Meeting the demand for sustainability

A new report has highlighted the need for retailers to offer fairtrade and "green" ranges, writes Mark Hotton.

Sustainability might be a buzzword, but it is fast becoming an integral part of modern business, according to a report by PricewaterhouseCoopers UK retail and consumer group.

Consumers want to buy more sustainably, but are restricted by price, patchy availability and contradictory messages, claims the report, which questioned 4,000 consumers and retail and consumer goods business leaders.

It is expected that economic, regulatory and consumer pressures will bring a wave of innovation and action by retailers, but those companies that fail to respond in the short term will find themselves playing catch up in the future. Not being at the forefront of the movement can be perceived negatively by consumers.

Evidence that consumers want more sustainability is shown by their shopping behaviour and survey responses.

The number of people buying fairtrade food has risen from 20 per cent three years ago to 50 per cent now, while organic food buying increased from 22 per cent to 43 per cent.

However, 58 per cent of consumers said they buy fewer sustainable products than they would like to.

To capitalise on the rising trend, it is clear businesses need to bring more sustainable products to the shelves at a lower or zero premium than standard items. Price remains one of the biggest barriers, with almost 50 per cent of consumers unwilling or unable to pay the premium associated with more sustainable goods - respondents said they are only willing to pay a premium of about 20 per cent.

The garden centre industry is one sector well placed to take advantage of the consumer demand for sustainable retailing, with excess packaging one area that could be tackled immediately.

Some 62 per cent of respondents believe that reducing the amount of packing on products is the most important action retailers could take to help the environment, while 38 per cent said retailers should stop providing plastic bags.

PricewaterhouseCoopers UK retail and consumer leader Mark Hudson said sustainability is a business imperative and the focus must to be on securing business for the future. "Unlocking the demand - and the willingness to pay a premium - will require innovation, improved communication, bold strategic moves and greater clarity."

He believes the best-run companies will be the most sustainable and successful. "Those moving first and fastest are creating resilient models for the long term, changing the rules of the game and generating a commercial advantage."

Removing some of the confusion surrounding sustainable issues will be an important factor in a company's future success. Consumers "continue to be bombarded with messages about reducing their carbon footprint, but lack the mechanisms to differentiate productions on the basis of their relative impact", the report said.

Consumers have also reached the point where they expect sustainable attributes to be an inherent part of the products and services offered by a company, but firms must ensure they are offering an accurate message and not "greenwashing" - misleading consumers over a their environmental practices.

The report warns: "The consequences of being found to be operating unethically, or in an environmentally unfriendly manner, can be damaging and long-term."

Nearly 20 per cent of consumers say they are confused about the social and environmental trade-offs of their purchases, which gives operators an opportunity to demystify the issue and help educate, and sell to, consumers.

But despite the obvious risks, the report says: "The business case for investing in sustainable business models is becoming increasingly clear to all organisations and not just to those operating in 'green' niches."

That means those company's which adopt green and sustainable philosophies and practices sooner rather than later will benefit the most. The green revolution is coming, it's now a matter of how quickly.

Garden retailers - and, indeed, anyone offering horticulture products or services - must examine their business and consider how they are being perceived by their customers, and potential ones, too.

Consumers are making it clear they are unlikely to tolerate unethical or environmentally unfriendly products - 79 per cent of consumers feel it is the company's responsibility to remove environmentally damaging products from their offers.

The availability of alternative products remains a barrier, with 20 per cent of consumers saying it is a key reason for not buying more sustainable goods - that's a fifth of the population keen to buy sustainably produced goods, but unable to do so because the market is not making them available.

Sustainable alternatives do not exist for all product categories yet, but there is no reason why they couldn't be developed to tap into the emerging market. However, retailers will need to ensure their products take on environmentally sustainable attributes or be superseded by others that do.

PricewaterhouseCoopers sustainability and climate change practice leader Erica Hauver is adamant that demand for sustainable products is a significant trend. She said: "The emerging combination of consumer empowerment and awareness, pressure on resources and government action are set to transform the retail and consumer environment. The drive for sustainability is a game- changing trend - companies that do not invest and act at an early stage will have to play catch up.

"The leaders are making interventions that have consequences for us all."

Key statistics

- 2005: 20 per cent of shoppers buy fairtrade food and 22 per cent buy organic food.

- 2008: 50 per cent of shoppers buying fairtrade food and 43 per cent buy organic food.

- 58 per cent of today's consumers buy fewer sustainable products than they would like to.

- 50 per cent of consumers can't or won't pay current premiums for sustainable goods.

- 20 per cent - premium shoppers are prepared to pay for sustainable goods.

- 62 per cent of consumers say retailers should reduce packaging.

- 38 per cent say retailers should stop providing plastic bags.

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