Skip to content Skip to footer
Search

Loading Results

Environmental sustainability becoming a business imperative

For food and retail operators in Canada, sustainability is no longer a nice feature to add to a product. It’s becoming the way of doing business for companies looking to meet changing consumer preferences.

In our 2019 Consumer insights survey, we explored Canadians’ views on several issues, including their attitudes toward sustainable shopping practices. It showed that when it comes to food and non-food purchasing decisions, many consumers are willing to pay a premium for products that are local, organic and ethically or sustainably produced. Canadians are also concerned about excessive packaging, with many choosing to avoid the use of plastic where possible.

With environmental concerns becoming a rising consumer focus, businesses need to think about tailoring their products and experiences to meet customers’ desire for sustainability.
 

Buying local

When it comes to sustainable food choices, 65% of Canadians care first and foremost about buying local products and are willing to pay a premium for them. While demand for local products is fairly consistent across gender, it varies geographically. Specifically, willingness to pay a premium for local products was most prominent among Canadians living in Nova Scotia, British Columbia and New Brunswick, with at least 70% of respondents in each province saying they would do so.

Despite having modest incomes, 65% of Canadians earning less than $50,000 a year are willing to pay a premium for local products. This figure is only 4% below that of those earning more than $150,000, which shows that local products are important across all income groups. Some Canadians are potentially spending beyond their means to buy these products.

In response to this change in demand, food retailers should think about expanding their local product lines and showcasing them online and in their stores more prominently, particularly in regions where demand is high. Making these sorts of changes could prove valuable for food retailers looking to drive revenue and meet consumer needs.

As we found in our recent Saveurs report on the food and beverage sector, we’re already seeing many industry players—including retailers—strengthening their relationships with local suppliers and investing in new farming innovations and techniques, like hydroponics and urban greenhouses, that permit year-round harvesting.
 

Packaging

When asked about their sustainable shopping habits, a large number of respondents pointed to decisions related to packaging. Up to 42% of Canadians are now avoiding the use of plastic where possible and buying products with less packaging. Our survey also found 38% are looking for products with environmentally friendly packaging.

Plastics and packaging are often perceived by consumers as a product’s biggest environmental issue. Just in the last year, we’ve seen heightened interest about plastics in the media. Images of plastics polluting our oceans and harming our sea life have spurred concern among consumers, prompting a commitment by Canada to ban single-use plastics by early 2021.

Canadians living in British Columbia (49%) and New Brunswick (53%) appeared most concerned with packaging, avoiding plastic where possible. This is possibly due to their proximity to oceans and fisheries, exposing them first-hand to the impact of plastics on their water quality and sea life.

Focusing on packaging is a tangible, direct and relatively easy way for people to feel like they’re making a difference, whether it’s by avoiding bottled water or excessively wrapped produce.

Yet sometimes, when looking at the complete life cycle of a product, more important environmental issues are at play. From this perspective, companies can have an impact by encouraging consumers to use their products in a sustainable way.

Producers and retailers should look at conducting a comprehensive life-cycle review of products to not only reduce unnecessary packaging where possible but also to identify more sustainable packaging alternatives, like recycled or biodegradable materials. Continued investment in research and development will be needed to identify solutions that are scalable and cost-effective.

Organic and ethically sourced products

Canadians care about how their products are produced. The survey revealed that 46% were willing to pay a premium for organic food items, 33% for ethical and environmental considerations and 34% for brands known for their sustainability practices.

As customer demands grow, food retailers and operators will need to demonstrate product traceability and transparency to build trust with their customers through authentic and credible sustainable product claims. As we explored in Saveurs, emerging technologies, like blockchain and the Internet of Things, are expected to revolutionize supply chains, enabling greater transparency, credibility and accountability while empowering consumers to make informed decisions when buying products with environmental, ethical and health-related attributes.

 

Both retailers and producers will need to start asking suppliers some challenging questions about their sustainability practices, third-party audits and product certifications. Recognizing the complexity of supply chain challenges, deep collaboration with suppliers will be needed to assess and improve sustainability sourcing practices.

The bottom line

The 2019 Consumer insights survey clearly demonstrates that manufacturers and retailers need to pay attention to what consumers are saying about environmental sustainability if they’re going to keep current customers and attract new ones.

The next generation (generation Z) merits particular consideration. Even more than millennials, this generation wants to take action on social and environmental issues by putting their money where their mouth is. For example, 47% of those aged 18 to 24 said they’re willing to pay a premium for environmentally friendly food offerings, which was higher than the 35% finding for respondents between the ages of 25 and 34.

 

At the same time, companies need to view sustainability as something that’s attainable for all. For example, can producers find ways to make more sustainable packaging at a lower cost? Are retailers willing to absorb some of this cost, change their distributor relationships or take another look at their supply chain?

Many businesses are already responding to customer demands by looking to their supply chain to cut costs, promote efficiencies and, in general, become more sustainable. Clearly, sustainability can no longer be seen as a nice feature to add to a product. It’s quickly becoming the way of doing business.

Takeaways

  • To meet consumer demands, Canadian companies need to think about reducing packaging, especially plastic.
  • Food retailers should look at placing greater emphasis on, and investing in, locally sourced, organic and ethically produced products as part of their strategic road maps.
  • Building trust and transparency through third-party audits and performance management will be important to ensure the traceability of products across the entire value chain.
  • High-income earners and generation Z are most willing to pay more for environmentally sustainable products. To broaden their market, companies can gain insights by better understanding demographic and geographic profiles and then strategically position their sustainable product offerings.
     

Contact us

Janice Noronha

Janice Noronha

Partner, Risk Assurance Services, PwC Canada

Tel: +1 514 205 5693

Follow PwC Canada