What issues is Conscious Consumers trying to address?

From free-range meat to vegan
haircare, demand for sustainable
goods is rising
In a busy north London supermarket the weekend before Christmas, the meat aisle is a hubbub. Sarah Rymer, 32, picks her way through
a shelf of whole chickens. She chooses a freerange bird. ‘I’ve definitely become more conscious of what I buy in the past few years,’ she
says. ‘It can be confusing, but I think it’s worth
the money.’ Ms Rymer is one of an increasing
number of shoppers driving the UK’s £81.3bn
market for ethical products and services.
According to not-for-profit consultancy Ethical Consumer, the sector has grown by more
than £40bn since 2008, with households spending an average of £1,263 on ethical goods last
year. The ethical food and drink market alone
was up 9.7 per cent, compared with 5.3 per cent growth
in 2015. Businesses are seeing the appeal. For Thanksgiving this year Butterball, the US’s largest turkey producer, launched its first organic range in response to
increasing consumer demand, while earlier in the year
UK sandwich chain Pret A Manger opened its second
and third all-vegetarian outlets. Ikea, which says that
it uses its sustainable credentials to set it apart from
other affordable homeware brands, intends to use only
recycled or FSC certified wood by 2020. Big consumer
product groups are making concerted efforts, too.
French cosmetics company L’Oréal this month
unveiled its first vegan hair colour products, aimed
at boosting its flagging professional haircare division.
As part of a steady strategy of smaller acquisitions,
Unilever bought Sir Kensington, a maker of vegan
mayonnaise, and Pukka organic teas. Its sustainable
brands – those the company describes as ‘combin[ing]
a strong purpose delivering a social or environmental
benefit’ – grew 40 per cent faster than the rest of the
business in 2016, it says.
‘The purpose of marketing is to contribute to maximising shareholder value,
and marketing strategies must be evaluated in terms of how much value they
create for investors.’
Peter Doyle (2008)
MARKET-LED STRATEGIC
MANAGEMENT
CHAPTER 1
With consumers showing increasing concern for animal welfare, demand
has risen for free-range poultry
Source: Jamie McDonald / Staff/Getty Images.
Younger consumers drive shift to ethical products
By Alice Hancock in London
INTRODUCTION 5
Introduction
In the quote that begins this chapter, Professor Peter Doyle highlights that the primary overarching goal for chief executives of commercial companies is to maximise shareholder value.
However, is this at odds with the increasing awareness of, and attention to, environmental
and social responsibility issues? Surely firms seeking to maximise shareholder value will pay
scant regard to the natural and social environment in which they operate, taking what they
can, irrespective of the consequences, in order to make a quick buck? Isn’t this the essence
of market-based capitalism – red in tooth and claw?
Wrong! The essence of the shareholder value approach is the long-term sustainability
of the organisation through the creation of lasting value. Indeed, Doyle also argues that
shareholder value is often confused with maximising profits. Maximising profitability is
generally considered to be a short-term approach (and may result in eroding long-term
competitiveness through actions such as cost cutting and shedding assets, to produce quick
improvements in earnings). Maximising shareholder value, on the other hand, requires
long-term thinking, the identification of changing opportunities and investment in the
building of competitive advantage.
Younger consumers are fuelling this response.
YouGov data show that in the past year alone the
proportion of 18- to 24-year-olds turning to vegetarianism for environmental or welfare reasons
has increased from 9 to 19 per cent. And it is not
just in their consumer habits. ‘We know that millennials want to work for companies that take
this stuff seriously,’ says Rob Harrison, director of Ethical Consumer. ‘Lots of new start-ups
have an ethical mission and it translates across
into buying patterns.’ He is speaking to me on
his Fairphone, marketed as ‘the world’s first ethical, modular smartphone’. Ben Gleisner is the
founder of one such ethically minded start-up. In
2009, while working as an economist in the New
Zealand treasury, he identified what he calls a
‘massive market failure’: businesses, unaware
that customers were interested in ethical products did not invest in them, resulting in a ‘huge
undersupply’. Conscious Consumers, the platform
he has set up, provides retailers with data about
customers’ ethical preferences. Shoppers sign up
online and link their credit or debit card to the
app. Whenever they spend money at businesses
registered with Conscious Consumers, data
entered on their profile – from whether they would
prioritise buying organic to whether they are
interested in climate change or workers welfare –
is sent to the retailer. In 2015 Mr Gleisner and his
team ran New Zealand’s second-biggest crowdfunding campaign and in autumn next year it plans to
launch in its first foreign market: the UK. Richard
Collier-Keywood, previously managing partner
of PwC UK, has come on board as a director. Mr
Gleisner says that 16- to 35-year-olds – Generations
Y and Z – are the strongest market. ‘Generation Z
is the most environmentally and socially “aware”
consumer market yet. Even more so than millennials,’ he says. The sticking point is cost. At higherend supermarket Waitrose, where Ms Rymer is
shopping, an Essential range chicken is £2.40 per kg
while a free-range bird is £6.25 per kg – more than
double the price. Josie Mallin, 27, who is shopping
for a Sunday joint in the more affordable Morrisons
supermarket nearby, chooses a standard chicken. ‘I
try to buy ethically but say a normal chicken is £4
and an organic chicken is £10, I’m going to buy the
normal one,’ she says.
Source : from ‘Younger consumers drive shift to ethical products’, Financial Times , 23/12/17 (Hancock, A.).
Discussion questions
1 What issues is Conscious Consumers trying to address?
2 How is the company trying to address them?