Overview:

Introduction

Ethical and sustainability issues exert significant influence on the alcoholic drinks industry, which is often negatively implicated in discourse surrounding a range of social issues. Growing numbers of consumers not only acknowledge the urgency of environmental and ethical issues, but accept a personal responsibility to address them. This includes the products and services they purchase.

Scope

* Comprehensive analysis of consumer values, attitudes and behaviors with regard to ethical and environmentally friendly consumption
* Detailed analysis of the most influential ethical/sustainable claims, with specific focus and implications for the alcoholic drinks sector
* Comprehensive market growth forecasts for the organic and Fairtrade alcoholic beverage market segments
* Covers alcoholic drinks, across 20 countries in five regions, and incorporates multiple waves of proprietary consumer research

Highlights

Concern for the environment has intensified for the majority of global consumers in recent years. Indicative of just how significant the issue has become, around two-thirds of consumers are willing to endure some degree of economic burden to protect the environmental finding made even more relevant in the context of the global economic crisis

The importance of ethical/sustainability benefits to drinkers needs to be put into context; only minorities in most countries perceive that they are highly attentive towards the ethical positioning of alcohol brands. Nevertheless, considerable scope exists for ethicality features and benefits to rise up consumers' hierarchy of purchase influencers'

Many consumers are deeply skeptical about large corporations claiming to go green, as very few companies are seen as honest to begin with. Highlighting the credibility gaps that impede take-up of ethical products, over one-quarter of global consumers stated that corporations' declarations of their ethical practices were untrustworthy

Reasons to Purchase

* Understand consumer attitudes towards the most pertinent ethical and environmental issues to help inform communication strategies
* Improve your marketing by following best-practice guidelines enabling more effective targeting with 'on-trend' products and relevant communications
* Access data from multiple of global primary research to increase the likelihood of being 'on-trend' with ethicality-led NPD and marketing activities

Overview 1
Catalyst 1
Summary 1
THE FUTURE DECODED 14

INTRODUCTION: Ethical consumerism is influenced by numerous drivers and inhibitors 14
TREND: Environmental concerns are escalating among global citizens 23
TREND: A segment of alcoholic beverage consumers is acting on ethical beliefs in their product choices, but a disconnect exists between attitudes and actual purchase behavior 40
TREND: Organic alcoholic beverage growth is slowing, but the market evolution reflects the ongoing influence of environmentalism and health in directing consumers’ drinking choices 61
TREND: Growth in Fairtrade alcoholic beverages is expected to supersede organic in more developed markets over the next five years 86
INSIGHT: Environmental concerns drive heightened interest in regional/local alcoholic beverages 100
INSIGHT: Packaging has emerged as a highly important issue in the sustainability debate, including in alcoholic drinks 105
INSIGHT: Ethicality extends to the responsible marketing of alcohol 120
INSIGHT: Ethical consumerism can have important implications for emotional wellbeing 131
INSIGHT: Many factors impede the larger-scale adoption of more ethical and sustainable alcoholic beverages such as lack of perceived value, lack of trust, and limited choice 137
INSIGHT: Propensity to buy ethical products can be characterized by important age and gender distinctions, but there is a degree of commonality across socio-demographics 156

ACTION POINTS 163
ACTION: Ensure that more pertinent product attributes are not compromised for ethical benefits 163
ACTION: Market ethical products as a positive lifestyle choice 170
ACTION: Ensure ethical claims deliver on their promise and thus serve to engender consumer trust 177
ACTION: Bring ethical consumerism to mass market, but be wary of over-commercialization 197
APPENDIX 206
Definitions 206
Supplementary data 207
Report methodology 216
Further reading and references 218
Ask the analyst 224
Datamonitor consulting 224
Disclaimer 224

TABLE OF FIGURES

Figure 1: Corporate social responsibility remains a top-tier business issue for consumer companies 17
Figure 2: Ethical consumerism involves a mix of ‘positive’ and ‘negative’ consumer behaviors 19
Figure 3: Sustainability captures an even broader range of issues than ethical consumerism although there is considerable overlap 21
Figure 4: Ethical consumerism is influenced by numerous drivers and inhibitors 22
Figure 5: The sustainability challenges differ markedly depending on economic progress 26
Figure 6: Numerous studies have shown that consumers in developing countries feel heightened responsibility for the environment 26
Figure 7: The importance of protecting the environment has grown for many global citizens in recent years 27
Figure 8: Consumers from high growth markets outside of Europe and North America tend to exhibit the strongest feelings about the need for strong corporate contributions to society & the environment 28
Figure 9: The extent people feel truly informed about environmental issues is lower than expressed concern 29
Figure 10: Few Europeans consider themselves to be fully aware about the environmental impact of the products they purchase 30
Figure 11: There is worldwide consensus that global warming is a serious problem 32
Figure 12: The majority of global citizens hoped that their own country would take a leadership in during the Copenhagen Summit in December 2009 33
Figure 13: Despite being in a global recession, a considerable proportion of global citizens would, in theory at least, sacrifice some economic growth to address environmental concerns 34
Figure 14: In a number of countries, citizens consider sustainability-led issues to be more of a concern than the economy in 2009-10 35
Figure 15: Sensitivity to environmental issues in the US varies considerably by political affiliation 37
Figure 16: Reducing consumption levels in order to improve the environment is an ideology that majorities of global citizens subscribe to—at least from an attitudinal perspective 38
Figure 17: Individual carbon footprint has become more important to nearly half of global consumers 42
Figure 18: Many global citizens are adopting a tougher personal stance about one’s own impact on the environment which reflects a relatively pronounced belief that individual action can have an impact 43
Figure 19: Four different consumer segments reflect the approach and outlook individuals across countries adopt regarding their own personal impact on the environment 44
Figure 20: The disconnect that exists between ethical attitudes and actual purchase behavior has been widely reported in various research studies 45
Figure 21: The perceived importance of buying ethical products exceeds the willingness to change purchasing habits to buy such products 47
Figure 22: An overwhelming sentiment exists among Western and Eastern Europeans that corporations are not doing enough to address climate change 48
Figure 23: Few individuals across countries express high levels of satisfaction with their personal efforts to help protect the environment 50
Figure 24: Very few consumers acknowledge that they are greatly influenced by a company’s environmental friendliness 52
Figure 25: A marked gap exists in the stated influence of product quality versus ethical or sustainability factors when consumers across territories decide where to shop 54
Figure 26: In most nations, consumers are most likely to be indifferent in their satisfaction about the range of organic and/or socially responsible products when grocery shopping 55
Figure 27: Taste and flavor dictates consumers’ alcoholic beverage choices, with ethics and sustainability a secondary concern 57
Figure 28: Products touting ethical or sustainable credentials need to contend with the habitual nature of alcoholic beverage selection; consumer may simply overlook these benefits 57
Figure 29: Further evidence of the relative de-prioritization of ethical attributes when opting for alcoholic beverages was apparent in Datamonitor’s most recent fieldwork in July and August 2010 59
Figure 30: Drinkers are generally skeptical of sulphites and other additives in organic wine processing 63
Figure 31: Although opinion is somewhat divided, US consumers lean towards the view that organically grown food is more healthful than conventionally grown food 65
Figure 32: The top reasons for purchasing organics are more compelling for organic wine compared to organic food 66
Figure 33: The benefits of organic wine are most commonly related to its positive impact on the environment 66
Figure 34: Many drinkers perceive that organic wine is healthier than conventional wine, mainly due to the absence of chemical pesticides and additives in winemaking 67
Figure 35: The long-term negative health implications of drinking alcohol is important to a large segment of drinkers in most countries, more so than the potential weight gain of drinking too much 68
Figure 36: Various claims associated with ethicality such as ‘natural’, ‘pure’, and ‘organic’ favorably influence consumers perceptions of grocery products 71
Figure 37: The propensity to purchase organic alcoholic beverages is considerably less common than the conscious efforts made to choose products based on health or value-formoney 72
Figure 38: Drinkers are not well informed about the difference between ‘regular’ and organic alcoholic drinks, which makes it harder for the industry to encourage switching behavior 76
Figure 39: Germany is Europe’s largest market for organic alcoholic beverages 80
Figure 40: The comparatively large organic market in the US will grow at a slower rate than in Brazil and Canada in the next five years, albeit at a rate that will outpace the alcohol industry overall 81
Figure 41: The comparatively small organic markets in China, South Korea and India are expected to grow rapidly over the next five years 83
Figure 42: Negative perceptions of biodynamic wine can be attributed to lack of awareness and understanding 85
Figure 43: Fairtrade is focused on promoting production, trade and business and development standards 87
Figure 44: Awareness of Fairtrade varies markedly across the globe with Europe leading the trend 89
Figure 45: Initiatives such as the Fairtrade Foundation’s “Big Swap” campaign promote awareness and trial of Fairtrade alternatives 89
Figure 46: A high proportion of shoppers across countries are potentially persuadable when it comes to adopting Fairtrade 92
Figure 47: The propensity to purchase Fairtrade alcoholic beverages is considerably less common than the conscious efforts made to buy alcoholic drinks on the basis of health or valuefor- money 93
Figure 48: Fairtrade market growth in Sweden is expected to continue to outpace the rest of Europe over the next five years 96
Figure 49: The bulk of Fairtrade sales in North America came from the US, however major growth will come from Canada in the next five years 97
Figure 50: The propensity to regularly buy local food and drinks is generally a lot lower than the attitudinal importance attached to the issue 103
Figure 51: Localism in alcoholic beverage buying is a secondary concern when compared with other considerations such as taste and price 104
Figure 52: Sustainable packaging can be identified narrowly or broadly and is one of a multitude of issues that must be addressed in packaging as a growing number of trends simultaneously shape consumers’ packaging expectations 106
Figure 53: A widespread perception exists among consumers that grocery products are overpackaged 109
Figure 54: Public awareness and interest in sustainable packaging is fueled by a plethora of communications focusing on the issue 110
Figure 55: The view that alcoholic beverage products are over-packaged is less apparent, with most drinkers still not particularly attentive to the sustainability of alcohol packaging 111
Figure 56: Consumers are not willing to compromise hygiene and protection for environmental benefits 112
Figure 57: Consumers are putting their beliefs into practice in the case of reduced packaging alcoholic drinks 113
Figure 58: A wide range of global and national ethically aligned labels act as information cues for shoppers 114
Figure 59: Consumers are learning to read product labels to assess the ethical credentials of products, as evidenced by this European data 115
Figure 60: The majority of European consumers employ environmentally friendly measures that either require little effort or offer cost savings 117
Figure 61: US consumers favor environmental measures that are convenient or save them money 118
Figure 62: Many Europeans believe public authorities are responsible for protecting individuals from alcohol related harm 121
Figure 63: Most consumers feel they are informed about responsible drinking levels 122
Figure 64: The vast majority of EU consumers support warning messages on alcohol bottles and ads, with slightly higher support for the latter 125
Figure 65: The feeling that health warnings should be placed on alcohol products varies considerably by country 127
Figure 66: Leveraging the profile of well-known personalities has proven a common marketing strategy to educate consumers on the dangers of drink driving 129
Figure 67: Grolsch launched an iPhone application to ensure the responsible drinking message resonated with its target market 129
Figure 68: The pursuit of products with environmental and/or ethical credentials can have health connotations which is why the ‘ethical wellbeing’ trend should be recognized by industry players 132
Figure 69: Ethicality and sustainability are associated with a sense of wellbeing 133
Figure 70: Emerging market consumers are particularly likely to believe that environmental problems are having a negative impact on their health 135
Figure 71: Global warming is associated with a lower quality of life, especially among emerging market consumers 136
Figure 72: Ethical wellbeing is a compelling opportunity providing impetus for strategy defining social marketing initiatives 137
Figure 73: Carbon footprinting is not a universally recognized, let alone understood, term 139
Figure 74: Consumers understanding of what Fairtrade means varies considerably 140
Figure 75: Consumers are not fully informed about the health impact of chemicals used in everyday products, even though concerns about this issue drive heightened adoption of natural/organic alternatives 140
Figure 76: The escalating value consciousness among consumers has also resulted in brand switching which further heightens the pressure for ethicality-led brands to exude value142
Figure 77: Asian consumers exhibit a willingness to pay higher prices to address climate change 144
Figure 78: Global consumers are generally more willing to pay more for organic over Fairtrade alcoholic beverage products, but there is a general reticence towards both product formats 145
Figure 79: With so many consumers skeptical of ethical marketing tactics, alcoholic beverage marketers must beware the sins of greenwashing 147
Figure 80: Reflecting widespread skepticism, less than one in five consumers believe that corporations embrace green initiatives primarily because they genuinely care about the environment 148
Figure 81: Over one-quarter of consumers are skeptical of corporations’ ethical claims 151
Figure 82: When consumers feel there is too much choice and many rely on habit to direct what they buy, it can have e negative impact on the adoption of ethical alternatives such as Fairtrade 153
Figure 83: Consumers across the globe are largely welcoming of retailer ‘choice editing’, at least in theory 154
Figure 84: The notion that is important to buy ethical or socially responsible products is not significantly influences by age or gender 157
Figure 85: Younger consumers had the highest propensity to switch to natural or organic alcoholic beverages in 2009 158
Figure 86: 18-34 year old consumers were most likely to report buying Fairtrade alcoholic beverages with greater regularity in 2009 159
Figure 87: The appeal of reduced packaging alcoholic beverages appears to increase with age 160
Figure 88: Locally produced food and drinks were purchased most often by 50-64 year old consumers 161
Figure 89: While ethicality and sustainability credentials do influence alcoholic beverage choices, manufacturers and retailers must not lose sight of the wider hierarchy of purchase influences 164
Figure 90: In a pertinent ‘win-win’ marketing scenario, French Rabbit wine company claims that its eco-friendly packaging offers consumers two extra glasses of wine compared to an ordinary bottle 165
Figure 91: One Planet’s innovative packaging offers durability and portability 168
Figure 92: A real ethical/sustainability advantage can be used to inspire customers and end consumers 170
Figure 93: Ethical products can effectively tap into the desire to purchase in line with one’s expressed values 171
Figure 94: The GoodGuide iPhone application gives users access to product ratings and quality checks, as well as instant recommendations based on what is important to them 172
Figure 95: Using high-profile names to promote a cause helps ensure wide visibility among consumers 174
Figure 96: Environmentalism is not just hip, it also has genuine luxury value 174
Figure 97: 360 Vodka leverages its sustainable credentials to validate its ‘eco-luxury’ positioning 175
Figure 98: Three important commonalities represent the crossover between ethical/environmental consumerism and authenticity 176
Figure 99: Lebanon's Christian Maronite monks have combined clever marketing with age-old wine-making tradition to launch the country's first certified organic wine 177
Figure 100: There are four reasons why trust- and ethos-based branding are of increasing importance 178
Figure 101: industry players must focus on sustainability claims that are transparent 180
Figure 102: PepsiCo was among the first companies to provide consumers with an absolute number for a product’s carbon footprint 184
Figure 103: Independent studies help to validate TRU’s unprecedented environmental claims 185
Figure 104: Sapporo beer in Japan was one of the first to use carbon labeling on packaging 185
Figure 105: Truly embracing sustainability means evaluating an entire business structure 187
Figure 106: Companies should look beyond single attribute eco-labels 187
Figure 107: New Belgium Brewing Company conducted a full life cycle assessment of a six-pack of beer to communicate a genuine commitment to sustainability and assist in goal-making188
Figure 109: Nestle’s manifesto of ‘Creating Share Value’ involves demonstrating responsibility across the entire supply chain 190
Figure 110: Allow consumers to “connect” with the source of your products 191
Figure 111: Equal Exchange has implemented an education program to raise awareness of core issues concerning food production and global trade 192
Figure 112: Many companies, including Innocent drinks (shown below) now include a breakdown of their carbon footprint, allowing consumers to compare brands based on sustainability issues 192
Figure 113: Del Monte has a dedicated section within its company website emphasizing its commitment to environmental and social responsibility 193
Figure 114: Guayaki details consumers’ positive impact on the environment across several stages of the product lifecycle 194
Figure 115: Your Pure Honey engages consumers by allowing them to become personally involved in the brand story 195
Figure 116: Sustainability needs to be anchored in the wider corporate brand philosophy to enhance credibility 197
Figure 117: Sustainability has an important role internally within an organization, in particular employees 198
Figure 118: Home Depot’s Eco Options demonstrate the company’s commitment to the environment and sustainability 201
Figure 119: The eco-friendliness of GustOrganics bar stretches from the all-organic drinks menu to its sustainably-sourced wind power 203