From Green to Budget // 07.06.2009 at 10:12 AM

Categories: Business Innovations in Sustainability, Buy Local, Fair Trade

According to the Guardian, many UK shoppers are switching to budget products in an effort to cut costs in this recession. In looking at sustainable and eco-friendly products, the price premium for such products needs to change in order to gain and maintain mass market adoption. This is evidenced by consumer opinion and decreased sales:

British consumers who in the past were willing to pay a premium for organic, Fairtrade and eco-friendly goods are now turning their backs on buying ethical in favour of cheaper shopping bills, according to a survey.

It is a trend that is likely to be long-term, according to research, which indicated that three in every five shoppers (69%) say they plan to continue cutting back on organic food after the downturn. Two-thirds (61%) claim they will seek to pay less for ethically sourced foods, such as Fairtrade, when the downturn ends.

The biggest single retail loser appears to be premium brands, particularly own-label high-end products such as Tesco's Finest and Sainsbury's Taste the Difference. Three-quarters (73%) of people stated they would seek to pay less for premium labelled supermarket goods in the future.

The survey was carried out by specialist marketing consultancy Cohn & Wolfe, and its findings are backed up by the latest shopping statistics in the UK, which show that organic food sales in 2008 slowed after more than a decade of sustained growth.

Are we going to see this consumer shift pick up steam in the US? If we haven't already, then yes.

The problem this sector must solve is how to be price competitive. It may be possible that eco-friendly and sustainable food products will always be more expensive, but how much more. When I shop for groceries, I admit that I cringe when I pick up organic produce that is double to triple the price of it's budget counterpart.

Those running these businesses need to find a way to be more competitive in order to maintain the market share they have, as well as gain additional market share.