A Natural Response
Posted 21 December 2016.
By Katie West, Director of Bare PR
The words ‘natural’, ‘organic’ and ‘sustainable’ are either terms with which you identify instantly, or that evoke visions of hippies and greenies, perhaps even prompting an eye roll. Regardless, these products are fast becoming categories for serious consideration globally, and it is more than just a desire for organically grown ingredients. Consumers want the companies they buy from to be ethically and socially aware as well, and that demand, coupled with inevitable environmental pressures, will only increase the momentum. Brands need to be ready to meet this growing market.
Natural and organic options exist across multiple categories. Based on a desire to bring change, they offer an alternative to traditional, often chemically-based category leaders and face stiff competition for shelf space against big brand players. Theirs can be a more unpredictable model as the price of natural ingredients and resources depends on crop yield and global supply and demand, and with the additional costs of transport and quality testing. While price and availability always play a part in purchasing, natural products have the added consumer drivers of addressing sensitivity or allergies, ethical and moral values, and environmental awareness (and perhaps a desire to be part of a growing trend).
But while the products are based on a ‘simpler’ approach, the categories can be a breeding ground for confusion as some brands make the shift in part (offering only a portion of completely organic ingredients, for example) and consumers struggle to understand the offering, such as the differences between natural, organic and certified organic.
This creates opportunities for smart marketing as brands see the potential to play to their strengths and retailers expand their natural and organic categories on the back of global trends and demand.
A brand’s ability to balance volume and value without compromising ethics and ingredients can reap rewards when securing FMCG and department store channels; for some brands we work with this can create a point of difference by deliberately not approaching these channels, and instead focusing on speciality retailers and advice channels, such as pharmacy. The smaller budgets of these newer companies requires strategic education and product messaging through social media channels and PR .
Historically, social responsibility hasn’t been a big focus for businesses, but with increasing attention on our environmental impact and companies’ manufacturing practices, consumers are questioning it more. This includes a new focus on sustainability, which traditionally referred to environmental considerations: is the company’s use of natural resources sustainable and non-depleting? Are they investing back into the environment? The term has now expanded to take into account social considerations such as suppliers, working conditions and paying a fair price for goods. ‘Environmental’ has also expanded to take into account the environmental impact of a used product. Will it decompose in a landfill or is it compostable? Will it flush into the waterways with minimal impact?
These should be important considerations for all brands today – because for every company that fails to embrace ethical or socially responsible production or practices, there will be a competitor who can and a consumer who will transfer their loyalty. The 2015 Nielsen Global Corporate Sustainability Report found that sales from brands with a demonstrated commitment to sustainability saw growth of more than four per cent, while others grew less than one per cent. From those consumers surveyed, 66 per cent were willing to pay more for sustainable brands, up significantly from 55 per cent in 2015 and 50 per cent in 2013.
As the planet gets more crowded, environmental considerations will have even more influence on not only consumer behaviour, but the simple availability of ingredients and resources too. Brands need to invest in and cement their supply chains to ensure stable future production. In time, these natural and organic categories won’t be the ‘outsiders’ anymore and it will be those who embrace a sustainable mindset now who will be best placed to meet future demand.