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Social and Ethical Considerations Continue to Impact New Zealand Hot Drinks

7/24/2016
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Consumer interest in ethically-sourced hot drinks continues to increase, largely focused on fair-trade certified coffee and tea products. Manufacturers use this as a key point of differentiation for their products, as well as advertising their membership of organisations such as the Ethical Tea Partnership (eg The Bell Tea & Coffee Company) to highlight their commitment to ensuring they source products sustainably, with a commitment to worker rights.

Commitment to this cause was furthered in 2015 as Nestlé New Zealand Ltd reformulated its popular Milo brand to utilise sustainably sourced cocoa and palm oil. Palm oil in particular has gained significant media attention as the use of the product has been linked to deforestation across the globe. While the move by Nestlé attracted some consumer backlash regarding the change in the taste of Milo, in many circles it drew plaudits for taking a proactive approach to product sourcing initiatives.

Outlook

Social and ethical concerns are expected to remain at the forefront of consumer decision making. The reformulation of Milo to incorporate the use of ethically sourced ingredients was the latest development in this trend. The further expansion of this trend is difficult to build upon in hot drinks due to the unique nature of the categories (ie coffee and tea products cannot be easily reformulated).

Nonetheless, manufacturers in tea and coffee are expected to utilise independent accreditation schemes to ensure they are sourcing products from sustainable and ethical sources. This is expected to continue to be used in promotional and marketing activity and to provide a point of differentiation.

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