Are Consumers Really Buying More Ethical Products?

It’s easy for a CSR professional and full-time ethical consumer (isn’t that an oxymoron?)  to get excited when a another credible study unleashes tantalising phrases including:

Purpose is the 5th ‘P’ of marketing‘ and

86% of global consumers believes that business needs to place at least equal weight on society’s interests as on business interests‘.

I want more than anything for Edelman’s 2010 Good Purpose Study to be genuinely representative of mainstream consumers but my gut feeling is that it probably falls on the optimistic side of the fence.

Ok, over 7000 consumers in 13 countries is a decent sample size, better than those of the 100 or so sized sample groups accompanying UK cosmetics TV commercial claims anyway, but I’d love to know more about the methodology before getting carried away quite yet. There has been a steady stream of similar information on consumer expectation and spending behaviour including this interesting recent report from Co-operative Financial Services and in other similarly themed reports, all despite the economic crisis harbingers of ethical doom.

Like the CSR agenda itself, the practical evidence of ethical consumerism is sometimes less tangible than we require to convince an as yet still sceptical mainstream audience, as they are both still immature concepts when it comes to precise measurement. We assume they are impacting because many feel, or want, it to be so. Either way the wisdom of crowds if often close to the money.

To offer some counterpoint here I remember one of Timberland’s Stakeholder Engagement Call where I had to agree with the quote by David Labistour, CEO of Mountain Equipment Co-op, when he replied to my question, that  ‘the consumer is the weak link in the whole thing (sustainability)’.

Without getting into a debate around semantics here I believe both sides of these messages ring true. Mainstream consumers are definitely increasingly knowledgeable and are exercising their associated opinions through their spending more than ever, and there is also a growing hardcore ethical consumer demographic. Maybe the mixed messages are the result of the impatience of those surrounded by ethical and environmental sustainability issues on a daily basis either as professionals or impassioned consumers.

There is an overlooked added benefit to this growing ethical demand. This movement could suggest new opportunities for smaller businesses to exploit this growing demand for ethical products by offering locally sourced, less industrialised, hand crafted, organic, eco-friendly, Fairtrade niche products that the inflexible corporate world will struggle to deliver. Could we be about to see a tipping point where ethical consumerism steers greater demand to a more sustainable smaller business production marketplace?

Are you an ethical consumer? Is the mainstream market really heading down the ethical avenue?

 

… and don’t forget to buy ethical for Christmas!

 

13 thoughts on “Are Consumers Really Buying More Ethical Products?

  1. Gareth Kane

    I suppose it comes down to what you mean by “ethical”. Big brands like Cadbury’s and Starbucks going FairTrade are seriously boosting the ethical market but in the opinion of some devaluing the ‘ethical glow’ that comes from buying say Green & Blacks or CafeDirect.
    I would also argue that mainstream brands are being held to higher standards by the mainstream media. If a highstreet retailer is found to be selling sweatshop produced garments it will hit the headlines. But we don’t think of the garments which aren’t as ethical per se.
    The bar is rising!

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  2. robin

    ‘consumers’ is a pejorative term and serves us little purpose. unbridled consumption is leading us to the wrong place – a dead end. people who choose ‘ethical’ products and produce from businesses and brands are actively participating in a transformational culture as investors. making a conscious decision to promote the growth of a new way of thinking that values people and planet. increasing awareness of supply chain issues and the push to the floor approach to traditional business dynamics leaves any rational person thinking that somewhere we lost the plot. i worked with cafedirect from 1992 to 2006 when Millward Brown commissioned a poll of the UKs favourite brands – factoring in loyalty and the willingness to recommend to friends. Cafedirect was No1. Purpose works, purpose with passion works better.

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  3. Mark Wakeling

    Is the mainstream market really heading down the ethical avenue?

    I think the danger is that the term “ethical” is used so broadly already ranging from companies committing to the basics of no child & slave labour through to social enterprises which measure success through their social and financial goals.

    Businesses within the mainstream market that measure success purely through their finances on the balance sheet are likely to try and redefine ethical consumerism and throw a huge marketing budget to win the public over.

    Whilst I’d love to see true ethical consumption going mainstream I can’t help but think the power dynamics involved will always surface and those who should be profiting will miss out.

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  4. Juan Villamayor

    I agree that there is a strong connection between ethical consumption and the power of small businesses. Smaller companies are best positioned to offer ethical products with a lower footprint, for example. The rise of ethical consumption will benefit smaller companies more than it will do bigger corporations. Now there is a chance for SME’s to grow.
    The question is, where are the ethical consumers? I have the feeling that ethical consumption and business responsibility are two faces of the same coin, one cannot happen without the other. Give customers all the information about your product and/or service and they will be able to behave in an ethical way, I am sure. Once you have choice, you choose the ethical way. Wishful thinking?

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  5. Company2Keep Inc.

    Frankly, I think the awareness level continues to climb. Consumers are genuinely more curious and they are asking more questions, the right questions. There is no turning back on this one. We may not be there yet, but we are heading in the right direction. Thanks for taking the time to write about this today.

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  6. James Farrar

    I have 2 points that maybe contradictory:

    1. I worry about ‘ethical’ as a market segment. In order to be sucessful in its category it relies on differentiation against the bulk of the market. Therefore ethical is a niche and is only successfu;l for thr few because the most ar not.

    2. In terms of selling ethical as a mainstream quality attribute that customers will rank and pay for — I must say I’m getting a little tired of marketeers blaming the consumer. I think we can all agree that sustainability is a huge latent market need and any self respecting marketeer should be salivating to crack. For those that are blaming the consumer I say: try harder.

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    1. Kally Peigne

      Regarding the first point, in economic theory, markets always start off niche, steadily increase in profitability as competition is limited and awareness grows. In time the market matures; increase in competition driving down prices and products and services becoming more mainstream. One would hope that this is the case here.

      Regarding the second point, consumer demand is always the driver for businesses – ask any entrepreneur. Government regulation can also have a huge effect as a catalyst in new market development, and indeed in consumer demand. However, I agree that this is an excellent time for small business for whom differentiation is their lifeblood, to come out and offer something different and hopefully ride on the crest of this fantastic wave.

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      1. davidcoethica Post author

        Thanks for your comment Kally.

        I certainly hope these trends continue, and the signs are promising. I feel that many of the arguments of the proponents of ethical and sustainable are getting stronger every day and therefore reinforcing mainstream understanding. It’s slow but at least we are seeing tangible progress.

        Consumer demand is the key, and links back to my last point. The challenge is how to educate and by whom? It’s not just the suppliers (business) responsibility but society as whole. If businesses push consumers too far they stop buying with them and potential go to a less responsible supplier. I will always support those businesses that are trying to educate and challenge. It’s those that aren’t trying that need educating. This is why I think small businesses can play a vital role as they are much closer to their stakeholders than corporates. This closer relationship engenders trust and therefore a more robust vehicle for raising awareness.

        David

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  7. Bernie

    the questions for me:
    is being ethical enough for a corporation and its products? The CSR agenda is much more than ethics, by the way, what means being ethical? having ethical products automatically means the company is a good corporate citizen? How do we measure ethics and when is a product ethical and social responsible? I like the idea that small businesses are good positioned in this ethical battle. To me the big question arises, how these small copmanies are measure and report on those issues without having a whole bunch of marketeers or big CSR departments taking care on GRI G3 and ISO 14000 guidelines producing more than 100 pages of CSR reports?

    I think most of those companies doing a strategic planning process at top of their organizations with tools such as the BSC. Linking CSR and the BSC concept could be an easy way to plan, measure and report for small or even very small companies.

    I fully agree and hope that the “lable” sustainable produced products or services will once be THE usp for a lot of consumers.

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  8. Cindy

    Well David – you got this one stuck in my craw and I’ve been pondering “ethical consumerism” all evening. What I have come up with is that true “ethical consumerism” really equals “stop overconsumption”.

    The question we should be asking ourselves before each purchase, especially as we head into the holiday buying sprees, is not “is this green enough, organic enough, traded fair enough…?” but “Do I need it?”

    Within a five mile span from my house there is a Food Coop, a Whole Foods, a Trader Joe’s, a Big Y, a Stop & Shop, a Natural Food Market, plus a few others. There are two CVS stores under 1.5 miles from each other with a Walgreens in the middle. We have a Home Depot next to Lowe’s next to Target next to Walmart next to Barnes & Noble next to Borders! How is it possible that we NEED this much stuff?

    Even as brands espouse environmentalism and sustainability – their marketing messages push us to Buy More! Need this! Want that! And those of us in this CSR industry are not immune as attested to by the 10+ lbs of marketing brochures, books, gimmicks and swag offered up at a recent CSR/Sustainability conference. How many sustainability leaders have published books in just this past year to teach us how to reduce our environmental impact? Do we need to actually create new (RED) products in order to combat AIDS – a regular GAP t-shirt isn’t good enough? (Full disclosure: I own a GAP (RED) t-shirt and recently purchased a book on sustainability)

    My apologies as this turns into a rant….I understand that there is no easy answer and certainly no quick answer. I think your questions of where do small businesses fit into this picture are important ones – I think if we can encourage consumers to buy locally, buy smarter, support the small businesses – And encourage those businesses to create responsible products and practices – our purchases can become more thoughtful, more meaningful while at the same time assuaging our never ending need for “more stuff”. But I am sorry to say, I don’t feel we are anywhere close to “tipping” more in that direction – as a society, we are way, way far from giving up the convenience and instant gratification that we have become accustomed to. And therefore we may never achieve true “Ethical Consumerism”.

    Rant over. ☺

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  9. Junior

    Hello David, I have n question, how we can implement Ethical products on the market to low-income consumers? I believe people will make an option for the cheapre then how companies can implement ethinical products?

    Junior Ribeiro Fernandes

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