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The Ethical Food Consumer - UK - April 2019

OVERVIEW
What you need to know
Products covered in this Report
EXECUTIVE SUMMARY
The market
Strong sales growth for ethical food and drink over 2013-18
Inflation and slowing volume sales anticipated for 2019-23
Figure 1: Retail value sales of food and drink with selected leading ethical certifications^, 2013-23
War on plastic continues
Food waste comes under increased government scrutiny
Companies and brands
Companies take action on plastic
More free-range claims in animal welfare
Sustainability is a major theme in advertising over 2017-19
The consumer
Eight in ten adults have bought food/drink with ethical certifications
Free-range is the most widely bought food with ethical certification
Figure 2: Awareness and purchase of food/drink with ethical certifications, by type, February 2019
Various factors underpin buying of ethical food and drink
Figure 3: Reasons for buying ethical food and drink, February 2019
Price is the principal barrier to buying ethical food and drink
Figure 4: Barriers to buying ethical food and drink, February 2019
Animal welfare, packaging and food waste are key influences on food and drink buying
Figure 5: Important factors in food and drink buying decisions, February 2019
Ethical aspects encourage loyalty and spark the feel-good factor
Figure 6: Behaviours relating to ethical food and drink, February 2019
Future direction of the economy is crucial for ethical food and drink
Figure 7: Attitudes towards ethical food and drink, February 2019
What we think
ISSUES AND INSIGHTS
Various options for companies to overcome the price barrier
The facts
The implications
Educate consumers about ethical food and drink to boost uptake
The facts
The implications
Need to reassure consumers that their actions make a difference
The facts
The implications
THE MARKET – WHAT YOU NEED TO KNOW
Strong sales growth for ethical food and drink over 2013-18
Inflation and slowing volume sales anticipated for 2019-23
War on plastic continues
Food waste comes under increased government scrutiny
MARKET SIZE, SEGMENTATION AND FORECAST
Increased distribution drives rapid growth in ethically certified food and drink over 2013-18
Fairtrade and Rainforest Alliance become increasingly mainstream
Supermarkets build up their organic ranges
MSC-certified fish and shellfish rapidly gains retail share
Figure 8: Value sales of food and drink with selected leading ethical certifications, 2013-18
Inflation and improved household incomes boost sales in 2018
Sales growth to slow over 2019-23
Inflation expected in line with overall food market 2019-23
Figure 9: Retail value sales of food and drink with selected leading ethical certifications^, 2013-23
Figure 10: Retail value sales of food and drink with selected leading ethical certifications^, 2013-23
Forecast methodology
MARKET DRIVERS
War on plastic continues
Government tax plans add urgency for manufacturers to use recycled plastic
Companies which switch to recycled packaging early should benefit
Governments plan to introduce deposit return schemes for drinks packaging
Supermarkets trial deposit return schemes
Technical issues for manufacturers in creating biodegradable packaging
Initiative to turn food waste into plastic packaging receives government funding
Food waste comes under increased government scrutiny
Widespread concerns about food waste among consumers
Retailers and manufacturers commit to halving food waste by 2030
Supermarkets take various steps to limit avoidable food waste
UK’s low self-sufficiency in food raises concerns
Questions surround Brexit and its potential impact on legislation
State of the economy is crucial for ethical food and drink
Figure 11: CPI vs average weekly earnings, January 2013-October 2018
Scientists advise the public to reduce meat and dairy consumption
Strong growth for meat-free foods and dairy alternatives
Animal welfare concerns help to drive the meat reduction trend
Parliamentary committee calls for international agreement to protect the world’s oceans
Livestock industry makes progress on antibiotics reduction
Eat organic meat and poultry to help combat antibiotic resistance, advises the Chief Medical Officer
COMPANIES AND BRANDS – WHAT YOU NEED TO KNOW
Companies take action on plastic
More free-range claims in animal welfare
Sustainability is a major theme in advertising over 2017-19
LAUNCH ACTIVITY AND INNOVATION
Overview
Environmentally friendly packaging remains the leading ethical claim
Figure 12: Launches in the UK food and drink market, by selected ethical claims, 2015-19
Bottled water brands explore recycled plastic
Figure 13: Evian water bottles made with 50% recycled plastic, 2018
Leading and smaller brands turn to recycled plastic for sweet treat packaging
Figure 14: Thorntons explores use of part-recycled plastic, 2019
Brands and retailers take action on plastic waste
Supermarkets remove plastic packaging from fresh produce
Replacing black plastic
Figure 15: Examples of ready meals launches using alternatives to black plastic, 2019
The Collective alters dye for yogurt pot lids
M&S launches ‘plastic take-back’ initiative
Various brands link with Terracycle on recycling schemes
Figure 16: Hovis Facebook advert for its recycling scheme, 2018
Baby food brand launches ‘zero waste’ scheme
Supermarkets invite shoppers to bring in their own containers for meat and fish
Asda looks to encourage recycling with milk bottle app
Figure 17: Asda promotes its recycling app on on-pack labels for its own-label milk, 2019
Biodegradable claims remain rare
Leading and niche brands release biodegradable tea bags
Figure 18: Examples of tea launches with compostable tea bags, 2018
Niche coffee brand unveils biodegradable coffee pods
Figure 19: Example of biodegradable coffee capsules, 2018
Multiple claims used to build all-round ethical positioning
PG Tips goes biodegradable and puts stronger emphasis on Rainforest Alliance links
Figure 20: PG Tips makes multiple ethical and environmental claims, February 2018
Smaller brands highlight eco-friendly packaging and charity links
Figure 21: Smaller brands highlight eco-friendly packaging and charity links, summer 2018
Rise in sustainable claims
Tesco completes move to 100% sustainable chocolate
Free-from brands are the most active in promoting their use of alternative energy
Figure 22: Examples of free-from launches referencing use of alternative energy on-pack, 2018
Dairy brands flag up their green credentials
Figure 23: Examples of dairy launches referencing use of alternative energy on-pack, 2018
Start-up looks to set new standard on sustainable fish
Iceland launches fish fillets bag of solely bycatch species
Figure 24: Iceland puts the spotlight on lesser-known fish species, September 2018
Iceland removes palm oil across its own label range
Figure 25: Iceland flags up the absence of palm oil on-pack, 2018
New packaging features aim to prevent food waste
Organic brands look to make the benefits of organic more tangible
Sweet treats highlight soil health and supporting the local environment
Organic tea brand makes conservation statement
Figure 26: Organic brands look to make the environmental benefits more tangible, 2018-19
Animal welfare claims remain niche
Free-range claims appear on white milk…
…spoonable and drinking yogurts…
Figure 27: Examples of free-range milk and yogurt launches, 2017-19
…and cream
Figure 28: The Free Range Dairy Facebook advert for its clotted cream, 2019
New fruit and vegetables brand aims to make organic more affordable
START-UPS AND DISRUPTORS CASE STUDIES – TOAST ALE
Company overview
What is it?
Founded
Company mission statement
Founders’ story
Mintel analyst view
Mintel Trends
Why it could succeed
Why it could fail
The verdict
Product information
Figure 29: Toast Ale, March 2019
Media profile
Social media metrics
Figure 30: Social media metrics for company as of March 2019
The brand’s view
Revenue in the last year (as of 1st December 2018):
Sources of funding and support
Target audience
What consumer needs does the range meet?
Product stockists
Looking to the future
START-UPS AND DISRUPTORS CASE STUDIES – GARÇON WINES
Company overview
What is it?
Founded
Company mission statement
Founders’ story
Mintel analyst view
Mintel Trends
Why it could succeed
Why it could fail
The verdict
Product information
Media profile
Social media metrics
Figure 31: Social media metrics for Garçon Wines as of March 2019
The brand’s view
Sources of funding and support
Target audience:
What consumer needs does the range meet?
Product stockists
Looking to the future
ADVERTISING AND MARKETING ACTIVITY
Overview
Tesco presents sustainable chocolate as extra permissible
Figure 32: Outdoor advert from Tesco promoting its sustainable chocolate sourcing, 2019
Supermarkets focus on provenance and traceability
The Co-op plays up support for farmers and communities
Morrisons emphasizes close relationship with suppliers
Waitrose highlights responsible sourcing for fish and dairy cows’ grazing access
Iceland Christmas advert reignites the palm oil controversy
Figure 33: Iceland anti-palm oil Christmas TV advert, 2018
War on plastic ramps up
Soda Stream urges the public to give up bottled water to save the planet
Figure 34: Soda Stream ‘Time for a Change’ TV advert, 2018
Thames Water also moves against bottled water
Figure 35: Thames Valley ‘Tap Tastic Not Plastic’ direct mail advert, 2018
WWF runs the #UseLessPlastic twitter campaign
Animal welfare
Vegan groups continue to criticise the dairy industry
Figure 36: Anti-dairy adverts from vegan organisations, 2017-18
Figure 37: Advert from Viva! Mother’s Day campaign, 2019
High-welfare dairy systems take to social media
Figure 38: YouTube adverts from high-welfare dairy systems, 2018
CIWF brings to light the ‘sad truth about parmesan’
Riverford portrays organic eggs as the best option to ensure animal welfare
Veganuary urges the Prime Minister to join the campaign
Figure 39: Veganuary outdoor advert, 2019
Organic UK portrays organic food as better for environment and health
…and looks to explain the meaning of organic
THE CONSUMER – WHAT YOU NEED TO KNOW
Eight in ten adults have bought food/drink with ethical certifications
Free-range is the most widely bought food with ethical certification
Various factors underpin buying ethical food and drink
Price is the principal barrier to buying ethical food and drink
Animal welfare, packaging and food waste are key influences on food and drink buying
Ethical aspects encourage loyalty and spark the feel-good factor
Future direction of the economy is crucial for ethical food and drink
AWARENESS AND PURCHASE OF FOOD AND DRINK WITH ETHICAL CERTIFICATIONS
Eight in ten adults have bought food/drink with ethical certifications
Figure 40: Awareness and purchase of food/drink with selected ethical certifications, February 2019
Over-55s are key buyers of ethical food and drink
More women than men buy ethically certified food and drink
Over half of adults buy three or more types of ethical food and drink
Figure 41: Buying repertoire of food/drink with ethical certifications, February 2019
AWARENESS AND PURCHASE OF FOOD AND DRINK WITH ETHICAL CERTIFICATIONS BY TYPE
Free-range is the most widely bought food with ethical certification
No bias in free-range buying by financial health
Figure 42: Awareness and purchase of food/drink with ethical certifications, by type, February 2019
Free-range milk
Half of adults buy Fairtrade food and drink
Fairtrade should benefit from highlighting its environmental credentials more
Environmental sustainability chimes most with under-35s
Urgent need in some categories to reassure younger consumers on the environment
REASONS FOR BUYING ETHICAL FOOD AND DRINK 
Animal welfare is the top reason for buying ethical food and drink
Figure 43: Reasons for buying ethical food and drink, February 2019
Four in ten buyers are driven by environmental concerns
Strong overlap between animal welfare and environmental considerations
Figure 44: Examples of food launches with both an animal welfare and an environmentally friendly packaging/product claim, 2018
A desire to avoid unwanted ingredients motivates a quarter of buyers
Younger Millennials are especially likely to see certified products as healthier than standard versions
Organic buyers see a strong health halo for certified food/drink
…as do buyers of MSC fish
Figure 45: Example of MSC-certified product promoting wild-caught fish as a healthier choice, 2019
BARRIERS TO BUYING ETHICAL FOOD AND DRINK 
Price is the principal barrier to buying ethical food and drink
Figure 46: Barriers to buying ethical food and drink, February 2019
Need for retailers to highlight where ethical products do not carry a price premium
Presenting ethical products as the savvy option should boost sales
Discounters can help to drive uptake
Consumers’ trust in standard products hinders uptake of ethical food and drink for a small minority
One in five are unsure about what the different certifications stand for
Need for producers to make their differences from standard practice more tangible
IMPORTANT FACTORS IN FOOD AND DRINK BUYING DECISIONS
Animal welfare sways 45% of food and drink buyers
Figure 47: Important factors in food and drink buying decisions, February 2019
Strong overlap in interest in welfare of animals and supporting farmers
High-welfare producers are not getting the full benefit of consumer concerns around animal welfare
Making animal welfare policies more tangible would help high-welfare systems to attract ‘missing’ users
Videos of farms would help to tangibly demonstrate welfare standards and transparency
Environmentally friendly packaging is valued by four in ten
Consumer expectations add to the urgency for companies to tackle plastic waste
Need for companies using sustainably sourced cardboard to highlight this more strongly on-pack
Figure 48: Examples of food/drink launches highlighting sustainable cardboard sourcing, 2018
Food waste is neck-and-neck with packaging in consumers’ priorities
In-store recipe cards on using up leftovers would help to reduce food waste
Strong overlap in packaging and food waste concerns
Figure 49: Waitrose pasta with packaging made partly from food waste, 2019
Over-55s are particularly keen to support local producers/farmers
Promoting local produce would help to spark the feel-good factor
Antibiotic-free labels appeal to a quarter
BEHAVIOURS RELATING TO ETHICAL FOOD AND DRINK
Seven in ten adults have made efforts to reduce plastic packaging use
Concerns about food waste set challenge for companies looking to reduce packaging
Many are amenable towards using their own containers at supermarkets
Eco-friendly packaging is well-placed to appeal
Figure 50: Behaviours relating to ethical food and drink, February 2019
Half of adults are loyal to companies whose ethics align with their own
Need to put ethical claims directly in the path of shoppers
Strong feel-good factor around ethical food and drink buying
Need to reassure consumers that their actions make a difference
ATTITUDES TOWARDS ETHICAL FOOD AND DRINK
Widespread expectations on retailers to reduce packaging waste
Figure 51: Attitudes towards ethical food and drink, February 2019
Future direction of the economy is crucial for ethical food and drink
High-welfare producers can benefit from promoting a ‘less but better’ mentality
Widespread uncertainty over whether independent ethical schemes are superior to those from companies
Ethical buying is strongly linked with social image for the young
APPENDIX – DATA SOURCES, ABBREVIATIONS AND SUPPORTING INFORMATION
Abbreviations
APPENDIX – MARKET SIZE AND FORECAST
Forecast methodology
Figure 52: Forecast of UK value sales of food and drink with selected leading ethical certifications^, best- and worst-case, 2018-23

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