Sustainable manufacturers reaping consumer rewards

By Neil Merrett

- Last updated on GMT

Related tags Iri Organic food

US consumers are becoming increasingly concerned over social and
environmental implications when choosing packaged food and beverage
brands, according to a new report by Information Resources, Inc

The findings highlight a growing opportunity for manufacturers around the globe to capitalise on demand for products that can claim to offer some sustainable benefits over their rivals. IRI surveyed the attitudes of 22,000 US shoppers to organic, eco-friendly produced and packaged goods and fair treatment of employees. About half of the respondents to the survey said they considered at least one of these factors when making a purchase. A further one fifth of the respondents were found by the IRI survey to be "sustainability driven",​ committing themselves to requiring at least two factors relating to how green, organic or ethically manufactured a product is. IRI's chief marketing officer, Andrew Salzman said the findings signalled a major change in how products like coffee, liquor and even cosmetics are made, as segments like fair trade and organic move out of niche markets and into the mainstream. "Our survey indicates that consumers are focused more and more on the social and environmental impact of their consumer packaged goods purchases,"​ he stated. "[This has led to] a viable and growingUSmarket for sustainable products and packaging with the potential to mirror well-developed markets inEuropeandJapan."Organic growth ​ According to IRI, the organic segment is becoming particularly important to consumers with 40 per cent of the survey's respondents claiming to specifically look for products that are grown or produced to the segment's specifications. Salzman said that current growth in the market for organic products is driven by growing concerns over heath and nutrition within diets. "Benefiting from the winning combination of a 'better for you' association and a 'better for the environment' attribute, the organic designation has moved to the front of consumer consciousness,"​ he stated. IRI added that the growing importance of organic food and beverage production was reflected by the number of leading food manufacturers and retailers now focusing on the category. Kraft Foods for example, has launched organic varieties of products like its Wheat Thins and Chips Ahoy brands, while Kroger specifically has an entire line of private label goods in the segment. Beverage makers were also found to be paying attention to the shift with groups like Anheuser Busch launching its organic Stone Mill Pale Ale brand as well as a planned super-premium vodka called Purus. Eco-friendly ​ The survey also concluded that 30 per cent of participants looked for eco-friendly products and packaging when selecting brands. In addition to this demand, a quarter of the 22,000 respondents said they favoured manufacturers that focused both on fair trade practices and a green focus. To this end, a number of larger wine producers have followed suite from smaller wineries in initiating some form of environmentally friendly farming at their sites, IRI said. Coffee processors are also benefiting from consumer sustainability demand with sales of organic or fair trade coffee growing by 94 per cent in 2007, the market analyst added, The increased focus on sustainability, as well as being product wide, is also being seen throughout all age groups. IRI claims that this dismisses the assumption that growing sales of organic, fair trade and green products are a "youth-oriented phenomenon"​. "Consumers aged 55 and older are the real driving force behind this expansion,"​ stated Salzman. "Generally, with the time to seek out specialty items and the resources to afford premium priced products, aging consumers are a critical target market today. ​ However, he added that as manufacturers move to expand their offerings for sustainable produced goods, growth in all consumer groups could be expected. In the short term though, IRI said that strongest growth would be seen in markets already popular with sustainability-driven consumers like coffee- wines, spirits and skin care. Steps to sustainability ​ For producers wishing to expand their presence and consumer visibility, the report highlighted key issues that needed to be addressed for a successful launch. These suggestions include:

  • Evaluating the existing players within sustainable production, particularly in terms of the major niche-players for a particular segment.

  • Considering new distribution channels including speciality stores and online retailers.

  • Ensuring that a producer remains ahead of regulatory and retailer requirements for recyclable and biodegradable packaging materials by fully exploring available options for material reduction.

  • Using sustainable marketing campaigns, whilst ensuring any claims are well documented and measurable.

  • Highlighting particular benefits employed during the production and packaging process, whilst avoiding the word "sustainability".

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