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75% of shoppers ‘will boycott grocery brands’ over environmental concerns

Over three-quarters (77%) of UK grocery shoppers have, in the last 12 months, switched, avoided or boycotted buying certain products, or would consider doing so in the future, based on brands’ environmental policies.

Kantar questioned over 1,200 UK consumers between the ages of 16 and 65+ about their concern over a range of environmental issues, their purchasing decisions based on a brand’s sustainability credentials, environmental responsibility  and whether, as a consumer, they had ever decided to boycott buying a product or switch to another brand based on its environmental reputation. 

Brand loyalty is lowest among the youngest age group of 16-24 year-olds with 87% saying they have switched or might do so, with more males (24%) switching or boycotting brands than females (18%).

Responses differ considerably among generations too, with 40% of Millennials saying they have avoided buying, or decided to choose a different brand over the last 12 months, compared to only 9% of Baby Boomers. However almost half (46%) of this generation of 55-65+ year-olds indicated that while they hadn’t switched or boycotted brands in the last year because of their environmental credentials, they might consider doing so in the future – the highest among all age groups.

Harsh working conditions, environmental pollution and the overuse of packaging are some of the issues consumers think carefully about before purchasing FMCG products. 

Much needs to be done by the FMCG industry when it comes to publicising the positive work it is doing to address the environmental problems resulting from the throw-away, disposable culture we live in today, say 76% of consumers. This sentiment is high across all regions (>73%) with shoppers in the northwest of England (80%) agreeing followed by Greater London (78%). Only 9% considered this issue unimportant.

Mark Chamberlain, managing director of Brand, Kantar UK, said: “Responsible living is being driven by cross-generational groups of ‘woke’ consumers that look towards inspiring brand heroes as change leaders. Governments and organisations are being forced to listen and respond to consumers’ demands for greater transparency as businesses strive to become more purposeful.”

Almost 90% of respondents surveyed agree that brands need to take more responsibility for the waste they produce and the impact it this has on our environment. This sentiment was high across all age groups (>82%) but highest among those aged 65 and over (92%).

Three-quarters of shoppers agree that, due to inaction from many of the world’s governments, they want brands to act as forces for positive change in our society. However, when questioned about their response, over 70% of all consumers agreed that efforts by businesses to protect the environment are ‘too little, too late’, with younger generations of Millennials agreeing most with this statement (78%).

Environmental concerns

Consumers ranked global warming as their number one environmental concern (25%), followed by the overuse of plastic and other forms of packaging (18%) and then deforestation and the loss of biodiversity (14%). They appeared less concerned about the depletion of the ozone layer (4%), extraction of fossil fuels from the earth and natural resource depletion (5%), overfishing of our seas (6%) and household/industrial waste (8%).

These and many other of today’s environmental issues are caused, in part, by a lack of responsibility taken by some of the world’s leading brands, say 83% of consumers; a sentiment expressed most among 25-34-year-olds (88%).

Chamberlain added: “The rise in responsibility and conscious consumerism is being influenced by a top-down approach as the consumer voice grows and pushes forward environmental and social agendas.

“Consumers now expect the FMCG industry to be driven by some direction other than simply making a profit. These values are fast becoming key assets in helping boost brand value whilst projecting a positive corporate image, and by doing so businesses can demonstrate a clear sense of purpose. This is what consumers are now looking for in today’s brands, and this preference will only intensify as the next generation comes of age. Purpose-led FMCG brands enjoy stronger growth and a deeper connection with consumers.”

The study says UK brand Divine Chocolate  is an  FMCG brand that has earned greater trust from consumers due to its commitment to becoming more transparent and respect for the environment. While Waitrose has committed to no plastic and glitter in its Christmas crackers in 2020, Tesco has stopped using plastic bags for home deliveries and Morrisons now allows customers to use their own reusable containers at their meat, fish and cheese counters.

Kantar says the most-loved brands will be those that attempt to achieve a zero-carbon footprint by re-thinking operations and finding solutions that are fully sustainable both for the environment and the business bottom line.

Other key trends:

  • Plastic problem – Over half (53%) of consumers rank the overuse of plastic and other types of packaging as one of their top three environmental concerns. More women than men are concerned about it (58% v 49%), with 45-64 year-olds expressing most concern across all age groups (60%).
  • Buying decisions – 82% of 25-34 year-olds say they sometimes or always check a brand’s commitment towards sustainability, the environment and saving the planet before making a purchase.
  • Taking responsibility – Almost 90% of consumers agree that brands need to take more responsibility for the waste their products create and the impact it has on the environment, with 50% ‘strongly agreeing’. This sentiment is strong across all age groups (>82%) and is highest among the 65+ cohort (92%).
  • Younger generations – Those most concerned with the issue of global warming are 16-24 year-olds, the youngest age group overall, with 65% ranking it as one of their top three concerns; of those, over one-third said it was their number one concern. 
  • Boycotting brands – 76% of consumers said they had boycotted buying certain clothes, had switched brands in the last 12 months or were thinking of doing so because of a brand’s environmental policies.

Tackling the changing nature of retail with a well-prepared supply chain

By Ian Stone, CEO, Vuealta 

Debenhams, House of Fraser, Arcadia – these are just a handful of once-reliable High Street retailers and brand groups who now find themselves battling for their place on Britain’s high streets.

With shops closing at a rate of 14 a day, traditional high-street players are now facing unprecedented levels of competition from online and digitally-focused disruptors. But has the High Street really been crippled? Ultimately the answer is no, it’s simply being reinvented.

In fact, it appears that 62% of shoppers still prefer to shop on the high street, but their expectations have changed dramatically, and retailers need to buck their ideas up if they’re to meet them. As such, there has recently been a resurgence of interest in physical stores from industry giants, but in an entirely new and integrated way. 

It’s now more important than ever that retailers entice customers back into stores with refreshed and exciting takes on what the physical store really is – crossing the realms of digital and physical so customers can get the best of both worlds. That’s why, while many brands are already mastering the art of personalisation online, they’re now also using these data-driven insights on consumer behaviour to bring the same levels of customer experience and relevancy to the physical store.

For example, Amazon has introduced various initiatives from its four-star experience to Amazon Go, which cater to very specific demographics and consumer needs. But the changing nature of retail is moving at an unprecedented rate, making it difficult to keep up. To do so, brands need to begin making the most of their data to carefully map their supplychains and streamline costs.

Keeping up with evolving consumer demands 

Running a physical store is expensive. The property price boom in the UK has only recently reached its peak and May saw retailers suffer their worst month in almost a quarter of a century. To try and overcome these challenges, retailers like Amazon are returning to the high-street with smaller footprints to streamline their expenditures and offer more personalised experiences for their customers. Aldi and Lidl, for example, continuously change their stock depending on seasons and current trends in order to maintain reduced costs and keep their bargain hunting customers loyal.

But today’s customers expect instant gratification and ventures like this are fragile. They rely on a robust supply chain that can cope with consistently changing consumer demand, meaning these new types of stores can no longer rely on traditional supply chain structures. They need expert stock management with the ability to respond and adapt to change at speed – especially when it comes to peak shopping seasons like Black Friday and Christmas. 

The need to be agile in the digital age 

It’s ironic, but the answer to coping with the demands of these new stores lies in the digital technologies that are creating the need for them. In today’s digital age, consumer behaviour can change as a result of one Instagram post, and supplychains need an agile solution that can react just as quickly as the market changes and plan for likely peaks in demand – whether that’s with the ability to deliver more strawberries to Aldi’s Wimbledon store in July or hairdryers to Argos when the latest reality TV star posts an ad on their story.  

While data may now be considered the world’s most valuable resource, it has always been possible to access a variety of external and internal data sources to provide hard evidence to back up insights and assessments when developing plans. The real challenge has been being able to bring all that together, across internal silos and in varying formats, to form a cohesive and clear direction. Now, however, supply chains and their respective retailers have the ability to quickly connect and verify different data sources. By breaking down the silos, they can then access a clear view of what’s needed in order to formulate solid, evidenced-based plans.

That connection then allows supply chain organisations to rapidly harness data from a variety of sources to quickly formulate and adapt plans. That could be rerouting shipments into a distribution centre where demand is higher, deploying trucks and drivers to new shops, or updating promotions and stock availability if deliveries are delayed or demand outstrips supply. And streamlining this process can lead to significant competitive advantages.

The supply chain is the backbone of retail

The speed at which markets change today may appear to render long-term planning redundant, but it does the opposite. The key to keeping up with consumer demand ultimately lies in a well forecasted plan.

When retailers and supply chains plan for all their ‘what ifs’, including unexpected peaks and troughs in consumer demand, they’ll be prepared to respond to any changes that may otherwise expose their fragility and bring them to their knees. And when customers’ needs aren’t met, they will be quick to shout about it online, ultimately harming the business’ reputation. But when these unexpected, and expected, challenges are handled appropriately and responded to in adequate time, retailers can truly reap the benefits of increased sales. 

Planning isn’t a static process, and by no means has a simple beginning and end. If you’re starting out from a disjointed and siloed process, organisations need to be prepared to go through some level of trial and error initially, which will take time and multiple iterations before they get it right. But the end result will truly pay-off as companies will be able to access and collate critical data sources enabling them to reduce the impact of uncertainty and build realistic, actionable responses to all their potential ‘what ifs’.

Retailers and supply chains that do decide to take the planning leap will therefore be in a much stronger position when it comes to keeping their customers loyal by seizing all opportunities that will inevitably appear.

GUEST BLOG: Data holds the key to food sustainability

A raft of new sustainability and food wastage initiatives is undoubtedly focusing the attention of food service and hospitality providers. Otherwise wasted food from kitchens is increasingly being repurposed by a number of great charities, which is a great start but should not distract from the bigger issues within the end to end food production supply chain.

In addition to improving the measurement and monitoring of food production within kitchens, it will be the sharing and analysis of data from manufacturers, 3PLs, processors and hospitality that will be key to achieving the ambitious targets in reducing wastage, Peter Ruffley, Chairman of Zizo explains…

Front Line Responsibility

There has been a plethora of recent initiatives to tackle the £3bn of food wasted in this food service and hospitality sector every year, from ‘Step Up to the Plate’ which encourages organisations to make commitments to measure and reducing their own food waste, to the ‘Guardians of Grub’ from Wrap and ‘Food waste, Bad taste’ from the Sustainable Restaurant Association.

While the target to halve food waste by 2030 may seem ambitious, its goal is to get half of the 250 largest food businesses measuring, reporting and acting on food waste this year under the IGD Food Waste Reduction Roadmap that will require a very significant change in mindset. Right now, many of the companies in this sector looking at food sustainability have passed the buck to those on the front line: signing up with any one of the excellent charitable organisations, such as FareShare, which repurpose and redistribute surplus food.

While this is clearly an important step in ensuring this food is used wherever possible, it does not address the reason for that waste in the first place. Companies are not actively monitoring and measuring the entire food preparation process to better understand the causes of waste.

Data Driven Reduction

Clearly attitudes are changing; the idea that wastage is an inevitable biproduct of food production is being challenged. Given the economic challenges facing the issue, the financial benefits are also compelling: according to research from Wrap, the average benefit-cost ratio for food waste reduction was 7:1 over a three-year time frame.  And key to achieving this benefit is data driven understanding; from measuring food waste, to rethinking inventory and purchasing practices and reducing food over production.

Some steps are easier than others. Food waste is highly visual – and with the right approach companies can quickly map trends. Are some menu items routinely uneaten? Can portion sizes be reconsidered? Clearly it is easier to impose control within those mass market organisations with ubiquitous, often microwaved, food products. In many ways the trend towards fresh, local and healthier eating has made it more difficult to manage and reduce wastage. But measuring trends in food utilisation and consumption can quickly reveal opportunities to reduce portion size, tweak menus and rethink supply.

Changing Attitudes

Cultural shifts in this area will also pay dividends.  Change customer expectations by reducing the extensive menus, for example. It is far easier to predict demand and ensure consistent quality with a smaller product set, which will reduce waste; and publicising the sustainability goal will resonate with the customer base.  

Companies also need to look beyond the kitchen and consider the end to end supply chain – and this too will require a change in attitude from the industry to achieve transparency and understanding.

Right now, an organisation with a supply chain that stretches around the world will typically have no information from multiple manufacturers or third-party logistics (3PL) about wastage or fuel consumption. To achieve any meaningful insight into environmental impact will require a collaborative approach to data sharing if food overproduction is to be addressed right from the beginning of the supply chain.

Image by Lars_Nissen_Photoart from Pixabay

Some logistics firms ‘will evolve to become retailers’

Some logistics companies will evolve to become retailers as the first standardised wave of ecommerce fragments in a variety of creative new ways to sell and add value.

That’s according to a new report from IGD, in association with The Consumer Goods Forum.

Looking at how companies can respond to this change and how businesses will utilise digital technology to become more relevant, the report explores three digital retail models of the future and predictions for an increasingly digital food and consumer goods industry.

Major grocery ecommerce markets will continue to expand rapidly, growing at almost four times the rate of any other channel. Data highlights from the research include:  

  • Asia-Pacific’s online grocery market will grow by 196% by 2023, adding $198bn
  • North America’s online grocery market will grow by 152% by 2023, adding $38bn
  • Europe’s online grocery market will grow by 66% by 2023, adding $21bn

Asia and North America will lead the way on the rate of growth, with Europe set to develop this channel at a comparatively slower pace.

Indeed, grocery ecommerce sales in Asia-Pacific are set to triple over the next five years, with IGD forecasting that in 2023, ecommerce’s share of grocery in Asia (7.5%) will be twice that of North America (3.4%), and close to three times larger than Europe’s (2.5%). 

IGD says businesses are transforming their established operations through digital technologies to enhance their stores, reduce costs and improve connection with customers. Its predictions for rapid evolution include:

  1. Technology-led strategic partnerships will accelerate rapidly. Technology companies will have a much stronger influence on CPG retailing
  2. Advanced digital technology will help physical stores close the data gap on pureplay operators
  3. The commercial trading interface between established retailers and suppliers will be transformed by AI
  4. The most advanced traditional retailers will diversify to become less reliant on selling products
  5. Retailers with the best data capabilities will win in the long term by becoming incrementally better every single day

Ecommerce 2.0 – The first, mainly standardised wave of ecommerce is fragmenting in a variety of creative new ways to sell and add value.  IGD’s predictions for Ecommerce 2.0 include:

  1. Successful pureplays will diversify offline, either by opening their own stores or forming alliances with traditional retailers 
  2. Manufacturer D2C businesses will become a major force and they could be consolidated through a single ordering platform
  3. Specialist retailers and marketplaces will proliferate
  4. Some logistics companies will evolve to become retailers
  5. Social commerce will go global, with platforms integrating with ecommerce to offer more frictionless shopping

Ecosystems A network of retail and consumer services is emerging, linked by logistics, financial services and technology.  IGD’s predictions for Ecosystems include:

  1. Ecosystem evolution will vary considerably by market
  2. More technology companies will evolve into ecosystems, with more major technology businesses broadening their capabilities and services
  3. Ecosystems will recruit a growing number of established businesses to get even closer to shoppers and the wide range of products and services they need and want
  4. New consumer services will be bolted onto ecosystems (e.g. healthcare, leisure, hotels etc.), connecting as many consumer touchpoints on the path to purchase as possible
  5. The centralisation of data and use of advanced technology means that ecosystems will gain real time insights, promoting rapid change, driving greater personalisation for shoppers and raise profitability, a benchmark for all other retail models.

Peter Freedman, Managing Director of The Consumer Goods Forum, said: “While of course growth remains challenging for all of the established players in the industry, many are nevertheless finding that the ongoing disruption presents exciting opportunities. This report presents several ideas for consumer goods and retail companies looking to secure their long-term future, and we’ll be discussing some of these themes at the Global Summit in Vancouver: how scale and agility can impact your business model, how digital technologies will permeate decisions and how new forms of collaboration will help drive the sustainable evolution of our industry.”

Download IGD’s free report: igd.com/digitalretailmodels

Image by StockSnap from Pixabay

Retail woes ‘increase supply chain risk’

A new report suggests that growing pressure on the retail sector could increase risk-taking in the supply chain, resulting in further store closures and collapse of well-known brands.

The analysis, published by Cranfield School of Management and Dun & Bradsheet: ‘Global Supply Chain Risk Report,’ cites the fact more than 7,500 stores closed in 2018, with many high street brands hitting the headlines with profit warnings.

The new data shows increased levels of risk-taking since Q4 2018, with retailers reporting high levels of dependency on suppliers and indicating a propensity to off-shore to low-cost, high-risk countries where suppliers are more likely to be financially unstable.

“We know from recent news headlines about store closures, and the collapse of well-known chains, that the UK retail sector is under huge pressure at the moment. With many consumers preferring to do their shopping online, any retailer with a bricks and mortar footprint will be feeling the pressure,” said Dr Heather Skipworth, Senior Lecturer in Logistics, Procurement and Supply Chain Management at Cranfield.

“Analysis suggests that the sector is sourcing more from low cost regions, which are often associated with heightened risk and potential for supply chain disruption caused by political, environmental, or economic factors. There is also an increased probability of suppliers themselves being financially unstable in these countries. To mitigate against these risks, it is imperative retailers ensure they are practising dual supply strategies to help manage the trade-off between risk and cost and ensure smooth running of operations.”

Chris Laws, Product Leader at Dun & Bradstreet, said: “With retailers under pressure to identify cost efficiencies, it’s more important than ever for them to know exactly who they are doing business with to help minimise risk and ensure compliance with regulations. 

“Having robust due diligence processes in place is key to ensuring the stability of the supply chain and maintaining responsible, ethical procurement practices. In a challenging economic environment, risk-taking is understandable, but retailers need to ensure they have a full picture of supply chain relationships to flag potential risks and protect their reputation.”

Using four key metrics – supplier criticality, supplier financial risk, global sourcing risk, and foreign exchange risk – the Global Supply Chain Risk Report investigates the level of perceived supply chain risk faced by European companies with international supplier relationships.

The Q1 2019 Global Supply Chain Risk Report is available to download now from https://www.dnb.co.uk/perspectives/corporate-compliance/q1-2019-global-supply-chain-risk-report.html

Are retailers waking up to the supply chain visibility imperative?

By Amir Harel, General Manager of Visibility Solutions, Zetes

Customer demands are a significant contributor to the added complexity, cost and waste, that retailers are seeing in their supply chains.

As companies cite more flexible returns, faster delivery and real time delivery updates as the key causes, new research from retail decision makers reinforces the undisputed need for improved supply chain visibility.

Crucially, the lack of visibility is affecting organisations’ performance and the foremost problems that surface are:

  • Excessive inventory levels
  • Increased waste
  • Lost sales due to products not being available
  • Lack of real-time alerts to mitigate potential disruption
  • The ability to identify returned goods as available stock 

The survey conducted by Sapio Research on behalf of Zetes, reveals that 94% of respondents lack the ideal visibility of events affecting their supply chain performance, while 87% agree that a fully visible supply chain with real-time updates can give an organisation a competitive advantage.

However, almost three quarters (71%), say that a lack of supply chain visibility has had a negative effect on the business.

Other key survey findings include:

  • 33% of respondents mention that the sheer volume of data and lack of access to real time data are proving a challenge when trying to improve supply chain visibility
  • Customer satisfaction and loyalty are essential corporate objectives and there is recognition that supply chain visibility would improve these by over 30%
  • 42% of supply chain decision makers find ‘reduction in waste’ very challenging

With so many potential areas of the supply chain to address, where do retailers go from here? 

The goal of visibility is ultimately to gain better control and unlock performance potential.  As a platform for greater efficiency and network collaboration it can be transformational. Without it, retailers will struggle to achieve the big wins associated with improvements in waste, on-shelf availability, supplier performance and customer engagement.

The key is to combine the big vision with pragmatism. In other words, it is important to think big but start small and then scale as the gains become evident. With the appropriate knowledge of supply chain processes and how to synchronise physical and digital data flows across disparate systems, a fast ROI can be realised with minimum technology investment and complexity.

Zetes’ Supply Chain Visibility Research Report surveyed 451 respondents in the UK, France, Germany and Spain. All interviews were conducted in December 2018 and January 2019.

Retailers warn over ‘no deal’ Brexit food supply chain risks

Sainsbury’s, Asda, Waitrose and M&S are among UK retailers to have warned about the devastating impact a so-called ‘no deal’ Brexit will have on food security and supply in the UK.

In an open letter to MPs, send by the British Retail Consortium trade body, the CEOs of the country’s biggest food retailers called on the government to do everything it can to prevent the cliff-edge scenario from occurring.

The letter, which was also signed by eateries KFC, McDonald’s and Pret A Manger, said that food stocks will experience shortages and that sufficient storage at ports and in warehouses simply wasn’t available for stockpiling given the just in time methods employed on most food imports.

The letters reads: “Our supply chains are closely linked to Europe – nearly one third of the food we eat in the UK comes from the EU. In March the situation is more acute as UK produce is out of season: 90% of our lettuces, 80% of our tomatoes and 70% of our soft fruit is sourced from the EU at that time of year. As this produce is fresh and perishable, it needs to be moved quickly from farms to our stores.

“This complex, ‘just in time’ supply chain will be significantly disrupted in the event of no deal. Even if the UK government does not undertake checks on products at the border, there will still be major disruption at Calais as the French government has said it will enforce sanitary and customs checks on exports from the EU, which will lead to long delays; Government data suggest freight trade between Calais and Dover may reduce by 87% against current levels as a result. For consumers, this will reduce the availability and shelf life of many products in our stores.

“We are also extremely concerned about the impact of tariffs. Only around 10% of our food imports, a fraction of the products we sell, is currently subject to tariffs so if the UK were to revert to WTO Most Favoured Nation status, as currently envisaged in the no-deal scenario, it would greatly increase import costs, which could in turn put upward pressure on food prices. The UK could set import tariffs at zero but that would have a devastating impact on our own farmers, a key part of our supply chains.”