issues, which has increased from 35% in 2004.
What is Ethical?
Shoppers have a broader definition of ethical consumerism that the traditional industry definition. Shoppers see ethics as defined by three broad areas:
What is Ethical? Shopper Definition
Source: IGD Consumer Unit, 'Ethical Consumerism'
- Consideration is about making a choice at the point of sale, based on the information that the shopper has at their disposal.
- Shoppers include both Fairtrade, defined by the Fairtrade Foundation, and fair trade in general, incorporating local and small businesses.
- Ethical shopping is also aspirational - it is perceived as expensive, and so if you can afford to do it, this to reinforces beliefs about personal success.
Attitudes to Ethical
Ethical shopping plays a differing role in the shoppers’ experience, based on their attitude towards ethics and their behaviour in general. IGD research classified shoppers into the following ethical typologies:
- Activists – 33% of shoppers claim to buy products that support their beliefs
- Showboaters – 4% of shoppers claim to buy ethical products because they think they should
- Lapsed Activists – 9% of shoppers claim that they think they should buy products that support their beliefs, but don’t
- Laissez Faire – 34% of shoppers claim to buy products that satisfy their needs, not those that support their beliefs
- Guerilla – 15% of shoppers claim not to buy products because they don’t support their beliefs
However, focus group research suggests that shoppers may over-state their propensity to purchase ethically. Many shoppers would like to do so, and therefore an opportunity does exist for this market, but the challenge is to translate attitude into action and further change purchasing behaviour.
Implications
The Ethical Category accounts for approx 3-4% of total grocery sales, but it is growing at twice the rate of the conventional market. The competitive retail environment means retailers are looking to certain ethical ranges to gain competitive advantage, and therefore may result in price competition.
Shoppers define ethical purchasing as ‘thinking about where your food has come from’. There may be an opportunity for local and British food to capture shoppers’ imagination through ethical purchasing messages.
Shoppers think as an ‘activist’ but behave like a ‘lapsed’, so the challenge is to translate attitude into action. This needs to occur outside of the retail environment as shopping is habitual, and choices are often made prior to store.
Purchase motivations fall into 3 main categories: quality, health and sustainability. It is important to understand different purchasing motivations and target marketing activity for each.
Price is cited as the main barrier but wider issues about education appear also to have significant impact. Educating consumers about the issue may help them to understand the price premium and be willing to pay extra.
