Sustainability will be top of mind for brands and consumers moving into 2023, along with increased transparency and due diligence in supply chains.
WASHINGTON – Dec. 13, 2022 – Fairtrade America – the world’s most recognized label for social justice and sustainability – today shared five key trends the organization expects will drive consumer choices and brand action in 2023.
Despite inflation and rising prices on products we use everyday, from gas to groceries, research shows that many consumers are still making thoughtful choices while shopping, choosing products that align with their values. As these consumers become increasingly interested in and informed about supply chains, sourcing and product sustainability, brands will need to invest in practices that drive loyalty among discerning consumers.
Fairtrade America points to five trends that will propel consumer behavior and brand priorities in 2023:
Consumers will change their diets to lower environmental impact.
According to a recent study by GlobeScan on behalf of the Marine Stewardship Council (MSC), 31% of U.S. consumers who have changed their diet have done so because of an environmental reason, with 11% saying they changed their diet specifically due to climate change. As people seek to lower their impact on the environment with everyday decisions, including the foods they eat, certifications from organizations like Fairtrade America, MSC and Non-GMO Project are making it easier to spot which products are made with the planet in mind.
Shoppers are increasingly understanding that certifications like Fairtrade include environmental requirements as well as social and economic. In fact, 77% of Fairtrade shoppers say the Fairtrade label makes it easy to decide if a product is ethically and responsibly produced. Fairtrade sets environmental Standards that aim to minimize producers’ impact on the planet, including banning the use of dangerous pesticides and GMO seeds, protecting natural resources and encouraging eco-friendly cultivation. Fairtrade also incentivizes organic farming through an increased Minimum Price paid to producer organizations.
Consumers, governments and organizations like Fairtrade are prioritizing a decrease in deforestation.
Since 2000, 10% of the world’s tree cover has been lost, with the world losing an area the size of London each week, according to the UN. A recent GlobeScan survey found that 86% of consumers try to avoid products that damage biodiversity. Consumers are increasingly aware of deforestation, and more companies are pushing for bans on deforestation and for governments to enact legislation that would combat deforestation.
Fairtrade and Fairtrade farmers are working to do their part to counter deforestation. Fairtrade Standards stipulate that producers may not cut down protected forests, but many farmers go above and beyond this, using their Fairtrade Premium funds to plant more trees, which can provide helpful shade and weather protection for their crops, and expand forested areas.
In May 2022, Fairtrade farmers in the Fairtrade Producer Network in Latin America and the Caribbean (CLAC) planted more than 300,000 trees in a six month tree-planting drive “Plant for the Future,” with more than 100 Fairtrade Producer Organizations across 20 countries participating. Additionally, the Fairtrade Network of Asia and Pacific Producers (NAPP) launched a project to plant one million trees across the region. Also in 2022, Fairtrade and Earthworm Foundation announced a partnership to combat deforestation. Using satellite monitoring, the project will capture critical deforestation data within Fairtrade cooperatives and their smallholder cocoa farmers in Ghana and Côte d’Ivoire to help these communities better manage forest landscapes.
Supply chain due diligence requirements will become more prevalent.
Oxford Economics found that across industries, 88% of companies have either created a clear mission statement around sustainability or they’re in the process of writing one, but less than half of those respondents said they had significant visibility into their own sourcing of sustainable products, and only 21% had complete visibility into their supplier’s sourcing of sustainable products. Additionally, Deloitte found that consumer brands that aren’t open and transparent are the most at risk of losing meaningful trust with consumers.
More retailers are seeking brands that can provide transparency along the supply chain, including in the form of third party certifications. A wave of regulations on human rights and environmental due diligence (HREDD) has also begun in Europe in recent years. The European Commission adopted a proposal aimed at fostering sustainable and responsible corporate behavior throughout global value chains, and Germany passed the German Supply Chain Due Diligence Act in 2021 that will take effect on January 1, 2023. The U.S. is likely to follow – the Securities and Exchange Commission already announced proposed rules and rule amendments on corporate due diligence.
Fairtrade has helped companies to make ethical sourcing decisions and verify supply chains for more than 30 years and is continuing to improve how it helps companies practice due diligence. Fairtrade has been ranked as the gold standard for certifications by an independent monitoring group called Fair World Project in its Reference Guide to Fair Trade and Worker Welfare Programs, pointing to the certification as a go-to partner for brands looking to make good on their value claims.
Growth in products marketed as sustainable.
The 2021 Sustainable Market Share Index™ found that sustainability-marketed products were responsible for a third of growth in consumer packaged goods from 2015 to 2021, and market share growth continues year over year. Products marketed as sustainable now hold a 17% market share, up +3.3 percentage points from 2015, with significant growth during the pandemic. Additionally, products marketed as sustainable grew 2.7x faster than products not marketed as sustainable.
As consumers continue to seek out sustainable options, companies aim to meet that demand by backing up sustainability claims. In 2021, more than 2,500 companies used the Fairtrade Mark on more than 37,000 products sold globally with Fairtrade products accessible to consumers in 143 countries, according to the 2022 Fairtrade Annual Report. In 2021, 5,000 products from more than 500 brands were sold in the U.S. and made with Fairtrade certified ingredients, specifically, and produced in accordance with the Fairtrade Standards.
Consumers and brands will prioritize regenerative agriculture practices.
Regenerative agriculture is a description for farming practices that mimic nature’s design and help decrease impacts of climate change by working to replenish natural resources. Regenerative agriculture is focused on improving soil health and biodiversity. In a Food Insight survey, 30% of consumer respondents selected regenerative agriculture as a top choice among the most beneficial agricultural and consumption practices for the land their food is grown on, though only 19% of respondents were familiar with the term. Fairtrade predicts an expanded focus on regenerative agriculture in 2023 as more brands work with farmers to implement these practices where ingredients are grown.
A key component of regenerative agriculture is diversification of crops and plants grown on farms. Using the Fairtrade Premium, farmers are able to diversify the crops they grow on their land, which can benefit the land as well as provide additional sources of income and food security during off seasons for their main crop.
“Responsible shoppers in the US are demanding that companies and governments drive transformation that benefits the people who grow our food and protects the planet,” said Carlos Urmeneta, director of commercial partnerships, Fairtrade America. “As expectations of transparency and sustainability in the supply chain become more and more mainstream, we are partnering with farmers, retailers and brands to provide shoppers the assurance they are looking for in their favorite products.”
Partnership with a leading certification organization like Fairtrade America is one way that companies can keep up with these market trends toward sustainability and achieve their own visions for environmental and social impact. In addition to more support for farmers and greater supply chain assurance, brands that partner with Fairtrade and label their products with the Fairtrade Mark make it easier for shoppers to see how their products align with ethical and sustainable values.
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Fairtrade America partners with brands on the journey to certification and beyond. We can help with everything from finding a certified supply chain to marketing your newly certified product.Get in Touch