Sustainability in the Food Sector is the New Reality
Global warming began in 1988 when the deception of the ozone layer became increasingly prominent in the international public debate and political agenda. Though back of mind for most, today it is top of mind for retailers, consumers, and manufacturers in the food sector with an urgent focus on reducing plastic packaging waste in our communities and oceans and achieving zero-based emissions. This past month the Retail Council of Canada held their first Retail Sustainability Conference. Retail’s top innovators, sustainability experts, government leaders, QSR, and CPG professionals got together to share best practices on how to create actionable paths to zero plastic waste and net zero emissions. Greenhouse – Canadian beverage brand summoned it up best with the recent launch of their 99.9% plastic-free bottles.
“The Sea is Sick of our Plastics”!
What is Sustainability?
“Sustainability consists of fulfilling the needs of current generations without compromising the needs of future generations while ensuring a balance between economic growth, environmental care, and social well-being”. April 6, 2022
How Does the Food Sector Impact Sustainability?
It is estimated the global food sector system accounts for 21%-37% of yearly greenhouse gas emissions.[i] Sustainable farming practices would help reduce air, water, and soil pollution. In the United States, it is estimated cattle are responsible for 66% of all emissions from animal farming.[ii] Closer to home, 10% of Canada’s greenhouse gas emissions are from crop and livestock production.[iii]
Of greater concern is the use of plastics in Canada’s food sector; 37.3M Tons of plastic are utilized annually for food packaging that often end in landfills / oceans.[iv]
What are Consumer Attitudes Toward Sustainability?
A 2022 study undertaken by Mintel revealed: 1. Climate Change, 2. Plastic pollution, and 3. Waste pollution is 3 of consumers’ Top 6 environmental concerns.[v] Despite the inflationary wars, GFK research revealed that 62% of consumers identify climate change as an extremely or very serious issue, [vi] and 84% of consumers say that sustainability is an important factor in their purchase.[vii] Environment friendly/sustainable is now a Top 5 motivator for purchasing a brand in Canada,[viii] and brands that achieve a greater proportionate of their sales from products with environmental, sustainable claims enjoy greater brand loyalty.[ix] Yet, new research from Deloitte Canada suggests 57% of Canadians do not believe most sustainability claims.[x]
Will Consumers Pay More for Sustainable Based Products?
Consumers, especially the younger generation continue to place a premium on sustainability. When asked “who are willing to pay more for environmentally friendly products”, overall, 28% of consumers said yes. Broken down by demographic, 49% of Gen Z and 48% of Millennials said yes, as compared to 23% for Gen X and 16% for Baby Boomers.[xi]
What is the Size of the Sustainable Based Food Market?
The environment-friendly and sustainable food market is forecasted to be valued at $170.5B by 2028 and growing at a Compounded Annual Growth Rate of 6.6% for the forecast period of 2021-2028.[xii] In the US, despite high inflation, sustainability-marketed products took more market share in 2022 and now comprise 17.3% of purchases. That is up 0.3% from 2021.[xiii] Products that are making ESG claims have experienced disproportionate growth as compared to their traditional counterpart, +36.2% CAGR differential between the period of 2018-2022.[xiv]
What is a Canadian Brand to Embrace in the Sustainable Based Market?
Refresh Packaging is a Canadian-owned, women-empowered business founded by Christine Reyes. Their mission: “To Bring Environmentally-friendly Consumer Packaging to Market and Eliminate the Usage of Unnecessary Single-use Plastic Waste.” In Canada, it is estimated:1) 36B feet of plastic cling wrap[xv] and 2) 7.6B plastic zip-loc bags[xvi] are disposed of into landfills/oceans each year. Refresh Packaging is the first to market with:
- Cling wrap
- Freezer compliant zip-loc bags
- Draw-string trash bags
- Pet waste bags that go to the composter and breakdown in less than 50 days.
Food Distribution Guy’s 3 Brand Strategies – Sales Perspective
- Brands must have a point of differential (POD). Today, sustainability is their POD. Tomorrow it will be the norm.
- Consumers care about sustainability but are weighing the cost. Brands that deliver sustainability benefits in ways consumers understand, and at the price points they desire, then brands will thrive.
- Consumers seek sustainable products. Brands that communicate and ensure their target audience trust their certifications will secure brand loyalty.
I leave you with this quotation:
“The Greatest Threat to our Planet is the Belief that Someone Else Will Save It”.
[ix] Consumers Care about Sustainability and Back it Up With Their Wallets, McKinsey and Nielsen IQ, May 2023
[xiv] Consumers Care about Sustainability and Back it Up With Their Wallets, McKinsey and Nielsen IQ, May 2023