Fairtrade America – a globally recognized label for social justice and sustainability – shared five key trends the organization expects will drive consumer choices and brand action in 2023.
Despite inflation and rising prices on everyday consumer products, research shows that many consumers are still making thoughtful choices while shopping, choosing products that align with their values. And as these consumers become increasingly interested in and informed about supply chains, sourcing and product sustainability, brands will need to invest in practices that drive loyalty among discerning consumers.
Five Important Trends
Fairtrade America points to five trends that will propel consumer behavior and brand priorities in 2023:
1. Consumers Will Change Their Diets to Lower Environmental Impact
According to a recent study by GlobeScan on behalf of the Marine Stewardship Council (MSC), 31 percent of U.S. consumers who have changed their diet have done so because of an environmental reason, with 11 percent saying they changed their diet specifically due to climate change.
As people seek to lower their impact on the environment with everyday decisions, including the foods they eat and the beverages they drink, certifications from organizations like Fairtrade America, MSC and Non-GMO Project are making it easier to spot which products are made with the planet in mind.
Shoppers are increasingly understanding that certain certifications include environmental requirements as well as social and economic. In fact, 77 percent of Fairtrade shoppers say the Fairtrade label makes it easy to decide if a product is ethically and responsibly produced.
2. Supply Chain Due Diligence Requirements Will Become More Prevalent
Oxford Economics found that across industries, 88 percent of companies have either created a clear mission statement around sustainability or they're in the process of writing one, but less than half of those respondents said they had significant visibility into their own sourcing of sustainable products, and only 21 percent had complete visibility into their supplier’s sourcing of sustainable products. Additionally, Deloitte found that consumer brands that aren’t open and transparent are the most at risk of losing meaningful trust with consumers.
More retailers are seeking brands that can provide transparency along the supply chain, including in the form of third-party certifications. A wave of regulations on human rights and environmental due diligence (HREDD) has also begun in Europe in recent years. The European Commission adopted a proposal aimed at fostering sustainable and responsible corporate behavior throughout global value chains, and Germany passed the German Supply Chain Due Diligence Act in 2021 that took effect on Jan. 1, 2023. The U.S. is likely to follow – the Securities and Exchange Commission already announced proposed rules and rule amendments on corporate due diligence.
3. Growth in Products Marketed as Sustainable
The 2021 Sustainable Market Share Index found that sustainability-marketed products were responsible for a third of growth in consumer-packaged goods from 2015 to 2021, and market share growth continues year over year. Products marketed as sustainable now hold a 17 percent market share, up +3.3 percentage points from 2015, with significant growth during the pandemic. Additionally, products marketed as sustainable grew 2.7x faster than products not marketed as sustainable.
As consumers continue to seek out sustainable options, companies aim to meet that demand by backing up sustainability claims. In 2021, more than 2,500 companies used the Fairtrade Mark on more than 37,000 products sold globally with Fairtrade products accessible to consumers in 143 countries, according to the 2022 Fairtrade Annual Report. In 2021, 5,000 products from more than 500 brands were sold in the U.S. and made with Fairtrade certified ingredients, specifically, and produced in accordance with the Fairtrade Standards.
4. Consumers and Brands Will Prioritize Regenerative Agriculture Practices
Regenerative agriculture is a description for farming practices that mimic nature’s design and help decrease impacts of climate change by working to replenish natural resources. Regenerative agriculture is focused on improving soil health and biodiversity. In a Food Insight survey, 30 percent of consumer respondents selected regenerative agriculture as a top choice among the most beneficial agricultural and consumption practices for the land their food is grown on, though only 19 percent of respondents were familiar with the term. Fairtrade predicts an expanded focus on regenerative agriculture in 2023 as more brands work with farmers to implement these practices where ingredients are grown.
A key component of regenerative agriculture is diversification of crops and plants grown on farms. Using the Fairtrade Premium, farmers are able to diversify the crops they grow on their land, which can benefit the land as well as provide additional sources of income and food security during off seasons for their main crop.
“Responsible shoppers in the U.S. are demanding that companies and governments drive transformation that benefits the people who grow our food and protects the planet,” said Carlos Urmeneta, director of commercial partnerships, Fairtrade America. “As expectations of transparency and sustainability in the supply chain become more and more mainstream, we are partnering with farmers, retailers and brands to provide shoppers the assurance they are looking for in their favorite products.”
5. Consumers, Governments and Organizations Are Prioritizing a Decrease in Deforestation
Since 2000, 10 percent of the world’s tree cover has been lost, with the world losing an area the size of London each week, according to the U.N. A recent GlobeScan survey found that 86 percent of consumers try to avoid products that damage biodiversity. Consumers are increasingly aware of deforestation, and more companies are pushing for bans on deforestation and for governments to enact legislation that would combat deforestation.
Fairtrade and Fairtrade farmers are working to do their part to counter deforestation. Fairtrade Standards stipulate that producers may not cut down protected forests, but many farmers go above and beyond this, using their Fairtrade Premium funds to plant more trees, which can provide helpful shade and weather protection for their crops, and expand forested areas.
In May 2022, Fairtrade farmers in the Fairtrade Producer Network in Latin America and the Caribbean (CLAC) planted more than 300,000 trees in a six month tree-planting drive “Plant for the Future,'' with more than 100 Fairtrade Producer Organizations across 20 countries participating.
Additionally, the Fairtrade Network of Asia and Pacific Producers (NAPP) launched a project to plant one million trees across the region. Also in 2022, Fairtrade and Earthworm Foundation announced a partnership to combat deforestation. Using satellite monitoring, the project will capture critical deforestation data within Fairtrade cooperatives and their smallholder cocoa farmers in Ghana and Côte d’Ivoire to help these communities better manage forest landscapes.
Partner with a Leading Certification Organization
A partnership with a leading certification organizations is one way that companies and brands can keep up with these market trends toward sustainability and achieve their own visions for environmental and social impact.
Businesses interested in becoming Fairtrade certified can learn more at FairtradeAmerica.org.
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