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Sustainability: No Longer an Option for Retailers

By Julia Gallo-TorresContributing Editor

Increasing concern about climate-related events has made consumers more aware of environmental issues. Their demand for climate-friendly products has pressured food manufacturers and now retailers to ramp up their sustainability game.

For retailers, sustainability is no longer an option. A Coca-Cola study showed 56% of GenZs and 45% of Millennials consider environmental sustainability most of the time they shop. Forward-thinking companies address consumers’ sustainability concerns to increase their loyalty:

  • GreenPrint’s 2021 Business of Sustainability Index showed 64% of Americans are willing to pay more for sustainable products. 78% are more likely to purchase a product that has an environmentally friendly claim.
  • 55% of respondents in a Cargill survey last year indicated they’d more likely purchase a packaged food item if it featured a sustainability claim. This was up four percentage points from 2019.
  • 37% of U.S. respondents in that survey said they’d more likely buy a packaged food if it had a sustainability claim.

These attitudes show environmental sustainability is quickly becoming the price of business, as consumers actively seek products with these claims. A myriad of food manufacturing companies have responded with labels such as Fairtrade, LEAF, Marine Stewardship Council, Rainforest Alliance, etc.

Grocery retailers, though slower than manufacturers to respond, also have been making strategic moves:

  • Earlier this year, Walmart reported it was investing in a $400 million funding round for Plenty, a vertical farming operation that will supply greens  to Walmart’s California-based stores. The move provides the giant retailer organic produce year-round.
  • Kroger is expanding its delivery services, testing all-electric autonomous cars provided by Nuro, as part of it’s Zero Hunger/Zero Waste social and environment impact plan. The cars help with its corporate goal of reducing its impact on climate.
  • Earlier this year, the EPA recognized supermarket retailer Sprouts, for its environmental program. The initiative helps keep a significant amount of food out of landfills, reducing methane emissions. Additionally, Sprouts has committed to reducing food loss and waste by 50% in their operations by 2030.

One hurdle that both manufacturers and retailers have to overcome is consumer trust in sustainability claims. This study also found an issue with trust, as little more than half (53%) of respondents indicated they never/only sometimes believe environmental claims. 45% said they’d need a third-party validation in order to trust the claims. Greenwashing has been in the news lately as some corporations have invested more heavily in PR than actual sustainability initiatives.

This is at least indicative of awareness of consumer sentiment regarding the issue. But manufacturers and retailers alike have no choice but address sustainability moving forward.

Julia Gallo-Torres is a market researcher who enjoys following consumer food trends. Previously, she held a variety of executive editor positions on food manufacturing and ingredient magazines. She regularly contributes to the site.

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