Ethical foods - fad or foundation

“Ethical foods” is a term used to describe a group of food products with features that reflect how the food is produced, processed and supplied to market.  These features may be seen by consumers as being good for sustainability, the environment, animal welfare, human health or as simply as “doing the right thing”.  There are also times when consumers view these products as providing higher quality. The term “ethical foods” has evolved as an all-encompassing description for these types of products, but it is a food industry term and not used or well understood by consumers.

It is now clear that these issues are important to some consumers, who are typically motivated by the want to do something about these issues.

Furthermore, they are willing to pay for products delivering these features, as is reflected in the volume and 15% price premiums that mainstream “free range” poultry meats currently enjoy. This momentum will flow into some level of impact on all food sectors where the attribute is clearly conveyed to the consumer.

For any food category, there are several emerging issues

• If some producers, processors or retailers embrace ethical elements, this by default implies that other products in the category are “less ethical”.
• There is potential conflict between claims, which may undermine credibility and/or confuse consumers.  Various environmental claims may face-off, with overlapping claims between fair trade, rainforest and carbon footprint platforms.
• Most require whole-of-chain collaboration and support rather than commitment from individual parties.
• There are challenges faced with economies of scale – several will suffer due to smaller-scale output due to rejection of intensification.
• The ongoing development of commercial initiatives to measure claimed impact will require backing of credible monitoring or regulation to retain credibility with the consumer.
• Time poor consumers are unlikely to easily comprehend the detail of several platforms and programs, in order to discern the value of products on offer.
• Demand can outstrip supply in early development of some of these platforms (e.g. Free range) giving rise to substantial premiums over conventional methods.
• The new social media channels are a powerful medium to reach tech-savvy consumers. If these consumers are also interested in ethical foods, then this becomes a powerful combination.