What strategies for retailer facing more responsible and locavore consumers? (Part 1)

Facing the growing concerns of consumers.

 “A typical carrot has to travel 1,838 miles to reach your dinner table”. This surprising figure is just an example of how food processes and food distribution contribute to the climate change issue and explains why the locavorism trend has gained such importance over the last few years. 

Nowadays, purchasing sustainably sourced products represents a key purchasing decision for 55% of consumers (WSL survey for BearingPoint, 2017). According to the Sustainable Table, sustainable food is defined as a ‘’food that does not harm the environment, respects workers, is humane to animals, provides fair wages to farmers, and supports farming communities”.  Thus, the rise of local farmers, producers’ shops, organic and specialized stores reflects the growing consciousness for local and sustainable products. Therefore, retailers need to come up with greener solutions and innovative ideas to build trust with consumers and respond to their demand of locally sourced products. 

On the other hand, global food waste represents another issue that big retailers need to tackle. Approximately 1/3 of the world’s food is lost every year (14% by retailers) and contributes for 8% of total CO2 emissions (FAO, 2019).

                                                         

How are retailers facing the growing conscious of consumers and what are their responses in terms of sustainability and consumption model?
Here are some facts and solutions retailers should adopt or/and are already adopting to move towards a greener supply-chain and pave the way to a new consumption model.

79%

of consumers prefer to purchase products sourced in their country, in 2017, (WSL survey for BearingPoint, 2017).

In 2017, 79% of consumers prefer to purchase products sourced in their country (WSL survey for BearingPoint, 2017), and approximately 61% of consumers do it for the positive impact on the environment (Observatoire Cetelem, 2019). From 2017 to 2018, the number of European organic and local farms has increased by 4,9% reaching almost 325,000 farms across the continent. These figures illustrate the importance of the locavorism trend in both the United States and Europe and highlight how it has become a challenge for traditional retailers. Consumers are moving towards more responsible and more sustainable purchasing behaviours, and thus prefer to buy products sourced and produced in their own country and region. But, how does a locavorism consumption contribute to a better environment? 

The locavorism trend has impacts on three pillars of sustainable development. In terms of social development, eating locally enables supporting farmers and allows to build social relationships within the community for 49% of consumers. Locavorism is also a good way to support local labour for 43% of people (Observatoire Cetelem, 2019) and boost your local economy. Finally, in terms of environmental impact, locavorism enables to reduce CO2 emissions due to transportation (11% of food processes) and encourages local farmers who tend to deploy more sustainable methods of production and protect biodiversity.

Moreover, eating local products implies that less packaging is needed, since less plastic is used to conserve the freshness of the products. Lastly, locavorism suggests a better inventory management which allows to prevent perishable product and food waste.  For instance, TOMRA, an innovative food processing company, is able to forecast the best period to harvest and prevent perishable food thanks to sensor-based machines, by sorting and grading food products; and thus, reduce inventory risks. Therefore, it is worth it for retailers to respond to the consumption changes, proposing new solutions to reduce food waste and become greener.

20%

less food waste for the brand Mark & Spencer by working with suppliers with certain standard.

Marks & Spencer represents a relevant example of food retailer’s responses to sustainability issues. Its approach to food waste has allowed the retailer to develop innovative and smart solutions for managing their surplus of food. The brand actually works with suppliers with certain standards, which enables them to cut 20% of food waste and give the surplus to charities. In addition, the retailer has developed effective communication tools to educate consumers to prevent food waste at home. In the fashion industry, lifestyle product brands are using more and more technology to their delivery systems and are now decoupling delivery from shipping. The consumer first gets a virtual delivery via an app, and then decides to proceed to the order to receive the product physically later. This allows retailers to reduce waste, delivery costs and gas emissions as there are less returns and it increases the customer’s shopping experience. Moreover, food and beverage brands have been increasingly working with innovative and eco-friendly start-ups. For instance, the Australian company “Australia’s better packaging” developed plastic-free packaging from biodegradable resources for every category of items (from food to personal care).

Additionally, many more supermarket chains have integrated organic and local products in their stores. For instance, the French retailer Leclerc has created its own organic concept ‘’Village Leclerc’’ which is specifically dedicated to organic and local food. Providing ‘’a small store inside their store’’ has now become a common feature to every retailer, since consumers tend to prefer shopping inside small specialized stores. On the other hand, retailers are developing more and more relationships with local farmers by supporting them economically and socially. As a matter of fact, Innocent is currently working with Spanish local strawberry farmers to provide the sufficient technologies in order to use less water and become more sustainable at the beginning of the supply-chain. Moreover, in response to the Covid-19 crisis, the supermarket chain Hyper and Super has expressed its willingness to engage with French local producers for a vast majority of items (cheese, meat, fish, vegetables).

 

Authors : Bettina Devines Guedes , Faustine Samyn

Key references

  • Agence Bio, (2019). Organic farming and market in the European Union, Agence Bio International Publications. Retrieved from: https://www.agencebio.org/wp-content/uploads/2020/04/Organic_farming_market_EU_2019.pdf
  • Cho, Rene, (2012). How green is local food, State of the Planet Online, Columbia University. Retrieved from: https://blogs.ei.columbia.edu/2012/09/04/how-green-is-local-food/
  • Elaine de Azevedo, (2015). Food activism: the locavorism perspective, Ambiente and Sociedade, Vol.18, n.3, Sept. 2015. Retrieved from: https://www.scielo.br/scielo.php?pid=S1414-753X2015000300006&script=sci_arttext&tlng=en
  • Food and Agriculture Organisation of the United Nations, (2019). Food loss and food waste, FAO of the UN Online. Retrieved from: http://www.fao.org/food-loss-and-food-waste/en/
  • L’observatoire CETELEM, (2019). Think local, act local: 17 pays européens passés à la loupe, Cetelem. Retrieved from: https://observatoirecetelem.com/wp-content/themes/obs-cetelem-V3/publications/2019/observatoire-cetelem-consommation-2019.pdf
  • Mark & Spencer, (2018). Our food waste approach. Retrieved from: https://corporate.marksandspencer.com/sustainability/quick-reads/our-food-waste-approach
  • Minitry of environment and food of Danemark, (2018). The value of food – global challenges and local solutions to food waste, April 2018. Retrieved from: https://mst.dk/media/153342/the-value-og-food-global-challenges-local-solutions-to-food-waste.pdf
  •  NJ department of Environmental Protection, From field to fridge: things to consider when making food choices, Pesticide control program and pesticide evaluation and monitoring. Retrieved from: https://www.state.nj.us/dep/enforcement/pcp/bpo/pem/handouts/FoodSystems.pdf
  • Roy Erez, (2019). Sustainability in retail: good for business, great for humanity, Forbes online. Retrieved from: https://www.forbes.com/sites/royerez/2019/10/01/sustainability-in-retail-good-for-business-great-for-humanity/#1a0873e66dec
  • The Better Packaging Co., (2020). Our sustainability promise, The better packaging Co. Online. Retrieved from: https://www.betterpackaging.com/better-packaging-co/
  • TOMRA, food processing equipment: smart investments. Retrieved from: https://www.tomra.com/en/sorting/food
  • Vie Publique France, (2020). De la sociéte de consummation, à la société de deconsommation, Vie Publique Online, January 2020. Retrieved from: https://www.vie-publique.fr/eclairage/272242-de-la-societe-de-consommation-la-deconsommation
  • WSL survey for BearingPoint, 2017: Xavier Baudoin, Romain Francois, (2017). Create a ‘connection’ with your customer, BearingPoint online. Retrived from: https://www.bearingpoint.com/fr-fr/notre-succes/thought-leadership/create-a-connection-with-your-customer/
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