Belt tightening and ethical shopping don't mix, according to some economists. But perhaps we should have more faith in shoppers
There is nothing like an economic slowdown for encouraging the prophets of doom. Last week IGD published its latest review of ethical shopping, including fair trade, animal welfare, local or organic food and environmentally friendly products. It showed rapid growth across Europe and yet still some pessimists are predicting its demise.
"In the tough times ahead", goes the argument, "shoppers will forget about ethics and worry just about price".
Of course price is back high on the agenda but our research does not support this negative view of human nature. Ethical shopping is not about to collapse, especially not for food, and there are several reasons why.
First, people hate to compromise on food. The close scrutiny of what we eat over recent years has sensitised people to the importance of food values. Shoppers are engaged in what they eat and interested in its provenance. As a result, food is not the first place that most people look when they tighten their belts. This is borne out by grocery retail sales, which have been more resilient than the majority of their non-food counterparts this year.
Secondly, ethical shopping is firmly established in the UK and is based on deep-seated beliefs. Four out of five UK shoppers are interested in at least one aspect of ethical shopping and four out of ten actively consider at least two aspects by comparison with about a third in Germany and France.
Backtracking would feel like a betrayal of principle to most of these shoppers. If you have been buying organic milk or fair trade coffee for years then there are other, less guilt-inducing ways to economise when you need to. When we asked shoppers whether an economic slowdown would affect their purchasing of local food, 60% said it would make "no difference", 20% said they would buy less local food, but 20% said they would buy more. The economic benefits of cutting back on a second car or taking a cheaper holiday are simply greater.
Thirdly, the trailblazing companies are dedicated to the cause. When we recently surveyed over 200 industry leaders in 24 countries, 89% had formed a sustainability strategy. They have made a long-term commitment to make their businesses future-proof. So the range and availability of ethical products will continue to expand as companies differentiate and build closer engagement with shoppers. Expect to see more fair trade initiatives akin to Tate & Lyle on sugar and Unilever on tea in the months and years to come.
Finally, ethical shopping is not always more expensive. Admittedly, higher standards usually involve higher costs but not in every case. Sometimes there is a happy coincidence between the ethical agenda and reducing costs. Cutting energy use is a good example and given the six-fold increase in the oil price over the last six years, there could not be a bigger incentive.
When we speak to companies about their sustainability priorities, energy efficiency is top of the list. Piece by piece the food chain will be redesigned to be less dependent on oil in future.
Of course the financial squeeze will impact on everyone and we may not see the same phenomenal growth rates for ethical products this year. The pace may slow but the tide is only heading in one direction. There is much more to come from ethical shopping.n
Joanne Denney-Finch is chief executive of international food and grocery experts IGD