Leverage the Rising Sustainability Wave

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1 Leverage the Rising Sustainability Wave New Research and Best Practices Fair Trade USA October 2016

2 Who is Fair Trade USA? 3 rd Party sustainable and ethical certification Apparel & Shoes Quinoa & Rice Fruits & Vegetables Herbs & Spices Tea Honey and Sugar Flowers Coffee Wine & Spirits Body Care Chocolate Home Goods

3 The Fair Trade Theory Of Change Includes all actors Farmers & Workers Consumers Sustainable Livelihoods Businesses Activation Value Creation

4 What drives consumers? Quality Price Convenience Values and lifestyle

5 Consumers and Sustainability

6 Consumers Prioritize Sustainability Consumers are demanding sustainably sourced products and are willing to reward companies that make commitments Percent of Consumers who agree with each statement I have a more positive image when a company supports a social or environmental issue 91% I would like to see more of the products, services, or retailers I use support worthy social and/or environmental issues 89% I would likely to switch brands to one associated with a good cause 85% Whenever possible I try to purchase products or services socially and/or environmentally responsible 82% Cone Communications (2015) 0% 20% 40% 60% 80% 100%

7 Interest Continues to Grow Consumers are increasingly engaged with sustainability issues I am more interested today in how food is grown, raised or produced than I was two years ago The Future of Sourcing in Foodservice Technomic (2016) 63% Agree or Completely Agree I research a company s environmental/social responsibility before I buy a product Natural Marketing Institute (2015) 13% 25%

8 Millennials Drive Demand for Sustainability General Population Millennials I would tell my friends and family about a company s CSR efforts 72% 82% Cone Communications (2015) +10% I would be more likely to visit a restaurant offering clean label food Technomic (2016) 49% 61% +12% I avoid buying products from companies with poor labor practices Hartman Group (2014) 40% 47% +7% I am willing to pay 20% more for products made in an environmentally-friendly and sustainable way 27% 35% +8% Natural Marketing Institute (2015)

9 Awareness of Certifications is Growing Percent of US Consumers who recognize major sustainability labels 90% 80% 70% 60% 50% 40% 30% +2% +21% +25% +20% +6% 20% 10% 0% Natural Marketing Institute (2015)

10 Focus: Food Service

11 Technomic The Future of Sourcing (2016) Objective Explore the sourcing of local, clean-label and origin-specific products in foodservice - Highlight opportunities - Analyze sourcing trends Methodology: Technomic conducted quantitative, qualitative and secondary research - Consumer insights: quantitative online survey of 2,000 consumers - Operator insights: qualitative online survey with 356 operators

12 Definition: Clean Label Clean Label conveys notions of quality, trust and transparency

13 Food Service Patrons Care Three-quarters of consumers say it is important for all foodservice locations to offer clean label food Whether or not offering a clean label food is important for all restaurant types 76% I think that it is equally important for all types of foodservice locations The Future of Sourcing in Foodservice Technomic (2016)

14 Food Service Interest is Growing Consumers and the industry are increasingly interested in sourcing and sustainability. Consumers I am more interested today in how food is grown, raised or produced than I was two years ago Technomic (2016) Overall Male Female 30% 24% 36% 33% 33% 33% 63% 57% 69% Agree completely Agree Industry Which current culinary trend will be the hottest menu trend in 10 years? ENVIRONMENTAL SUSTAINABILITY LOCAL SOURCING Technomic (2016) NUTRITION ETHNIC CUISINES AND FLAVORS 13% 13% 22% 42% NRA (2015)

15 Food Service Expectations Is the industry meeting consumer expectations? SUSTAINABILITY 28% 80% SOCIAL RESPONSABILITY 31% 83% % Concerned about Issue % Indicating Food Service is Adressing Properly ENVIRONMENTAL ISSUES 24% 85% Technomic (2013) Nearly half of consumers say they would be more likely to visit foodservice establishments if they offered clean-label food Millennials have the highest preference for food service establishments offering Clean-Label food. MATURES 32% 49% Overall BABY BOOMERS GEN X MILLENNIALS 43% 49% 61% GEN Z 51% Technomic (2016)

16 Food Service What s Driving Interest Consumers and the industry are increasingly interested in sourcing and sustainability. Reasons for Increased Interest in Food Sourcing CONCERNED ABOUT FOOD SAFETY 70% HEALTH EFFECTS OF DIET 53% ENVIRONMENTAL EFFECTS 44% INCREASED MEDIA COVERAGE 29% The Future of Sourcing in Foodservice Technomic (2016)

17 Critical sustainability factors A majority of consumers believe food prepared at restaurants and other food service outlets should be Fair Trade and/or Organic Importance of Clean Label Terms % Extremely or somewhat important Recognizable 70% Fair Trade 55% Organic 50% The Future of Sourcing in Foodservice Technomic (2016)

18 Food Service Pricing Sustainability A significant proportion of consumers are willing to pay more for sustainability oriented descriptions Percent of consumers willing to pay _% more for a product Recognizable Ingredients 31% 15% Certified Organic 30% 16% Fair Trade 27% 14% Willing to pay 5% more Willing to pay more than 5% The Future of Sourcing in Foodservice Technomic (2016)

19 Food Service Expectations Expectations indicate that demand will only grow In the future I expect all restaurants and foodservice locations to offer food. 76% 65% 64% Recognizable Ingredients Fair Trade Technomic (2016) Organic Adoption is lagging behind expectations

20 Food Service Prepping for Change The runaway is short Two-thirds of consumers expect restaurants and other foodservice locations to offer clean-label ingredients within five years How Long Before Foodservice Locations Should Offer Clean-Label Ingredients WITHIN THE NEXT YEAR 14% 56% of Millennials say that foodservice locations should offer clean-label ingredients within the next few years. WITHIN THE NEXT FEW YEARS WITHIN FIVE YEARS WHITHIN 10 YEARS 28% 26% 21% WITHIN 20 YEARS 7% MORE THAN 20 YEARS 5% Technomic (2016)

21 Despite Strong Consumer Sentiment Barriers Still Exist Consumers are looking for conveniently accessible sustainable products and services Barriers to purchasing sustainable products/services There is not always an option to purchase these products or services 85% They don't have time to seek out these products or services 59% They don't know what social or environmental claims they should prioritize 53% 0% 20% 40% 60% 80% 100% Cone Communications (2015) Conclusion: There exists a need for more communication

22 Food Service Communicating Sustainability Where are consumers looking for information? Consumers prefer to learn about ingredients through direct information on the menu SOURCING INFORMATION FOR EACH MENU ITEM 57% 17 ON FOOD PACKAGING IN-ST ORE SIGNAGE ADVERTISING/MARKETING COMMUNICATION 32% 38% 43% WEBSITE ON REQUEST T O SPECIFIC INQUIRIES SOCIAL MEDIA 15% 12% 31% 66% of consumers prefer to learn BOTH through stories of impact and numbers/data when hearing of a company s social or environmental commitments or results. Technomic (2016) Cone Communications (2015)

23 Food Service Sustainability is a Leading Culinary Trend Sample Menu Cocida Appetizers Salad with walnuts Burrata with tomatoes In store signage Equator Coffee places cobranded signs in cafes and retail locations Prosciutto, watermelon and parmesan House specialties Original tofu burger Crab cake sandwich Homemade fish and chips Beverages and Desserts Coffee Lemon Pie Sodas Juices Blackberry cheesecake Ice cream Glass of wine Packaging and POS Sustainability branded cup sleeves and other point-ofsale marketing materials Beer

24 Transparency is Highly Valued 1) Consumers are skeptical Assume companies are striving to be as responsible as possible 49% VS 51% Don t believe companies are striving to be as responsible as possible 2) But are also willing to reward honest companies. Percent of Consumers who agree with each statement Believe it's okay if a company is not perfect, as long as it is honest about its efforts Want companies to tell them what they're doing to operate more responsibly or to support social and environmental issues If I learned of a company's irresponsible or deceptive business pratices, I would stop buying its products 85% 85% 89% 0% 20% 40% 60% 80% 100% Cone Communications (2015)

25 Questions for Reflection and Discussion 1. Where and how is your organization focusing on sustainability? 2. Who is your audience and what aspects of sustainability resonate with them? 3. How are you communicating your current commitments?

26 Sustainability and Fair Trade Fair Trade values resonate with consumers Important Factors for Product Purchase Provide safe working conditions 87% 13% Contribute to a community s economy 19% Protect the environment 21% Provide fair compensation to farmers 81% 79% 79% Important Not Important 21% Provide opportunities for kids to go to school 74% 26% CONE Communications (2013)

27 Consumers associate Sustainability with the Fair Trade Certified Label Those who recognize the label associate the following statements with the Fair Trade Certified Label Farmers and workers are justly compensated 65% = Helping farmers in developing countries build sustainable business that positively influences their communities 48% Natural Marketing Institute (2013)

28 Works Cited CONE Communications 2015 Cone Communications Millennial CSR Study 2013 Fair Trade USA Fairness Factors Survey Hartman Group Outlook on the Millennial Consumer 2014 Understanding the Sustainable Consumer Lessons Learned and Upcoming Research, 2013 Natural Marketing Institute 2016 State of Sustainability in American 14 th Annual Report NMI Coffee Consumer Sustainability Insights/Mother Parker Tea & Coffee Inc. Technomic The Future of Sourcing in Food Service, 2016

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