Written by: Marissa Vosburg
Some of my fondest childhood memories involve trips to the farmers’ market. Each Saturday, my family and I traversed the aisles of fresh, local food; perusing (and tasting) the various samples and getting our groceries for the week.
Professionally, I’ve found myself digging into what drives consumer food choices. Through this search, I’ve gained insight into why my family made the choices that led us to the farmer’s market. It wasn’t just a place to get a sweet treat or try a new snack, it was a way for us to connect to our food, and the people who produced it. At the end of the day, that connection-built trust in our food system.
Consumers Seek Connections with the Supply Chain
My family represents a small part of a larger trend that has developed over the last two decades: people want to know where their food comes from. This trend is especially popular among younger generations, as Gen Z and millennial consumers are almost two times as likely as their baby boomer counterparts to search for connections to their food.
In local communities, farmers’ markets serve this role. They act as liaisons between local producers and consumers—a place where consumers can investigate, evaluate, and understand who is producing their food and how it is being grown. Unfortunately, this experience is difficult to execute at the scale our supply chain demands.
In place of a direct connection with those producing their food, consumers have started to ask more from their supply chains in the form of employee management, animal welfare, and sustainability.
A study conducted by the Baker Retailing Center at the Wharton School of the University of Pennsylvania and First Insight found that purchasers across age levels are willing to pay a premium for products they deem “sustainable”. This increased spend on represents a capitalization opportunity for retailers and producers.
The Impact of Greenwashing
However, this value can only be captured if retailers and producers within their supply chains can communicate and execute their sustainability claims to their consumers. Otherwise, these brands face accusations of greenwashing.
Greenwashing, or marketing products as more sustainable and eco-conscious than they are, can be detrimental for brands. One study conducted by Harvard Business Review found that when a company is perceived to be actively greenwashing or thought to have previously greenwashed, their customer satisfaction, earnings per share (EPS), and return on investment (ROI) all diminished.
For example, advertisements for Oatly, a dairy-alternative brand, were banned by the Advertising Standards Authority in the United Kingdom after including misleading data to suggest their products were more sustainable than traditional cow milk.
Similarly, Keurig was required to pay $10 million to purchasers after improperly labeling and claiming their K-Cup pods were recyclable when they were not eligible for recycling in many areas.
Oatly and Keurig present case studies on the tangible impacts greenwashing can have on the operations, financials, and brand reputation of a firm and suggest that greenwashing is a serious risk for companies interested in capitalizing on sustainability movements. Further, these examples show the need for retailers to find a way to both communicate their sustainability efforts and ensure they have the data to support these claims.
Bringing Value and Credibility to Sustainability Supply Chains
This is where Ever.Ag comes in. Our team is focused on creating a new marketplace where producers can garner revenue from their sustainability efforts while delivering quantifiable sustainability benefits for consumers. By doing so, producers are compensated for their efforts to build more sustainable food chains and retailers mitigate risks of greenwashing while consumers reap the benefits of sustainable products and increased confidence.
In other words, our team is bringing the trust a consumer feels when shopping at a farmers’ market to the supply chain.
Links:
Michigan State University Study on consumer interest in where their food comes from: Why should we care if our young people know where their food comes from? – MSU Extension
Food Institute on generational purchasing trends related to ESG: Poll: Most Americans Have ‘Trust Gap’ Over Food-Source Information – The Food Institute
Forbes on consumers demanding sustainable products: Consumers Demand Sustainable Products And Shopping Formats (forbes.com)
World Economic Forum on what greenwashing is: Consumers Demand Sustainable Products And Shopping Formats (forbes.com)
Harvard Business Review on the financial impacts of greenwashing: How Greenwashing Affects the Bottom Line (hbr.org)
The Guardian on Oatly’s banned ads: Oatly ads banned by UK watchdog over ‘misleading’ green claims | Food & drink industry | The Guardian
The National Law Review on Keurig’s lawsuit: Keurig Agrees to Pay $10 Million to Settle Recycling Class Action (natlawreview.com)
