Where to Play and How to Win? Mapping the Opportunity of Sustainability in Packaged Food

July 2021

A scorecard approach evaluating survey results, macro environment and claim usage across 40 markets to help companies prioritise where to emphasise sustainability and to which target group. Analysis of brand level claim usage identifies the key selling points of niche key challengers in growth markets and focuses on packaged food multinationals.

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Key findings

Ethical claims is the smallest claim group, with some rapid developments taking place

Health claims are the most important in foods, but this leaves a white space to explore in terms of sustainability communication. Organic is the leading ethical claim in packaged food by merit of its connection to health, but building and profiting from a sustainability platform is a holistic approach rather than any one single label. Outside of the well-established organic label, ethical labels is the fastest growing claim group in terms of digital share of shelf.

Emerging market consumers lack ethically positioned food

Survey results show that consumers in many developing and emerging markets are keen to live sustainably, but the gap in the share of sustainably labelled products is large. Local food companies with an ethical positioning often use organic labelling or/and source locally. Of course, premium pricing is a barrier to reaching a wider target group, and ethical approaches that do not require a premium pricing appear to provide the greatest opportunities looking ahead.

Ethical claims lose digital share of shelf in Sweden, the number one potential market for sustainable claims

Sweden is at the top of the index of market potential for sustainable claims, yet the digital share of shelf for sustainable claims decreased here in 2020, with the biggest loss seen in organic. At the same time, the WWF reports that sales of sustainably labelled products are growing slower than the market. Polarbröd, a Swedish sustainability leader in foods, appears to see its commitments in sustainability as an employer branding initiative rather than a consumer-centric priority.

Leading food companies innovate and reposition to meet environmental targets

Leading food companies are growing their share of assortment with sustainable claims and keep investing in sustainability commitments across the supply chain, organisation and employees. Many of these approaches are cost-effective and can bring sustainability claims outside of the premium assortment. Given their global reach, they have an opportunity to fill the gap in developing markets.

Introduction

Scope
Key findings

The Need for Sustainable Products

Emerging market consumers particularly positive about sustainability
Organic, the leading environmental sustainability label, loses share in 2020
Community impact and affordable eco-friendliness in high demand
COVID-19: from sustainability to purpose

Sustainability Claims’ Market Landscape

Ethical labels is a small group without strong growth in packaged food
Rich variety of claims within ethical claims
Ethical claims not only for small premium brands
Who are the consumers demanding sustainability?

Where to Play: Packaged Food Sustainability Index

Methodology: a three-pronged approach to market measurement
Measuring sustainability in packaged food: data types and coverage
Packaged food product claims: tracking digital share of shelf
Green actions correlate with a desire to buy sustainable food and drinks
The “green macroenvironment”: Euromonitor’s Sustainability Index
Where to play: Nordic markets lead Sustainability Index in packaged food
Where to play: mapping the opportunities in packaged food sustainability
White spaces: high-potential markets with low claim penetration rates

How to Win: Innovators in Sustainability

Nestlé innovates with sustainable packaging and phrasing of its claims
Unilever doubles down on use of ethical claims
Hipp is a multinational with a consistent approach to organic
Polarbröd rebuilds better during the pandemic after a devastating fire

Conclusion

Conclusion

Appendix

Measuring sustainability in packaged food: data types and coverage
Product Claims and Positioning method
Packaged Food Sustainability Index: included lifestyles survey questions
Packaged Food Sustainability Index: standardising scores
Overview of Lifestyles survey
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