Sustainable shopping: Where do we go from here?
With wildfires raging across the country, and ongoing natural disasters happening around the world, it’s no surprise that our Earth’s sustainability is weighing heavy on consumers’ minds. According to Kantar’s 2022 Sustainable Sector Index, consumers across the globe feel businesses should be focused on reducing water and air pollution, along with improving conditions for workers, as their top sustainability issues to address.
The report notes that more than half (54%) of consumers pay attention to environmental and societal issues in the news and 47% are prepared to invest in companies that try to do good. In the Americas, 84% take careful note or sometimes consider the causes brands support when making purchase decisions.
Yet, inflation is an ongoing reality. As food prices remain high and shoppers are more conscious about what they’re putting in their grocery baskets, sustainable shopping habits are being impacted. Natalie Babbage, a global director in Kantar’s Worldpanel Division and the company’s leading expert on sustainability in fast-moving consumer goods (FMCG), says after three years of steady growth among “eco actives” (environmentally conscious consumers taking action), the decline in activity last year was, in part, due to inflation. “When they were shopping, they were much more concerned about price changes and worried about what they could afford, rather than spending time looking at the labels and checking if something is fair trade,” she says.
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Another contributing factor was the premium price placed on sustainable products across the board, says Babbage. “If you look at glass packaging in soft drinks, it’s only the premium brands that are using them and that’s just not affordable when you’re starting to make concessions in spending.” She also points to the inconvenience of some sustainable practices such as having to go to another location to refill containers or find greener options.
But in spite of inflation woes, early data for 2023 is showing a rebound of eco activism as people become accustomed to higher food prices, she adds. In fact, as shoppers realize the climate issues surrounding them aren’t going away, Babbage says they will be looking to brands and retailers to solve the problem for them. “You’re asking individuals to make changes, but that’s maybe not the most effective approach,” she says. “If brands and retailers were thinking more creatively, rather than how they can add a price premium, we could make more progress and consumers would be happier.”
To that end, grocery giant Carrefour launched a supplier sustainability forum – “Together for Better” – this summer in Dubai, United Arab Emirates, which brought together 13 leading FMCGs with the goal of adopting sustainable best practices and identifying long-term solutions. In its 2026 strategic plan, Carrefour committed to delisting any of its top 100 suppliers who do not deliver on promises for rapid emission reduction as part of the pathway to limit global warming to 1.5 C to avoid the worst consequences of climate change.
Impacts of demographics and income on sustainable shopping
In the meantime, grocers who are still on the fence about taking a stronger sustainability stand may risk alienating certain demographics in doing so. While boomers tend to be more focused on “value for money” right now, Tiffany Wong, EY’s director of environmental, social and governance (ESG) for Canada, says millennials and gen Zs – who will be the most influential consuming cohort by 2030 – will be far more willing to vote for sustainability with their wallets. “We are already seeing this in their behaviour today,” says Wong. “They are reading the packaging labels carefully, looking for recycled content and certification and focusing on brands with purpose.”
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Wong says these consumers don’t differentiate between the retailer and the brand and they expect a collaborative effort in how to deliver on sustainability. Discerning shoppers like these also expect companies to be transparent about their efforts around sustainability. “It’s about being open and honest about where you are today and where you’re heading and showing progress,” she says. “It’s also about matching their ambition with the problem and thinking about how to get tactical with the portfolio of solutions that will get them there.”
Given the premium prices of many green products, income is also playing a key factor in who is shopping sustainably these days – and will continue to do so, says Shelley Balanko, senior vice-president of the Hartman Group, which will be releasing its 2023 Sustainability & Transparency report later this fall. In hypothesizing on what those results will reveal, she says higher income earners will continue to place value on sustainable attributes, even if they’re pricier. “When we went into the pandemic, everyone thought sustainability would absolutely take a backseat and it didn’t,” she says. “It actually raised consumer awareness about some of the key social issues that are part of sustainability.”
Balanko says those who can afford to keep purchasing products that align with their values will do so, knowing there is “a ripple effect beyond their own personal gain.
Future sustainability trends and concerns
Going forward, industry watchers say there are some key areas gaining favour in sustainable practices that retailers should keep on their radar. One is circular economies, where the goal is to extend the lifecycle of products for as long as possible. This year, Canada held its inaugural Circular Economy Summit in Toronto, which attracted more than 450 attendees including brands, retailers, waste management companies and academia. As producers take more responsibility around the lifecycle of the products they sell, EY’s Wong says consumers will be engaging with retailers in different ways. “So, think about refillable packages for free in bulk shopping, or recycling and payback programs,” she says. “We don’t necessarily see that in many stores today, but it’s definitely something to watch.”
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The regenerative agriculture movement is another key area, as consumers shift towards being more proactive about sustainable food systems – including how to promote better soil health and discourage over-harvesting. Wong says retailers are starting to think more about the entire supply chain, too, in terms of how they can collaborate with farmers and other suppliers. “They’re recognizing they have a sphere of influence in being able to bring sustainable products to their customers,” she says.
Martin Gooch is CEO of Oakville, Ont.-based Value Chain Management International (VCMI), which helps businesses create environmentally and financially sustainable supply chains. He says if retailers really believe sustainability will be a differentiating factor, it’s key they figure out how to place themselves ahead of the curve now by collaborating across the supply chain. A recent report from VCMI, Low Carbon Food Production: How farmers and food businesses can profit from decarbonizing, delves into strategies on ways to do this.
He says a barrier to progress in this area is that some retailers don’t have a good handle on what sustainable really means to their target shoppers, which is preventing them from seizing opportunities. “It’s difficult to target consumers’ sustainability issues if you don't know what they are to begin with,” he says. “I’m also not convinced that consumers factor sustainability alone in their purchasing – you have to make it meaningful, so how do you make the food system more efficient and then communicate that to your customers.”
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Kantar’s Babbage agrees, noting that some retailers and brands think sustainability will sell itself because there will always be people willing to pay more for these products. “I don’t think that’s true because sustainability is something people care about when it’s woven into other aspects of the brand,” she says. “Otherwise, [grocers and brands] are attracting a niche audience and it’s got so much more potential than that.”
What grocers are doing right
In staying ahead of the curve in sustainability practices, grocers like Ontario-based Goodness Me! have made concerted efforts to ban plastic bags in their stores well before government regulations against plastics kicked in. “We were offering earth-friendly, compostable bags to our customers years and years back, and we’ve always offered eco-friendly solutions for food storage,” says head merchant Kathleen Carroll. In the organic bulk food section, customers are encouraged to bring in their own reusable food storage containers and the weight of each carrier is deducted at cash. “We have bamboo-made bento boxes for lunch and larger food storage solutions, too.”
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A new initiative across its 10 stores and on social media this year is a push to educate people around sustainable living practices. “Anyone new to sustainable living can come to us to get that content,” says Carroll. “Our staff is living this life and talking to customers, so what differentiates us is having roots in this education already.”
When it comes to sustainability initiatives, Longo’s is making good on a series of commitments to reduce greenhouse gas emissions, reduce food waste and source responsibly. The grocer eliminated the use of single-use plastic bags from all its stores by the end of 2022 and established a recycling program for all waxed cardboard and plastic case wraps to divert from landfill. (One of its sustainability goals is to divert 90% of waste from landfills by 2025.) It also partnered with a global organization called Too Good To Go, a service with a mobile application that connects customers to stores with surplus, unsold food at a discount. At Longo’s, customers can purchase a bakery or prepared food bag at a fraction of its original price. “We noticed huge, huge interest among our guests for this program, and in 2022, 20,000 meals were saved using the app,” says Sara Olivieri, Longo’s sustainability specialist. “Guests still want to get that Longo’s quality product and it’s coming at a really great value.”
The grocery chain is also on track to meet its goal of having 100% of stores using refrigerants with a lower global warming potential or a natural refrigerant by 2030, which coincides with its targets for reducing greenhouse gas emissions by 55% by the same year. In addition, Longo’s has made it a priority to source locally, and was the first retailer in North America to offer fairtrade bananas exclusively across its stores.
Olivieri says shoppers are made aware of all these initiatives through the company’s annual sustainability report, which is posted on Longo’s website and through its newsletter and social media. “We’re working toward the highest standards out there in the grocery industry when it comes to corporate sustainability,” she says. “We continually seek feedback from our guests to understand their needs and ensure we are meeting – and exceeding – their expectations.”
This article first appeared in Canadian Grocer’s August 2023 issue.
