Recession fails to dampen sustainable food, drinks sales

Despite a recession that has now lasted several years, consumers continue to care about sustainable food and beverages.

Between 2005 and 2010, more than 13,000 sustainable food and drink innovations have been launched, according to a new report on the sector by Mintel. At the forefront of these launches are non-alcoholic beverages with sustainability claims, with nearly 3,000 launches in the past five years.

"Consumers remain engaged to varying degrees, with many new products continuing to come to market at all price points, name brands and private labels alike," said David Browne, a senior analyst at Mintel and lead author of the report. "Without any overt market drivers likely to shift behavior in the near future, we expect that the sustainable food and drink market will grow incrementally, rather than jump dramatically, over the next few years."

Based on its consumer surveys, Mintel identifies women, individuals aged 18-24 and 55-64, and those earning $50,000 to $75,000 a year as those who occasionally or regularly buy green and sustainable products. Those who almost always buy these products, a distinct subset of users, includes men, 25-44s, and those in households earning more than $75,000 annually.

The groups least-likely to engage in this sector are those over-65, and those in households earning less than $25K annually.

Such packaging claims as 'recyclable,' 'eco-friendly,' 'all natural' and 'organic' are fairly well recognized by consumers, but other product claims, such as 'solar/wind energy usage' and 'fair trade' have yet to enter mainstream consciousness.

Even those who have heard of the various sustainability claims do not necessarily know what the claims really mean, Browne said. "There isn't a clear solution for companies in how to impart that knowledge, distinguish themselves from the pack and drive sales," Browne said. "This will be a primary challenge for the market in the next few years."

While consumers are still learning the lexicon of the sustainability movement, manufacturers overwhelmingly see the importance of adopting this kind of platform, the report states. But because of the costs involved, not all of them are actually doing so.

According to a study by Accenture, a management consulting firm, conducted on behalf of the United Nations Global Compact (UNGC), nearly 90 percent of surveyed business leaders believe they should be integrating sustainable business practices into their operations, but only 54 percent believe this has been achieved.

CEOs are hampered by the need to commit resources to building a sustainability platform that may not reap a reward (in shareholders' eyes) for 10-15 years, Accenture concluded.

Two companies leading the pack are Unilever and Groupe Danone, Browne said. "They both share a common trait that may be driving their work thus far — ownership of high-profile brands that loudly proclaim sustainability (Ben & Jerry's and Stonyfield Farm)." Both firms are profiled in the report.