Organic food companies are increasingly turning to sustainability in order to shore up their green credentials. Organic Monitor research finds that organic food pioneers are leading the way, with a growing number of companies marketing their products on sustainability values.
Slowing market growth rates and rising consumer expectations are having an impact on organic food sales. The UK market showed negative growth last year, whilst most European countries reported low single-digit growth. Although the global growth rate remains positive, it is far from the 15% plus rates observed in previous years.
The economic slowdown has reduced consumer spending power, especially in the UK which remains in a deep recession. Another factor is changing consumer behaviour. With growing interest in climate change, third world debt and ethical issues, consumers are demanding more from organic foods. They are looking at products that are ethically sourced, have low carbon emissions, support indigenous communities and have low ecological footprints. To these consumers, organic is only part of a complex demand equation.
Changing market conditions are leading organic food companies to raise their game and adopt sustainability initiatives. Some, such as Green & Black’s, are focusing on ethical sourcing. The company’s Maya Gold chocolate was the first official fair trade product in the UK in 1995. This year, Green & Black’s has committed to make all its products certified fair trade, making it the world’s leading brand of ethical chocolate. Its fair trade pledge involves giving an additional US $0.5 million to Dominican farmers for sustainability and social infrastructure projects.
Consumer concern about climate change is leading some organic food companies to offset their carbon emissions. The Dutch organic fresh produce company EOSTA is a pioneer with its range of climate-neutral organic products that include oranges, apples, tomatoes and kiwi fruit.
Other companies are reducing their carbon footprints by using renewable energy sources and / or investing in forestation projects. For instance, the leading UK organic dairy company Yeo Valley Organic, is using ‘green electricity’ to power its manufacturing and warehousing facilities.Other organic food pioneers are strengthening consumer confidence by providing greater transparency and traceability. The German company Fish & More has set up a pioneering tracking system for its organic seafood; a unique code enables consumers to trace its Followfish products to where the fish was caught and how it was transported. Organic and Marine Stewardship Council (MSC) certified, Followfish products are positioned as 100% sustainable seafood.
Another group of organic food companies are adopting the Sustainability Flower navigator system. Developed by the Nature & More foundation, it enables the environmental and social dimensions of organic food products to be measured and communicated to consumers. The web-based system provides carbon, water, air and other environmental impacts of certified products.
Leading fair trade companies are also adjusting to changing market conditions by adopting sustainability initiatives. Alter Eco, one of the world’s largest fair trade companies, has invested in various organic and ethical sourcing projects in developing countries. Like organic food pioneers, it is also reducing its carbon footprint. Its Carbon Zero programme is designed to measure, reduce and compensate the carbon emissions of its products.
Growing consumer sophistication is leading to a proliferation in food eco-labels: organic, fair trade, biodiversity, carbon footprint, water footprint, etc. Whilst consumers are demanding products with low environmental and social impacts, the plethora of logos & symbols is creating consumer confusion. Realising this, a growing number of organic certification agencies are integrating sustainability values into their standards. For instance, Switzerland-based IMO has introduced new CSR and fair trade standards. Other certification agencies are following suit.
The global market for eco-labelled food products is undergoing a transition with some convergence occurring between organic and other eco-labels. Organic food pioneers are setting the pace by adopting a number of sustainability initiatives. Organic Monitor expects market winners to be those companies who can successfully communicate these sustainability values to consumers in the growing sea of eco-labels.
Sustainable Foods Summit
The Sustainable Foods Summit is a series of summits that focuses on the leading issues the food industry faces concerning sustainability, organic, fair trade and other eco-labels. In each edition, pioneering organic and fair trade organisations such as Green & Black’s, EOSTA, Fish & More, Alter Eco, Fairtrade Labelling Organisations (FLO), Ecocert, IMO and Solidaridad share their experiences. More details on upcoming editions is on the website
Posted: May 7th 2010
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