Danielle Tolson, Head of Communications, Nielsen U.K.
In 2007 we couldn’t open a magazine, turn on the television or nip to the shops without being hit with messages about being green. It was the year that ethical consumerism went mainstream. It was the year that we started using reusable shopping bags, stopped resenting our local councils for making us recycle our rubbish and started showing interest in our carbon footprint.
2008 started in much the same way. In the February of that year free range chicken sold out in supermarkets after the ‘Hugh’s Chicken Run’ series aired on Channel 4. Later on in 2008 M&S began charging shoppers for carrier bags as part of the Plan A strategy and other retailers continued to message on their own ethical credentials. And then the credit crunch, that had been affecting the American economy for some time, hit our shores. House prices tumbled, and with them consumer confidence. Meanwhile increasing demand on commodities pushed cost prices up and food inflation began to rocket. The nation became worried about their jobs, their homes, their pockets and suddenly being green no longer made the headlines.
Two years on and there is a willingness and an amount of concern about ethical issues - at the end of 2009 about three-quarters of people polled in Great Britain said they were concerned about environmental issues. Climate change, packaging waste and air pollution were the environmental issues that people said they were most concerned about. But this concern does not necessarily convert to action in terms of changing buying behavior.
Can We Afford To Be Ethical? Can We Afford Not To?
Nielsen research shows that as we come out of recession fewer people are prepared to change their behaviour based on ethical and environmental considerations. In mid 2008, 20% of consumers were considered to be ‘ethically enthused’ – these people are described as those who show a real willingness to change their behaviour to benefit the environment and support ethical issues - this dropped to 11% by 2010 with many more people being ‘ethically inert’ (people who care to a degree but are not prepared to change their behaviour) now than 2 years ago (increased from 4% to 9%). The other 80% are those who care somewhat but are not fully committed or ‘ethically ambivalent.'
While 43% of people still claim that they try to buy products that are kinder to the environment (unchanged since 2007), there has been a significant drop in people who say they are willing to pay extra for such products, from 37% in 2007 to 28% in January 2010. In fact, 68% of people say that they would like to buy environmentally friendly products but that they think they are too expensive and similarly, 65% said they would like to buy ethically produced products but found them too expensive.
There is also a definite drop in people who now say they would be willing to switch brands if they thought the alternative had better ethical credentials compared to 2007. For example, in 2007 46% of people said they would switch to another brand if they thought the company who made it was more environmentally friendly, but in 2010 this has dropped to 37%.
Organic has been one of the hardest hit casualties of the recession with sales of organic goods in Grocery Multiples in decline by 15% in 2009 compared with total food growth of 5% for the year. In January 2010 only 23% of people said that they tried to buy any organic food and 46% said they never buy it.
Save the planet and save money
However, embracing some practices that contribute towards sustainability has made sense in the economic climate. Food waste became a big area of focus and here consumers found they could make a contribution to the environment and save precious pounds by being more careful about how much food they throw away. With food inflation peaking at 10% in August 2008, consumers used strategies such as buying smaller pack sizes to save money. The proportion of products sold on (what could be seen as waste driving) multi-buy promotions fell in favour of price cuts.
Switching to low energy light bulbs was given a big lift when Tesco reduced the price of these in store before the recession hit but the benefit of energy efficiency really came into its own amongst the backdrop of the recession. In January 2010, 46% of people said they try to buy energy efficient appliances or products compared to just 27% in 2007.
Other areas where people have increased their ethical efforts in the past 3 years include people attempting to buy products that have little or no packaging which increased from 45% in 2007 to 52% in 2010. The number of people claiming they actively try to buy products in recycled packaging has also increased from 38% in 2007 to 43% in 2010.
There is a slight increase in the number of people who claim to try to buy local products, up one point to 49% in 2010 and 62% of people claim they actively try to buy British. 44% of people say they actively try to buy free range meat and eggs and 21% say they actively try to buy sustainable fish (these last three are new to the survey so no comparable data is available). The trend to ‘grow your own’ has enjoyed a revival and 23% of people claim to grow fruit and vegetables.
Before the economic downturn, being seen to be green was very en vogue. It was a trend and many speculated at the time that it may be a passing fad. But coming out of recession we have noted a change in the consumer that could well embed itself for the long term. Values have been re-assessed, austerity has been exercised, the wasteful consumerism and excessive spending of the last decade has been proven to be an unsustainable way of life. Though consumers are not as willing and not as able to pay premiums for ethically produced food or to pay more because it is the latest trend, going forward this type of product does have a new found synergy with the more cautious and considered consumer. There is plenty of scope for growth in this area and where a product can offer good value and even savings to the consumer in addition to having sustainable and ethical credentials there is sure to be a market for the foreseeable future.