{"id":92613,"date":"2024-07-10T09:07:54","date_gmt":"2024-07-10T07:07:54","guid":{"rendered":"https:\/\/www.bioecoactual.com\/?p=92613"},"modified":"2024-08-19T20:03:24","modified_gmt":"2024-08-19T18:03:24","slug":"retailer-organic-collaborations-powerful-driver-of-change-change-the-narrative","status":"publish","type":"post","link":"https:\/\/www.bioecoactual.com\/en\/2024\/07\/10\/retailer-organic-collaborations-powerful-driver-of-change-change-the-narrative\/","title":{"rendered":"Retailer-organic collaborations can be a powerful driver of change, allowing consumers to change the narrative"},"content":{"rendered":"

Creative collaborations between organic actors and leading retailers can be a powerful driver of change \u2013 and send a strong message to politicians and policy makers<\/strong>. A major new report on the state of European grocery retail by global management consultancy McKinsey shows that consumer \u2018downtrading\u2019 eased in 2023, and that shoppers are set to increase spending on healthy, organic and sustainable options in 2024. The report also predicts that Europe\u2019s leading supermarkets will accelerate sustainability initiatives this year, as the window of opportunity to meet ambitious 2025 climate targets closes quickly.
\n<\/p>\n

\"Retailer
123RFLimited\u00a9thebigland<\/figcaption><\/figure>\n

McKinsey believes these health and sustainability drivers could improve financial outcomes for retailers by boosting sales at the checkout and cutting energy and operational costs. But are the CEOs of these companies listening, and what insights can we glean when we drill down into the detail of report?<\/p>\n

Downtrading eases, health spend stays strong<\/h2>\n

McKinsey\u2019s report offers a mixed picture when it comes to organic, sustainable and healthy food trends. Although shoppers in most European countries are less focussed on saving money in 2024 than they were in 2023, consumer intentions are often polarised. While high-income households are increasing their basket spend and buying more high-quality and organic products, downtrading (switching from expensive brands to cheaper alternatives) still remains prevalent across low-income households.<\/p>\n

Similarly, while younger consumers (Generation Z and millennials) \u201csignal a high intent\u201d to buy more environmentally friendly products in 2024, the total share of consumers who want to buy products that are more sustainable in the next 12 months decreased by one percentage point from 2023.<\/p>\n

Consumers prioritize personal health<\/h3>\n

McKinsey notes that health and longevity is the only premiumization<\/strong> trend that has not been negatively affected by inflation, and has in fact remained constantly high throughout Europe\u2019s cost of living crisis. It\u2019s a trend that looks set to continue, with consumers telling McKinsey\u2019s pollsters that they are prioritising products perceived as \u201cgood for myself\u201d over those that are \u201cgood for the planet.\u201d Functional food claims such as \u201cboosting energy\u201d and \u201csupporting health\u201d are also gaining traction, the report notes.<\/p>\n

Drilling down into detail, the report confirms that the focus on healthy eating is now a resilient trend and that the percentage of people prepared to pay more for healthier products is growing (+5% in 2024). Intriguing national differences in consumer priorities are identified too. For example, buying products from local producers is a clear priority for Spanish shoppers but far less so for UK consumers.<\/p>\n

While organic was the sustainability category hit hardest in 2022 and 2023, it is the one showing the strongest bounce-back in 2024, with consumers in all of the countries surveyed stating their intention to buy more this year (+14% in Germany and +9% in Poland, most strikingly).<\/p>\n

Regenerative \u2013 the \u2018new organic\u2019?<\/h4>\n

McKinsey suggests that regenerative agriculture \u201ccould become the new organic\u201d, and may help retailers deliver on their net-zero ambitions. It predicts that the regenerative label will start to appear more widely on a growing range of food products. This could be a challenge for the organic sector, which has been increasing its efforts to differentiate organic\u2019s legally defined and independently certified system from regenerative approaches, which currently lack an agreed definition or standard. There are real concerns that \u2018regen ag\u2019 is becoming a significant distraction in efforts to transition to more sustainable agricultural practices, and a way to preserve \u2018business as usual\u2019 for agri-business and chemical companies.<\/p>\n

While organic was the most affected sustainability category in 2022 and 2023, it is the one showing the strongest recovery in 2024<\/p><\/blockquote>\n

More positively, McKinsey believes Europe\u2019s major retailers are finally getting serious about their Scope 3 carbon emissions, which involves measuring and taking responsibility for embedded carbon across the whole value chain, including primary growing and production. This could start to advantage organic and other agroecological approaches with lower carbon impacts in a significant way.<\/p>\n

Commenting on McKinsey\u2019s findings, Lee Holdstock<\/strong>, senior business and trade manager at UK organic certifier the Soil Association<\/strong>, told Bio Eco Actual: \u201cIt\u2019s disappointing to see interest in sustainability is predominantly maintained by younger consumers, but great to see increased interest in quality and stable interest in health more generally. These are broader drivers for organic \u2013 the former, especially for older consumers with more spending power\u201d.<\/p>\n

Supermarkets get serious about organic<\/h3>\n

Holdstock is optimistic about organic\u2019s future prospects as inflationary pressures subside, citing latest data from analysts at NiQ showing UK organics back in growth in both value and volume terms. And it is notable that retailers are again showing more organised support for organic. This Spring, Marks & Spencer (M&S) announced that it would be rolling out organic \u2018blocking\u2019, merchandising organic chilled and ambient lines together in 90 stores, giving organic more visibility. ‘Big Four’ supermarket Sainsbury\u2019s has recently placed around 140 organic products – spanning dairy, fresh produce and grocery – into its Nectar discount promotion, with substantial numbers of products now selling at below the price of conventional equivalents. Waitrose has also been rolling back the prices of its Duchy Organics range (founded, and previously owned, by King Charles’s Prince’s Trust).<\/p>\n

\"Retailer
123RFLimited\u00a9andreypopov<\/figcaption><\/figure>\n

In April, at this year\u2019s NOPEX event in London, the founder of pioneering retailer Planet Organic, Ren\u00e9e Elliott, gave a rousing speech in which she said she would be reinstating organic at the centre of Planet\u2019s offer, after she recently bought back the business. The performance of UK independent natural food retailers, who saw their organic sales grow by 10% in 2023, is also sending a very positive signal.<\/p>\n

Encouragingly, retailer initiatives across Europe are helping to rebuild organic markets and position them for future growth.<\/p>\n

Dutch retailers turned out in force at an \u2018Organic in Supermarkets\u2019 event held in April. Leading actors such as Albert Heijn, PLUS Retail, Lidl Nederland, ALDI Nederland and Nettorama were all in attendance, with PLUS announcing ambitious plans to double organic sales by 2025.<\/p>\n

Thanking \u2018eco heroes\u2019<\/h4>\n

Meanwhile, creative collaborations between Swedish organic actors and retailers, are helping to return organics to growth after a recent slump. Examples include premium supermarket chain Hemk\u00f6p (200 stores nationally), which is now offering its club members double points on all organic and KRAV-labelled food products. Hemk\u00f6p, already a strong performer in organics, has set itself a target of 10% of its total food sales to consist of organic and KRAV-labelled products by 2025. Another campaign, launched by Organic Sweden<\/strong> in partnership with prominent retailers and brands thanks shoppers at the point of sale for being \u2018Eco Heroes\u2019 when they choose organic. Part of Organic Sweden’s \u2018nudging’ campaign, which started in 2022, it involves a close collaboration with leading Swedish supermarket ICA Sweden and five different food companies. The scheme has seen a significant uptick in organic food sales for both branded products and fresh produce.<\/p>\n

There are a growing number of strategic collaborations between European retailers and organic groups that are helping to drive engagement with organic. When they are proven to work, demonstrating robust consumer demand for organic, confidence grows within the wider retail community that organic expansion can be profitable as well as socially and ethically desirable.<\/p>\n

When these initiatives are coupled with progressive pricing \u2013 for example Penny\u2019s \u2018true cost\u2019 trial in Germany, or Lidl Austria\u2019s \u201cequality on a plate\u201d, where its vegan range was price-equalized with meat and dairy products \u2013 these effects are further amplified.<\/p>\n

Powerful drivers<\/h4>\n

With senior European politicians currently accused of backsliding on flagship EU sustainability policies \u2013 on pesticide reduction, novel GMOs and climate emissions reduction \u2013 organic industry collaborations with retailers aimed at expanding organic food availability can deliver a powerful counter-narrative.<\/p>\n

Recent polls have shown that consumer support for climate action and sustainable food policy is often much stronger than politicians want to acknowledge. When consumers are given the opportunity to \u2018vote\u2019 at the checkout, they get to set their own agenda for positive change<\/strong>.<\/p>\n

Author:<\/strong>\u00a0Jim Manson, Journalist<\/p>\n

Subscribe<\/a>\u00a0to Bio Eco Actual Newsletter and be up to date with the latest news from the Organic Sector<\/strong><\/p>\n

Bio Eco Actual<\/strong>, International Organic Newspaper
\n<\/em>Read Bio Eco Actual<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

Creative collaborations between organic actors and leading retailers can be a powerful driver of change – and send a strong message to politicians and policy makers. A major new report on the state of European grocery retail by global management consultancy McKinsey shows that consumer ‘downtrading’ eased in 2023, and that shoppers are set to […]<\/p>\n","protected":false},"author":419,"featured_media":92606,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[8352,8357,5210],"tags":[],"class_list":["post-92613","post","type-post","status-publish","format-standard","has-post-thumbnail","category-european-organic-markets","category-industry-news","category-latest-organic-news"],"yoast_head":"\nRetailer-organic collaborations can be a powerful driver of change, allowing consumers to change the narrative - Bio Eco Actual<\/title>\n<meta name=\"description\" content=\"Creative collaborations between organic actors and leading retailers can be a powerful driver of change \u2013 and send a strong\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, 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