Washington — Sustainability will be top of mind for brands and consumers moving into 2023, along with increased transparency and due diligence in supply chains, according to Fairtrade America. The non-profit organization shared five key trends it says it expects will drive consumer choices and brand action in 2023.
Despite inflation and rising prices on products they 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, reports Fairtrade America. 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.
The five trends that will propel consumer behavior and brand priorities in 2023 noted by the organization are:
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 percent of U.S. consumers who have changed their diet have done so because of an environmental reason, with 11 percent 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.
Consumers, governments and organizations are prioritizing a decrease in deforestation. Since 2000, 10 percent 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 percent 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.
Supply chain due diligence requirements will become more prevalent. Oxford Economics found that across industries, 88 percent 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 percent had complete visibility into their suppliers’ 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.
Growth in products marketed as sustainable. The 2021 Sustainable Market Share Index found that sustainability-marketed products were responsible for one-third of growth in consumer packaged goods from 2015 to 2021, and market share growth continues year on year. Products marketed as sustainable now hold a 17 percent 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.
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 percent 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 percent 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,” says 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.”