- The eco-friendliness of some products have driven sales for various food and beverage segments in recent years, particularly organic and local products, according to a new Euromonitor report.
- Organic packaged foods boosted its market share from 1.2% in 2009 to 1.4% in 2014. This is due primarily to food scares in China and other places. That growth is expected to stagnate in the new few years because of the relative size and growth of non-organic packaged foods.
- Consumers tightened their wallets when the recession hit, causing them to seek out more specific and appropriate eco-friendly attributes. Those included products that don't have far to travel, are raised without pesticides (though not necessarily certified organic) and from companies that promote better animal welfare standards, like free-range meat and eggs.
Factors like quality, price, availability and recommendations from family and friends continue to be stronger drivers of consumers' purchase decisions. But green and eco-friendly attributes beat out other purchase factors in the report, such as a strong brand name, packaging or whether the brand supports the local community.
Manufacturers recognize the importance of eco-friendly products and operations, and supply chain sustainability has become a clear focus for many companies in their corporate responsibility reports. Besides boosting a brand's reputation among consumers, sustainability efforts can also drive profitability for companies, such as energy efficiency, water conservation and reducing food waste.
Consumers typically hold organic products as the target for optimum eco-friendliness. Though Euromonitor found a potential stagnation, other reports have demonstrated record sales growth for organic products, according to the Organic Trade Association's 2016 Organic Industry Survey. That report estimates that organic products comprise 5% of the food supply, though that also includes organic produce and dairy, while Euromonitor only considers packaged foods.
These record sales have actually dealt manufacturers a challenge in addressing supply and demand issues for certified organic ingredients. Luckily, the pool of U.S. certified organic producers rose by almost 12% to 21,781 operations last year, according to the USDA. That's a continuation of this segment's double-digit annual growth, the agency found.