What Shoppers Want: The Trend Toward Sustainable Grocery
If you're following consumer retail trends, you know that one of the biggest buzzwords of 2019 is sustainability. Which begs the question: what exactly does sustainable mean?
"Sustainability" contains multitudes, from responsible sourcing to how you package potatoes, and its complexity only increases as grocery goes digital. And if you think only a handful of consumers want sustainability, think again. Across the board, experts anticipate the demand for eco-friendly practices to grow; a 2019 Nielsen report predicts that shoppers will spend up to $150 billion on sustainable products by 2021.
Sustainable business practices have the power to attract customers, drive profit, and impact every level of grocery, from food storage to resource management. It's worth noting that the concept doesn't just mean eco-friendly; it also means financially tenable for your business. This can be a difficult balance to find, as green technology often comes with a high price tag. But by taking the long view in your move toward sustainability, you'll not only cut costs on your energy bill, you'll also increase your customer loyalty – and of course, help save the world.
Let's break down some of the many and unexpected ways that sustainability plays a role in your grocery business.
One of the most visible forms of energy consumption is the fridges and freezers keeping your perishables safe – so it's no surprise that refrigeration is one of the highest energy-consumption systems in grocery. Retailers and tech innovators have been developing eco-friendly refrigeration systems for years now, and the results are finally becoming mainstream. Ahold Delhaize, one of the world's largest supermarket chains, recently announced that its regional company Food Lion is committed to reducing its environmental impact via zero-ODP and low-GWP (ozone-depleting potential and global-warming potential) refrigerants, retrofitting such technology into its older systems. Other companies are following suit, adopting cutting-edge technology that promises to lower electric bills along with harmful emissions.
Walk through the produce section of your average supermarket, and chances are you'll see as much plastic as food. Sure, it's recyclable. But according to the Ellen MacArthur Foundation, about 40% of it winds up in landfills, with only 14% getting recycled. But despite that behavior, surveys show that consumers – especially millennials – are increasingly disdainful of packaging.
So how can grocers package, display, protect, and inventory their produce? As usual, businesses are quick to experiment with solutions. Zero-waste and package-free stores have popped up around Europe and the U.S., to varying degrees of success. Traditional grocers have experimented with selling "loose" produce and eliminating disposable shopping bags at check-out. Others, including the trailblazing Trader Joe's, are investing in alternatives to plastic like fiber till, a cardboard-like material that's both compostable and biodegradable.
Packaging pains are one thing in the store, and another when it comes to home delivery. Food ordered online must be packaged safely, efficiently, and able to withstand extreme weather, which introduces another level of difficulty and cost. The search for green shipping materials lives on, as grocers and tech companies alike strive to develop eco-friendly packaging solutions.
Perhaps the most driving demand of all is that for ethical sourcing. With millennials now the largest group of spenders, social responsibility has become a hot ticket, particularly in fresh food such as produce, dairy, meat, and seafood. Gone is the reign of cheap prices in retail; today, shoppers want to know where their food has come from, and that it's been produced ethically. And they've demonstrated that they're willing to pay more for locally and/or sustainably sourced goods.
While other aspects of sustainability may pose sticky dilemmas, the question of sourcing is clear. Source your goods responsibly, make sure your customers know it, and your bottom line will thank you.
Sales Predictions and Food Waste.
Of course, sustainability also crops up in less visible ways, such as resource management. Food waste is a major problem in grocery today, costing the industry about $18 billion a year. Some analysts report that as much as 40% of food goes to landfills. With numbers that large, it's vital that grocers take steps to lessen waste, and one way they can do that is through accurate sales predictions. By implementing best practices in your supply chain management, thereby limiting the amount of perishable food thrown away, your business can be a part of the food waste solution.
It surprises many people that eCommerce has the potential to be more eco-friendly than traditional commerce. How? With optimized delivery routes and extended shipping times (i.e., not same- or one-day shipping), retailers can reduce the number of vehicles on the road, thus reducing carbon emissions.
But of course, there's more to the story. According to Josue Velazquez, director of the Sustainable Logistics Initiative at MIT, eCommerce is only green when retailers and customers sacrifice fast shipping. With same- or one-day delivery, a retailer often sends out a slew of half-empty trucks in order to deliver on time. MIT research says that choosing fast shipping increases a customer's carbon footprint by 25%.
So which should a grocer offer: convenience or sustainability?
There's no easy answer. Velazquez recommends that e-tailers present their customers with the facts, and let them choose. Some companies offer incentives for shoppers to opt for slower shipping, such as store credit or coupons. When it comes to sustainable shipping practices, businesses must take into account their own capabilities, resources, and target market to come up with a workable solution.
How to market yourself as a sustainable business
While many aspects of sustainable grocery pose complicated challenges, there are basic actions you can take to move toward eco-friendly practices – and, just as importantly, market yourself accordingly. Here are three steps toward profitable sustainability:
Stay on top of current trends and tech developments. Food retail is a fast-paced industry, with new technology emerging every month – much of it designed to help you go green. This is true not only in physical matters like refrigeration, but also in eCommerce. For instance, some software systems help customers shop according to personal preferences and recipes, thus reducing food waste. By staying alert to new trends and opportunities, you can seek out new practices that will benefit you, your shoppers, and the planet the most.
Be transparent with your customers. Make sure they know that you're working toward a more sustainable model. For instance, if you don't offer one- or same-day shipping, frame that choice in a values-based way – i.e., tell customers that that kind of shipping is unsustainable. This will help them make informed choices, while showing that you're paying attention to their needs.
Make your message loud and clear. Whatever choices you make around sustainability, make sure your shoppers know. Use signs, ads, blogs, flyers, banners, and other ad space to communicate to your customers that your business cares about the environment. Never assume that customers will understand your choices or make the connection on their own. By using sustainability in your marketing, you'll reframe your brand's image to be responsible and desirable, as more and more customers shop according to their values, not just their wallets.
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