A report from shopper insight provider IRI has highlighted the growing importance of geocentric purchasing, with seven out of ten European shoppers identifying “strongly” with ethical purchasing practices and expressing a “clear preference” for buying locally sourced products.
The survey, which gauged the opinion of more than 3,000 European consumers across seven countries, including the UK, Italy, France and Germany, discovered ethical considerations have become closely linked with regional production.
“Consumers are increasingly aware of the fact that food grown closer to home means fewer carbon emissions, will be fresher and supports the local economy, and as a result we’re seeing local and national brands starting to win consumers’ hearts and minds,” Olly Abotorabi, Senior Regional Insights Manager at IRI, commented.
This is resulting in the emergence of a “vibrant and innovative local scene” in markets like the UK, Abotorabi continued.
“Challenger brands are emerging as winners, driven by huge amounts of creativity and a desire for authenticity and provenance. Increased uptake of free-from and vegan products and movements like plastic-free and zero food miles are often well embodied by smaller, challenger players.”
Millennials not most switched on to sustainability
Trend-spotters often suggest that younger consumers - millennials and gen z - are more in-tune with concerns around the environment and sustainability than older generations. Pointing to a higher number of those adopting meat-free or flexitarian approaches, for instance, it has been suggested that younger people are more engaged with environmental issues. This was not, however, supported by IRI’s findings.
The majority of shoppers included in the survey revealed that they want products made by manufacturers that are local and respect the environment. Just over 70% of millennials, those aged 18-34, said this was important in informing their product purchasing preferences. This rose to 73% of those aged over 35.
Just under 70% of millennial respondents also said packaging that was environmentally-friendly was important to them when buying food. Again, this figure was higher in older age groups, rising to 75%.
For millennials, innovation was identified as an important purchase driver – with 70% stating that innovation shaped buying decisions. The desire for innovation means that millennials associate more strongly with global brands that are viewed as offering exciting new products, IRI suggested. Innovation was less important for older people, with 65% of consumers over the age of 35 stating that this impacted their buying choices.
“Older generations prefer to purchase local products. Young Millennials are marginally less concerned about product origin and environment, and are more inclined to buy international brands which they perceive to be more innovative,” IRI concluded.
Price remains a barrier
IRI found that there is a reluctance to pay more for local and organic products among European consumers. Around half of all respondents said that they would not pay a price premium for ‘0’ kilometre or organic food.
This unwillingness to pay a higher price was more marked among millennial and young millennial consumers, IRI concluded. Of 18-24 year-olds, 50% and 51% said that they would pay more for local and organic food respectively. This rose to 53% among 25-34 year-olds.
Consumers over the age of 35 were more willing to pay a premium for local food than they were food produced to organic standards, at 58% and 51% respectively. Nevertheless, higher prices remained a barrier to many.
‘Play small to win big’
IRI’s Abotorabi believes it is an opportunity for food manufacturers and retailers to capitalise on growing demand for local brands, but believes they must first get the balance between price and volume right in order to ensure it is a driver for growth.
“We’re seeing more retailers champion local food suppliers in an effort to cut food miles, support local businesses and differentiate their offerings by devoting more store space to local products. But both the retailers and the food producers themselves need to work together to ensure they can convert those who are interested but not yet ‘buying local’ by ensuring the price is right and that shoppers can find the products on shelves before they walk out of the store.
“It’s clear that big brands resonate more strongly with younger, more globally connected shoppers, so there is an opportunity to nurture and develop these connections. However the positive attributes tied to buying local means an increasing number of manufacturers and retailers must not lose sight of the long-term potential to ‘play small and win big’.”