Addressing sustainability across the supply chain in 2022 by FMCG Gurus

FMCG GURUS: Addressing Sustainability Across the Supply Chain in 2022 November 2021

Information Classification: General

Concerns about the state of the planet and whether damage can be reversed continue to intensify COVID-19 is something that has accelerated concerns about the state of the environment Across the globe, consumers are becoming concerned about the state of the environment and are questioning whether damage done to the planer is reversible. These concerns have intensified over the last couple of years as people have had firsthand exposure to environmental damage, such as more adverse weather conditions and the destruction of natural resources

The COVID-19 crisis is something that has further intensified concerns about the state of the planet, with people questioning whether damage done to the environment was something that helped cause the acceleration of problems caused by the virus.

Proportion of consumers who say that they have become more concerned about the environment as a result of COVID-19

Are you concerned about any of the following? 2020

2019

Apr-20

2020

May-20

74% 62%

67%

59% 51%

48%

53%

55%

62%

60%

Information Classification: General

The state of the Damage done to the environment has environment is irreversible worsened over the last two decades

Global

69%

68% 65% 67%

52%

Africa/Middle Asia-Pacific East

Feb-21 78%

73% 75%

71%

49%

I am concerned about the state of the environment

Jul-20

62%

55%

Europe

78%

68%

63% 48%

73% 75%

53% 47%

North America

South America

Consumers have a variety of concerns relating to the state of the planet Consumers want brands to take a more proactive approach in addressing the environment Consumers are becoming more aware and concerned about a variety of environmental issues. This can be linked to people being educated about the state of the planet at an earlier age than ever before, and more exposure to issues through a variety of media channels. As a result, consumers have a variety of concerns.

Are you concerned about any of the following? 2020 Top ten answers Global

Carbon emission

73%

Global warming

71%

Plastic pollution

As a result, consumers want brands to take a more proactive approach in addressing sustainability. This will result in brands being expected to revolutionize supply chains to address issues such as carbon emission, global warming, and food waste.

68%

Food wastage

67%

Deforestation

62%

Air pollution

62%

Proportion of consumers who believe that brands should be doing more to protect the environment

2019

71% 64%

Animal species going extinct Animal welfare

60%

49%

64% 46%

62% 48%

61% 52%

50%

58%

Sea pollution

55%

Land pollution via farming

55%

Information Classification: General

2020

Global

Asia

Europe

North America

South America

People are taking steps to change their diets in order to lead a more sustainable lifestyle Consumers are looking to be more resourceful

Proportion of consumers who have made changes to their diets over the last two years to lead a more sustainable lifestyle 2019

2020 - Global

2020 63%

48% 40%

55%

52% 43%

What changes have you made? – Top five answers Consumers who have made changes to their diets in order to lead a more sustainable lifestyle

47% 40%

57%

42%

Made greater attempts to reduce food waste

Turned to more local food and drink Eaten more fresh food and drink

Global

Asia-Pacific

Europe

North America South America

62%

51%

Reduced/eliminated eating meat

49%

Reduced/eliminated eating/drinking dairy

48%

Over the last couple of years, approximately one in two people across the globe have made changes to their diets in order to behave in a more sustainable manner. While much attention is given to more contemporary diet plans, the reality is that for many, they are more likely to associate sustainable practice with resourcefulness.

Indeed, the two most popular answers given in relation to behaving in a more sustainable manner, was making greater attempts to reduce food waste and seeking out more local food and drinks.

Information Classification: General

73%

Demand for localized products will continue to grow as greater emphasis is placed on shortening supply chains Consumers also want to know the story behind the products that they purchase Proportion of consumers who say that they have been more attentive to locality claims as a result of COVID-19 Apr-20 55% 58% 50% 58% 54% 47% 49%

Global

May-20

61%

Africa/Middle East

49% 48%

56% 61%

Jul-20

Feb-21 66%

53% 54% 48% 51%

Asia-Pacific

Europe

43% 45%

52% 55%

72%

50% 36%

North America

South America

Proportion of consumers who say the following are influential when choosing what products to buy. 2021 Product is traceable/ingredients can be sourced 64%

63%

Global

60%

63%

Africa

Information Classification: General

64%

65%

Asia

Product/ingredient is transparent in origin

64%

61%

Europe

69%

66%

North America

72%

69%

South America

Consumers are becoming more concerned about issues such as carbon emission, global warming, and food waste. The result of this will be that they will be more attentive to the supply chains of brands.

Over the last couple of years, consumers have placed greater emphasis on seeking out local food and drink. Such offerings are associated with a variety of benefits.

As a result of this, brands need to look to reduce supply chains and focus on localized sourcing and production.

Upcycled ingredients appeal to consumers because they are seen to be addressing the issue of food waste These ingredients should be aligned with the concept of ethical elitism Upcycled ingredients are ingredients that have directly been sourced from food that will otherwise potentially go to waste and re-used to make other products.

Proportion of consumers who find these ingredients appealing. 2021 Global: 61%

Africa/ME: 69%

Asia-Pacific: 61%

Europe: 57%

North America: 63%

South America: 67%

You state that you find the concept of upcycled ingredients appealing. Why is this? 2021 Consumers who find the concept appealing Global

Ingredients are better for the environment in general

63%

Ingredients help address the issue of food waste

62%

Ingredients sound more ethical

50%

Ingredients sound more natural Cost savings from such ingredients can be passed onto buyer

Transparency over where the ingredient has come from Information Classification: General

35% 19%

17%

When addressing food waste, one issue that offers an opportunity is the use of upcycled ingredients that otherwise would have been disregarded.

A total of six in ten consumers find the concept of upcycled ingredients appealing. This serves to highlight how consumers want brands to be more resourceful along the supply chain.

Upcycled ingredients have also had something of a coolness element attached to them in recent years, appealing to self-expressionist consumers who associate environmental behavior with a form of ethical elitism.

However, it is crucial that upcycled ingredients are not associated with compromise Upcycled ingredients need to be promoted as natural and nutritious Although consumers are concerned about the state of the planet, it is important not to overestimate how altruistic they genuinely are. For instance, many people will not purchase a product that is more environmentally-friendly if their need states are seen to be compromised as a result.

FMCG Gurus asked consumers who do not find upcycled ingredients appealing, why this is the case. The research found that the main barrier was that these ingredients were not deemed safe or trustworthy.

This means it is crucial that upcycled ingredients are not just positioned as more sustainable, but also natural and nutritious.

You state that you do not find the concept of upcycled ingredients appealing. Why is this? 2021 Consumers who do not find upcycled ingredients appealing Global 54% 32% 18%

18%

7% Other Information Classification: General

Ingredients may not be as Ingredients do not sound like they I would need more information on effective for helping me engage in will be of good quality such ingredients before I trust physical activity them

Ingredients do not sound safe/trustworthy

Concerns about food waste will also drive demand for innovative packaging solutions Packaging needs to ensure that food and drink is kept safe along the supply chain Do you have any concerns about the following types of packaging?

Proportion of consumers who say that the purpose of packaging is to ensure grocery products are as fresh and safe as possible

2019 76%

54%

Global

52%

Africa/ME

78%

72% 52%

Asia-Pacific

Paper

Plastic

Cardboard

Glass

Metal/ Aluminum

Chemicals in the material of the packaging contaminating the product that it contains

13%

47%

17%

13%

17%

Inadequate protection against exposure to heat and high temperatures which can damage the quality of the product

45%

28%

46%

19%

17%

Inadequate protection against germs and bacteria in the surrounding environment of the product

25%

34%

22%

25%

16%

Packaging not being strong enough to protect the product item from breakage before it is open

41%

27%

45%

28%

15%

Type of packaging meaning that products have a shorter use-by date and go off faster

42%

27%

42%

27%

16%

2021 78%

74%

2021 – Global

55%

Europe

52%

North America

75% 57%

South America

Increased concerns about health and safety have also resulted in consumers re-evaluating their attitudes towards packaging in recent years, such as a considerable proportion of individuals now expressing more concern about the safety of packaging materials and the ability of packaging to protect products along the supply chain.

This is something that creates the opportunity for innovation within the packaging industry, developing packaging that is deemed green and clean and robust, ensuring that packaging is sustainable and reduces the risk of food waste.

Information Classification: General

Brands need to demonstrate full transparency over supply chain initiatives Distrust can exist towards environmental claims made by brands

Proportion of consumers who say that brands are not transparent about their environmental initiatives. 2020

Global: 46%

Asia-Pacific: 50%

Europe: 42%

North America: 46%

South America: 55%

Proportion of consumers who say that they are not trusting of environmental claims made by food brands. 2020

Global: 25%

Asia-Pacific: 22%

Europe: 26%

One of the main challenges that brands have when acting in a sustainable manner, is increased levels of consumer skepticism towards practices and policies.

FMCG Gurus research shows that around half of all consumers say that brands are not fully transparent around environmental initiatives, while one in four outright say that they do not trust claims made by food brands.

When adopting supply chain initiatives to address issues such as food waste, a proactive a proactive approach to communication is needed, placing sustainability at the core of brand philosophy.

Information Classification: General

North America: 27%

South America: 25%

Green and clean positioning will be crucial for the food and drink industry in 2022 Consumers want products that are good for them and the planet

It is important to recognize that environmental concern is not a knee-jerk reaction to the pandemic, but a longterm trend that will only continue to intensify in importance for future generations.

As well as highlighting supply chain initiatives, brands also need to promote the use of natural ingredients that are deemed to be better for the individual and the planet, especially as more attention is paid to ingredients.

More so than ever, brands will need to promote claims related to natural formulation and the use of plant-based ingredients and tie these back to issues such as offsetting carbon footprint as a result.

What types of claims do you like to see on product packaging? 2021 100% natural 86%

80%

78% 57% 38%

82%

78%

50% 39% 31%

24%

Information Classification: General

Vegan-friendly

75%

35%

Global

Plant-based

29%

27% 18%

Africa

Asia Pacific

Europe

North America

30%

21%

South & Central America

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