Demand for Ethical Products Continues to Rise

I read several news articles today that state that the demand for ethical products has continued to rise despite the recession. According to the Co-operative Bank's annual Ethical Consumerism Report, the ethical market in the UK was worth £43.2bn in 2009 compared with £36.5bn two years earlier which is an increase of 18%.

The growth has not been exactly uniform. Certain sectors have enjoyed better growth than others. Fairtrade goods enjoyed a huge growth with Fairtrade food products alone growing 64% to reach sales of £749m. Sales of the RSPCA-backed Freedom Food products tripled in two years to reach £122m.

However because of the recession, sales of organic food slumped by 14% as shoppers opted for cheaper options. Personal products including clothing and cosmetics was the fastest growing sector increasing by 29% to reach £1.8bn. The market for green home products such as energy-efficient appliances grew by 8% in two years to reach £7.1bn.

Tim Franklin, chief operating officer of Co-operative Financial Services, said: "This annual report clearly shows that the growth in ethical consumerism continues to outstrip the market as a whole. I have no doubt that this will come as a surprise to those commentators who thought ethical considerations would be the first casualty of an economic downturn.

"However, whilst the rapid growth in areas such as Fairtrade and ethical finance, which we have witnessed in previous years, continues, other areas such as micro-generation and renewable electricity have unfortunately failed to make significant progress. We welcome the introduction of feed-in tariffs for household renewable generation and would hope to see the impact of these come through in future years' reports."

Whilst his point is valid, it is a tremendous nudge for customers and companies everywhere. It pays to retail ethically sourced products because consumers will still buy them. The tipping point is soon approaching where companies will be forced to re-evaluate unethical practices in their supply chain.

The best way for companies to boost ethical consumption is by being transparent about their activities which is one of the primary principles of good CSR. Consumers are rapidly becoming aware and are wanting to know where their product is coming from and how it was manufactured.

Last year a survey of over a 1000 14-25 year olds suggested two thirds of young people think companies should be 100% Fairtrade. The research was carried out by People and Planet over Fairtrade Fortnight also revealed that over 80% of those questioned thought that large companies, specifically Nestlé and Cadburys should make all their products Fairtrade. 82% felt that buying Fairtrade produce sent an active political message to the Government that other forms of trade are unfair.

Perhaps in addition to boosting their green credentials, companies should try reverse marketing to ensure that younger people are buying more ethically? Now that would be a change from the usual kind of advertising that we see.

Photo Credit: Flickr