Retailers on board the ethical foods drive

By Louise Prance

- Last updated on GMT

Related tags: Ethics, Food, Business ethics, Euromonitor

As organic and fair-trade products profits boom, retailers are
reaping the benefits of consumers leading a more 'ethical'
existence, according to a new report, but manufacturers may be
reacting to slowly.

Organic packaged foods stood at $7.8bn in Western Europe in 2006, with organic packaged foods in Eastern Europe reaching $117.9mn, according to Euromonitor. A new report from Euromonitor; The World Market for Retailing,​ highlights how the mass media has played a hand in heightening consumer awareness for ethical living. It says that the media has increased consumer's exposure to environmental and ethical issues. This in turn has led to a change in consumer behaviour, which is benefiting food retailers with fair-trade food products flying off the shelves. "This change in consumer behaviour is underpinned by rising disposable income and the guilt that consumers feel at the affluence of Western countries in relation to less developed countries,"​ said Magdalena Kondej, retail industry analyst from Euromonitor. However, despite retailers reaping the benefits from the stead-fast consumer trend, food and drink manufacturers slow to react to the changing industry could risk losing out to competition in the market. According to a recent Deloitte & Touche study the consumer activism trend, alongside global warming and increased regulation, has put increased cost pressures on the industry. The analysts noted that the manufacturers have to work hard to keep up with all fast-moving changes that affect them. "While today traceability, removal of hazardous substances, animal welfare and the vexed question of nutritional laabelling and health warnings dominate the regulatory agenda, tomorrow it could additionally be carbon emissions and carbon labelling businesses are responding to,"​ they said. Food industry players said that the consumer trend for healthy products has the biggest affect on business today, with 94 per cent of large companies and 61 per cent of small businesses choosing this category as their number one concern, according to the report. As for consumers, Euromonitor says they are more aware of global ethical issues, consumers are said to be thinking and acting more ethically. Feeling increasingly isolated by the political system, they are seeking ways in which to put this into practice. "They are increasingly looking for ways to give their lives more political and ethical meaning, which has also affected day-to-day activities, including shopping",​ continued Kondej. Retailers are being urged to embrace the trend, as it looks set to stay put. Despite their being outbreaks of ethical consumption in the past, the current trend seems to be more firmly established and inclusive than before - putting pressure on retailers, and indeed, food manufacturers to assess the ethical implications of their entire product offerings in the future.

Related topics: Market Trends

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