Retailers and branded manufacturers have been developing their ranges, expanding their activities and communicating about their work as social sustainability becomes a new competitive frontier.
 

Ethical sourcing

Despite the tough economic conditions at home, British shoppers are showing increasing concern over the welfare of people producing their food and groceries in developing countries.

British shoppers are showing increasing concern over the welfare of people producing their food

More than half (52%) of shoppers feel that the pay and conditions of people producing their groceries in poorer countries is an important consideration. Their biggest social concern is over child or forced labour, with more than eight out of ten believing that food and grocery companies should be held either ‘completely’ or ‘very’ responsible for ensuring that no child or forced labour is used in the production of goods.
 

Social sustainability – retailers and branded manufacturers

Social sustainability might be a recently coined phrase, but it is certainly not a new phenomenon. The foundations of IGD itself, one hundred years ago, were firmly rooted in the somewhat altruistic motivations of a number of grocers and food producers at the time. And many famous brand names have a long heritage in social campaigning.

More recently, global communication channels have continued to open the world to consumers – through 24-hour news channels, websites, documentaries, and social networking sites.

According to the Fairtrade Foundation, UK Fairtrade sales grew by 43% to £712.6m in 2008 and continue to grow in 2009.

Today, more than ever, shoppers in the UK have high expectations of those in a position to make a difference. They are looking for more than just good quality food and low prices. They expect the companies that furnish them with their daily meals to act responsibly on a global level – and they expect them to do the right thing.
 

Shoppers fall for Fairtrade

Fairtrade has been a particular beneficiary of both the focus of industry on social sustainability, and the attention of shoppers on the plight of workers in the developing world. Nearly three-fifths (59%) of shoppers claim to be active supporters of Fairtrade, buying products at least occasionally, and nearly one in ten (9%) claim specifically to choose stores with a wide range of Fairtrade products and always buy Fairtrade when possible.

Examples of ethical sourcing initiatives by grocery retailers     • Sainsbury's is the largest UK retailer of Fairtrade products, selling only Fairtrade bananas and sugar. Its on track for 100% of its private label tea, and roast and ground coffee to be Fairtrade by 2010.   • The Co-operative stocks around 180 Fairtrade products and has promoted its ethical credentials through a major TV advertising campaign (Blowin' in the wind)   • Tesco is the world's second biggest retailer of Fairtrade cotton at five million items   • Wal-Mart is developing a global sustainable product index   • Morrisons was the first major retailer to work with Fair Working Conditions and increased sales in Fairtrade by 27% in 2008

Manufacturers are also demonstrating their commitment to social responsibility. For example Unilever committed to buying Rainforest Alliance certified tea in 2007 and Cadbury Dairy Milk launched its new Fairtrade-certified chocolate bars in July, becoming the first mass market chocolate to gain certification from the Fairtrade Foundation.
 

Three key dimensions

The results of our survey certainly suggest that any company – retailer or manufacturer – that confines its sustainability programme purely to the environment is in danger of falling behind. Leaders in the field are balancing the three dimensions of sustainability: economic, environmental, and social.

The resilience of ethical shopping, even throughout a recession, sends out a strong message. Ethical sourcing is growing increasingly important for shoppers. That’s why it’s fast becoming a new competitive frontier for food retailers and brand owners.
 

More information:

	Social Sustainability – The New Competitive Frontier
	Our latest consumer research provides a benchmark for any company interested in its social reputation or planning a social sustainability initiative, covering areas including sourcing policy, fair trade, pay & working conditions, child labour, trade union policy and urban regeneration.

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Tim Maton is a Senior Consumer Analyst with IGD, with a wealth of experience in providing shopper insight to a broad range of retailers and manufacturers, including many leading players in the food and grocery sector.

Tim's most recently authored IGD reports include Social Sustainability – The New Competitive Frontier, Private Label vs. Brands - The Shopper Perspective and The Future of Discounters - The Shopper Perspective.