Supermarkets

Today, many supermarkets and local groceries have developed a new consciousness of what it is to be green and carbon neutral. When sourcing their food products or household merchandise—and when operating their businesses—supermarkets play a critical role in providing consumers with green choices. In general, the markets for green branding and green products have increased significantly over the past few years, not only in developed but also in developing countries. Not surprisingly, the world market for organic foods has, according to the International Federation of Organic Agriculture Movements (IFOAM), doubled between 2000 and 2006. In China, for example, supermarkets have almost doubled their floor space for organic goods.

The increased demand for green products or ecoproducts correlates with a growing awareness of environmental protection and a rising concern for healthy eating. Green products are very much about the personal values of consumers. Environmentally friendly companies will not only have the opportunity to satisfy their customer needs, but can also capture the willingness of consumers to spend more on green products in their own interests. As demonstrated in a recent green brands survey conducted by marketing company WPP, consumers worldwide agree that green products are more expensive than regular products, and that consumers in all of the surveyed countries expressed their intention to spend more money on green products. Almost two thirds of Chinese and Indian consumers said that they plan to spend more on green products.

[Page 419]When discussing green products, organic foods and the Slow Food movement must also be mentioned. The term organic food encompasses foodstuffs that are being produced with or without limited use of conventional nonorganic pesticides, insecticides and herbicides. What determines organic food is in general regulated: content needs to be certified and respectively labeled by recognized authorities and institutions. The Fair Trade movement—which is concerned with providing better prices for goods, improved working conditions, increasing local sustainability, and fair terms of trade for farmers and workers in developing countries—is often linked with organic food. In addition, the Slow Food movement attempts to preserve and promote local and traditional food products and local cuisine; to encourage organic farming; and to educate consumers about the dangers of fast food.

But the question is: can supermarkets provide sufficient green food options? It seems that many supermarkets are still lagging behind when it comes to satisfying increased consumer demand for environmentally friendly food options. Frequently green products are not clearly labeled, and it is unclear if the consumer knows exactly what constitutes a green product. Very often, consumers become confused by the variety of labels that declare the products to be “bio,” organic, and/or green. Again, the definition of green is relatively vague. Some supermarkets may attempt to become overly green, for example, being energy-efficient and producing less waste. Increasingly, more and more government regulations require this form of approach. Providing green choices for consumers, however, has yet to be regulated.

In the interim, it is up to the supermarket chains themselves to decide whether or not they see these green choices as profitable. Clearly, governments will play a critical role in the future when it comes to convincing supermarkets to offer more green products and educate their consumers. Considering the fact that ecofood products usually have a higher profit margin (based on the assumption that green consumers are often willing to pay more), promoting green products can benefit the supermarkets as well. However, supermarkets and retailers, who plan to target green consumers, have to come to terms with the fact that even green consumers do not always buy green products. So far, green consumers are still a relatively small consumer segment. Also, due to smaller economies of scale, many green or environmentally friendly options are relatively expensive.

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