December 9, 2007 - Why the free-range egg might come first
By: Carrie Briffett
Czech Buisness Weekly
The embryonic state of the socially responsible and organic trading sectors where big Czech retailers are concerned is perhaps well demonstrated by the huge difficulty a supermarket customer will typically face even when searching for a free-range egg.
Such eggs—different from factory farmed eggs in that they come from birds that are allowed to roam during the day rather than being permanently caged—have, for instance, been a basic item in U.K. supermarkets for at least 20 years, but are yet to make much impact on the consciousness of the Czech consumer.
That could all change, however, in the not too distant future. The European Union is banning “barren” battery cages from 2012. Only “enriched” cages, which must meet certain requirements such as 600 square centimeters of useable cage area per hen and the inclusion of a perch, will be permitted.
According to Anna Fraser, food policy research officer for U.K.-based farm animal welfare organization Compassion in World Farming (CIWF), several British supermarkets have or have pledged to ban factory farmed eggs ahead of 2012, while barren battery cages are already banned in Sweden and will be banned in Germany from 2008 and Austria from 2009.
In Holland, it was in 2003 that major Dutch supermarkets came to an agreement with animal welfare organizations to stop stocking eggs that came from hens confined in cages.
“As consumers become increasingly concerned about farm animal welfare, we are seeing supermarkets move toward higher welfare systems. Supermarkets are moving toward less intensive production that is more free-range and organic for all poultry, including turkeys, ducks and geese. And we expect to see more supermarkets improving the welfare of dairy cows and their calves,” Fraser added.
Fraser also pointed to a Eurobarometer survey conducted for the European Commission (EC) earlier this year. “[The survey] clearly shows high consumer concern for farm animal welfare and that consumers are willing to shop elsewhere for higher-welfare products,” she said.
The survey found that 62 percent of EU consumers would be willing to change their usual place of shopping in order to be able to buy more animal friendly food products.
Ethics hardly get a look in
Nevertheless, in the Czech Republic such ethical issues are rarely discussed. For instance, the summaries of a 2005 report by market analysts Gfk and Incoma Research showed that Czech consumers are generally very price sensitive. Low cost, along with a wider range of goods and a pleasant shopping atmosphere, were the key factors in domestic consumers’ choice of particular hypermarkets and discount chains, it said.
But in the U.K., retailers are now finding that consumers want more than just low-cost products. According to a report published on Dec. 3 by the Institute of Grocery Distribution (IGD), a research organization that specializes in food and grocery information, the current U.K. market for premium products is worth £ 14.6 billion (Kč 531.3 billion / € 20.4 billion). Premium products include organic, certified Fairtrade items, retailers’ premium own label, local and regional foods, and specialist fine foods. Fairtrade certification, which started in the Netherlands, is a system designed to allow people to identify products that meet certain environmental, labor and developmental standards.
IGD predicts the value of the premium market will eclipse £ 20 billion by 2012, with £ 1 out of every £ 8 being spent on premium groceries.
Gavin Rothwell, senior business analyst at IGD and author of the report, said that a variety of factors have “sparked a revolution in food consumption.”
“Celebrity chef culture, health and nutritional concerns, and greater foreign travel have all led to greater interest in what is on [U.K.] dinner tables, while environmental concerns are encouraging [U.K. consumers] to think more about the impact of food production,” he told CBW.
The report said that the strongest growth was in locally and regionally sourced products, Fairtrade,
organic products and the retailers’ own brands of premium ranges such as giant grocery and retail chain Tesco’s Finest and U.K. chain Sainsbury’s Supermarkets’ Taste the Difference products. The report added that several of the larger supermarkets, including Wal-Mart subsidiary ASDA, Wm Morrison Supermarkets and Somerfield, have all launched, relaunched or expanded their own brand of premium ranges in the past year.
A number of the major U.K. retailers have also increased their local sourcing efforts and made pledges to bolster locally and regionally sourced ranges. Tesco, has set up six offices in England and Wales to help source and distribute local products to nearby stores, and has recently run its fourth regional sourcing roadshow.
In August, IGD predicted that U.K. spending on organic products would soar by 50 percent over the next five years, reaching £ 3 billion by 2012, and the new report shows that organic products are increasingly sought after by less affluent consumers.
Organics go mainstream
“Organics were once stereotyped as a niche product for hippies and health nuts but in recent years organics have moved to the mainstream of retail, and organic products are now on sale everywhere, from discounters through to the most upmarket food stores. More consumers now believe in the taste or nutritional benefits of organics, which has lead to more widespread distribution, which has fed through to more sales. There has been a virtuous circle where economies of scale have fed through to lower prices, and driven sales,” said Rothwell.
The interest in supermarkets stocking socially responsible goods such as organic and Fairtrade produce is not confined to the U.K.
A 2005 report by research and consulting firm Organic Monitor, which analyzed the market for organic products in 17 Western European countries, showed a rising consumer demand for organic produce. The report said that supermarkets dominate sales of organic fruit and vegetables with a 48 percent share, although sales channels for organic fruit and vegetables are broadening.
The German market showed the highest growth with organic fruit and vegetable sales volume increasing by 14 percent in 2004.
Organic fruit and vegetables as a percentage of total sales are highest in Switzerland, Denmark and Sweden where organic vegetables account for over 6 percent of vegetable sales.
Fairtrade labels are also popular across Western Europe. Various Fairtrade labeling initiatives span 14 countries in Western Europe, where most major supermarkets stock Fairtrade products.
Regula Weber, press officer for Fairtrade labeling organization Max Havelaar Foundation Switzerland, said that, while in the last two years the Swiss growth rate of Fairtrade-certified goods was only 2 to 5 percent, until 2004 it was 40 to 50 percent per year.
“In Switzerland four out of five people know the Swiss Fairtrade label named Max Havelaar. They are ready to pay more for Fairtrade products and they would also like to have a wider range of products [not only] in supermarkets but also in restaurants. In Switzerland, the consumption of Fairtrade products … is the highest in the world. More than 50 percent of bananas are sold in the Fairtrade channel,” she said.
Sigrid Vester, the marketing manager at German Fairtrade initiative Transfair Germany, added that requests for Fairtrade licenses in Germany come from the supermarkets themselves as some have their own brands of Fairtrade products. German supermarkets are currently expanding to Fairtrade certified wine, rice, flowers and spices.
In October, U.K. supermarket group Sainsbury’s announced that it would convert all of its store brand tea to Fairtrade, followed by all of its roast and ground coffee. This follows the conversion of all Sainsbury’s bananas to Fairtrade this year. The move will mean that 10 percent of tea in the total U.K. market will be Fairtrade-certified.
Supermarkets have meanwhile been announcing plans to lessen their environmental impact. Earlier this year sustainability campaigners welcomed Marks & Spencer’s Plan A, in which it commits to become carbon-neutral, stop consigning its waste to landfill and use sustainable materials where possible.
Tesco was also praised for promising to put the carbon cost of its products on its labels. However, it opened itself up to skepticism on its environmental commitment after it was found to be shipping DVDs to Switzerland and back to exploit a tax loophole that allows customers to avoid paying value-added tax (VAT).
In 2002, Swiss supermarket Migros banned the use of palm oil in its store brand products due to the oil’s link to deforestation. Environmental organizations such as Friends of the Earth (FOE) are campaigning against palm oil plantations as it says they destroy biodiversity and are associated with human rights violations and worker exploitation. According to FOE’s Web site, one in 10 supermarket products contain palm oil.
