Commodities from fair trade sources will play a key role in future growth for food manufacturers, with a new report finding the vast majority of British consumers are influenced by ethical issues when they buy food products. Genetically modified foods, meanwhile, are among the top five ethical concerns.
Market analysts Mintel report that the rising popularity of ethically produced food is reflected by a massive 75 per cent increase in spending on these foods over the past three years, rising from £1 billion (€1.48bn) in 2000 to some £1.75 billion in 2003.
"It is clear that an increasing number of consumers are thinking more about their relationship with the primary producers of the food they eat and about the conditions in which the food has been prepared," said Maria Elustondo, consumer goods analyst at Mintel.
Increasing the choice of ethical foods is a clear route for manufacturers to grow in the market by encouraging those trying to act ethically to spend more on these products than they currently do.
Over a third of respondents - 34 per cent - in the 1,000 adult Mintel survey are concerned about genetically modified foods, ranking third after the use of child labour - 48 per cent - and animal testing at 44 per cent.
The exploitation of developing countries, 31 per cent, and factory farming, 29 per cent, make up the remaining top five ethical issues that people feel strongly about today, says Mintel .
In 2003, Mintel valued the ethical foods market at £1.75 billion. Organically grown foods account for two thirds of this market but it is the Fairtrade mark and farmers' markets that have seen the most impressive growth.
Goods sold through the 450 farmers' markets in the UK were valued at £166million in 2002, an increase of 155 per cent since 2000. In 2002, some £63 million worth of Fairtrade Mark goods were sold, double the market size in 2000.
Estimated sales of Fairtrade mark goods are expected to hit £90 million in 2003, reflecting the rapid expansion of products available.
"Support for organic food and Fairtrade Mark food from the leading retailers has been a significant factor in stimulating the market," said the Mintel analyst. Ethical choices are now easier and more convenient for consumers to make which has encouraged even consumers who are not necessarily strongly committed to ethical buying to spendmoney on these products and services.
"A wider choice of products and more convenience-led products will help boost the market in the future," added Elustondo.
According to the report, environmental issues are more important than animal and even social issues.
"British consumers today worry more about environmental issues than any other. So, by buying free range eggs, for example, consumers feel they can make a difference on their doorstep," explained Maria Elustondo.
Marketers will take note that according to the report women are more concerned than men about animal issues with almost seven in ten (67 per cent) feeling strongly enough about these issues to stop them buying products and services. This compares to just two in every five (42 per cent) men.
"Overall women are more ethically minded than men as more than a third (35 per cent) of women can be called ethical consumers as they always or at least try as far as possible to buy or use ethical products or services. This compares to just one in five (21 per cent) men in the UK," adds the report.
Mintel warns that when it comes to food labelling, manufacturers need to remain crystal clear to avoid confusing the consumer.
"Ensuring clarity of communication from logos, consumer advertising and campaigns by lobby groups is of critical importance if momentum is to be maintained," say the market researchers.