Why should grocery retailers invest in sustainability now?
With the spread of the healthy-lifestyle and conscious consumption trends, the demand for affordable organic products and a vegan variety of items has increased. Therewith the enquiry for sustainably produced products has also elevated.
Retail giants like Tesco, Aldi and Carrefour are already providing first answers to the rising consumer request. Sustainability programmes are being launched, the assortment of plant-based products is getting wider and wider and efforts towards a more transparent labelling of products are being made.
“Aldi has a responsibility to protect the environment and we know it’s an important priority for our customers,” said Jason Hart, CEO, Aldi U.S.
In response to the rise in conscious consumerism grocery retailers should see it as their task to make it easier for their customer to identify products which meet their needs.
We, at FRC, have pointed out the three most important areas where changes are going to be necessary, if a business nowadays wants to stay competitive. Namely: product labelling, the variety of plant based-products and sustainability-driven initiatives, particularly regarding waste management and energy use.
Hereafter some of the most important developments in these sectors:
Transparent Product Labelling
The Nutri-Score is a system, devised in France, which is quickly gaining popularity all over Europe. It is a useful tool which helps the consumer to recognise the nutritional value of processed food at first glance.
REWE, for example, has already denoted all of their private label products, using the Nutri-Score. ALDI Nord & Süd have also started labelling goods.
Carrefour has additionally launched an application that calculates a nutritional score based on personal dietary preferences and health criteria.
In the European commission it’s being discussed, if the Nutri-Score should be compulsory in the future.
The Eco-Score is another classification system, originated in France, which evaluates the environmental impact of food products. The scoring system considers the pollution caused throughout the entire value-added chain, bearing in mind land use, water use, acidification, particulate matter and other factors.
It has yet not been introduced as a front-of-pack labelling on many products but there are various crowdsourced online databases, like “Open Food Facts” and “Yuka” where the customer can scan the bar-code of the item and view, among other things, the eco-score of already assessed products.
Colruyt Group, in Belgium, has recently launched their own application for this purpose and is planning to soon denote the packaging of own-brand products with the Eco-Score.Lidl is also planning to test the Eco-Score in one of their shops in Berlin.
The Swiss retail giant Migros has a similar approach. They have added a sustainability scale on private-label products in order to create more transparency.
Increasing plant-based product range
The number of plant-based products in the supermarket shelves is seemingly raising every day as many chains and labels have realized the potential of this market.
Tesco has announced “to increase sales of plant-based meat alternatives by 300% by 2025, in line with Tesco’s ambition to put affordable, healthy and sustainable food within reach of everyone” – as a part of their commitments to support healthy and sustainable diets. These also include making products healthier through reformulation and “increasing in sales of healthy products, as a proportion of total sales, to 65% by 2025”. The current figures state that 58% of the sold goods can be classified as healthy.
Aldi Süd has even teamed up with a vegan Social-Media-Influencer, in order to reach out to a younger target group and promote their assortment of plant-based products.
Another movement is the “Veganuary”-campaign, which provides support for people who want to participate in trying out a vegan diet as a New Year’s resolution for one month.
The number of actively participating people, all over the world, is growing exponentially every year. In 2021 more than half a million people have officially registered for the “Veganuary”.
Aldi Nord and Süd even dedicated the “Veganuary” a specific advertisement campaign.
PepsiCo and Beyond Meat have formed The PLANeT Partnership, a joint venture to develop, produce and market innovative snacks and beverages
made from plant-based protein.
Many big grocery retailers, like the earlier mentioned plan from Tesco, have announced modifications which they want to conduct, in order to contribute to a more sustainable commerce.
Carrefour France and TerraCycle have partnered up, in order to provide recycling stations for cosmetics packaging in hypermarkets.
AS Watson group, based in Hong Kong, but operating worldwide, recently announced its 2030 Sustainability Vision which includes alterations in four fields, namely reducing energy use, greenhouse gas emissions and plastic use. The fourth field, the retailer is working on, is community. The plan is to establish green classrooms, in order to raise awareness and to create open collaboration by providing sustainable product choices to customers.
In 2020 Schwarz Group published their first sustainability report which discloses key figures regarding energy use, waste management and staff/social diversity. It becomes obvious that efforts towards the usage of renewable energy and a circular economy are being made, with numbers illustrating the changes, which have been already implemented throughout 2018-2019. The energy consumption per employee, for example, has reduced from 23 MWh to 22,9MWh. In the future they want keep reducing the energy consumption by enhancing their logistic system. Furthermore, they have started the “Lidl Soya-Initiative”, which is supporting a sustainable global soya production by working together with non-profit organizations and national subsidiaries.
Looking at the developments in the three main sectors we have listed, it clearly points out that there is no way other than being part of the sustainability movement, if a business wants to stay competitive. This applies for every kind of business, which doesn’t want to become obsolete – from primary producer to retailer.
Sustainability is not just a trend – it’s the future!
It is crucial to start planning now, as these kinds of transitions need time in order to get implemented. We at Foley Retail Consulting can support grocery retailers fulfilling contemporary sustainability demands. We know that every business is different. That’s why we offer customised consultations. Contact us for more information!