Health concerns driving shift to green food consumption
investments amid fears about the impact of climate change - but it
is health concerns that drive the shift towards more natural food
products, according to a new report from Mintel.
Mintel's Green Living report looks at the many areas where US consumers are trying to live more environmentally friendly, sustainable and equitable lives, and highlights the link between health concerns and a desire to eat food that is perceived as 'greener'. There is little new in this - Mintel notes that organic and natural foods are "the best-established segment of the 'green' marketplace" - but what is significant is that there are few signs of any slowdown in the growth in sales of such products. Sales of natural food and drink products at specialist stores in the US have risen steadily from around $11.9bn in 2001 to an estimated $19.6bn in 2008, Mintel says, as producers become ever more innovative in their new product development. 'Green' alcoholic beverages in particular are a new arena for growth - last year, for example, saw the introduction of what McCormick Distilling billed as "the world's first eco-luxury vodka," called 360 Vodka, which comes complete with compact fluorescent light bulb. Local wine is also growing in popularity on the back of criticism of the wine industry in general for its high carbon footprint, caused by the widespread use of heavy glass bottles and long-distance transport. Yet the health factor plays a less important role than caring for the environment when it comes to other 'green' products such as toiletries, cosmetics or household products - suggesting, Mintel says, that companies still need to do more to highlight the fact that living healthy lives is not simply about the food that consumers eat. The report also looks at some of the potential barriers to increased sales of 'green' products in the US, and notes that price and availability are the principle reasons why many Americans have not yet switched to greener products. "Limited penetration into mainstream retailers appears to be a major factor limiting the growth of many 'green' product sectors, because the vast majority of respondents are not willing to go out of their way to find 'green' products," the report notes "Only the most committed consumers are seeking out the 'green' product categories they can't find at their local stores. The rest of the 'green' consumer base will not buy those products until they appear in mainstream retail stores, or until the products are somehow brought to their attention - suggesting the need for an expansive free trial campaign." On price, meanwhile, Mintel's consumer research indicates that most consumers are unwilling to pay more than 10 per cent extra for 'green' products and services. "Price premiums on 'green' products prevent purchases for about half of our respondents, and particularly for women," Mintel says. "The majority of women would like to buy more 'green' products but are unwilling to pay the price premiums currently in effect. With women substantially more likely to be the primary shoppers for households, this points to a collapse in premium positioning in the near future." Mintel's research shows that 67 per cent of Americans would buy more organic food if it were less expensive, while more than half of them wish that a wider selection of organics were available where they shop. "To date, most 'green' products are clustered at the premium end of the price spectrum. These data suggest that there is a market for mid-range and possibly even budget-priced 'green' products," the report notes. One of the biggest barriers to further growth in 'green' products - food or otherwise - is consumer skepticism. Many consumers "worry that big companies may not strictly follow organic product guidelines, suggesting that consumers may be somewhat suspicious about the origins of organics", according to Mintel, "Those most committed to 'green' lifestyles also tend to be skeptical of the idea that one can support the environment through consumption. Real corporate commitment to improved environmental practices, along with better information and transparency regarding 'green' products and services, is the only way to turn these skeptical environmentalists into 'green' consumers. Companies that succeed in winning these consumers are likely to find them loyal and consistent 'green' customers," the report notes.