Conscious Consumers and Their Impact on the Food and Beverage Industry

With the rise of environmentalism into mainstream thinking and a health epidemic fuelled by highly processed foods, consumers are becoming more conscious of their food choices and are increasingly demanding to play an active role in the decision-making process of what they consume. As a result, trends such as meat-free diets increased by 40% in the UK in 2021, with 55% of people citing environmental and health concerns as the two most significant reasons that influenced their choice. Consumers are also calling for transparency across the supply chain. Food brands and supermarkets are expected to provide comprehensive details of the impact of their products, as well as their nutritional content. Demand for organic products has soared. Organic markets across Europe and the USA have seen an average annual growth over the last 11 years. Similar trends are also observed in emerging markets. For example, in Nigeria, recent health campaigns have driven up demand for fresh produce. Research suggests that the growing urban middle class is becoming more health-conscious as awareness of the impacts of obesity increases. 

This shift in purchasing behaviour is driving meaningful change in the food and beverage industry across the value chain.  New research shows 60% of companies reviewed share a desire to progress in the same direction as consumers. Fifty-five per cent of business leaders surveyed reported increasing investments in sustainability processes and procedures. In the agri-processing space, farmers and producers are shifting towards organic and climate-smart processes. The organic survey conducted in the USA in 2019, showed that there has been a 17% increase in the number of certified farms in the USA between 2016 and 2019. In the EU, the share of agricultural land under organic farming increased by more than 50% between 2012 and 2020.

To answer calls for transparency, more companies are taking the time to communicate their sustainability goals, practices, and strategies publicly.  A recent example of this is Hershey’s Chocolate, who added a SmartLabel QR code to its Hershey’s Kisses Milk Chocolate to promote ingredient transparency and provide access to brand representatives, as well as alert consumers of any allergens or artificial sweeteners present.

The rise of conscious consumers is increasing the opportunity to see sustainability not just as risk mitigation, but as a way to generate incremental revenue. Major food companies that have seen the success that niche brands and start-ups have in attracting consumers through a combination of creativity and a strong commitment to health and sustainability are beginning to replicate these practices within their businesses. One such example is Danone. It has done this by innovating with its existing brands and acquiring or investing in start-ups that are transforming the industry. Within the French group’s portfolio are what the company calls manifesto brands, which align with the brand's sustainability ethos of ‘One Planet. One Health’. Currently, Danone has ten manifesto brands that account for 20% of the company’s turnover and are growing three times as fast as the rest of the company’s portfolio. The evidence demonstrates that companies adopting sustainability and health as core aspects of their business are growing faster and becoming more resilient. A shift towards sustainability will continue to distinguish market leaders and underpin the growth of the industry.