Sustainability is one of the great trends in the food retail sector, according to a report by McKinsey & Company
MADRID, 3 Apr. (EUROPE PRESS) –
Spanish consumers are more inclined to pay a higher price for food in 2022 if it is sustainable, compared to German, British or Dutch consumers, according to a report by McKinsey & Company and EuroCommerce, which says this is one of the trends that the food retail sector will follow in the coming years.
The Spanish are, together with the Poles, French and Swiss, the most likely to make this type of decision among consumers in the nine European countries included in the study ‘The State of Grocery Retail 2022: Navigating the Market Headwinds’.
When asked if in 2022 they will be more or less likely than last year to pay more for food with less impact on the environment, the Poles and the French are the ones with the highest percentages, with 9% and 8 %, respectively.
Behind are the Spanish and the Swiss, with 6%, followed by the Swedes (4%) and Italians (3%), all of them above the average (2%), while those less convinced of paying a higher price for sustainable food this year are the Dutch (-9%), the British (-5%) and the Germans (-3%).
These data come from a survey of more than 12,000 consumers in the nine countries mentioned between December 2021 and January 2022, before the Russian war against Ukraine began, so the report does not include the impact of the conflict.
DIFFERENT ATTITUDES ACCORDING TO INCOME LEVEL
Ignacio Marcos, senior partner at McKinsey who leads the consumer area in Spain and Portugal, explained to Europa Press that “sustainability is one of the major trends for both the sector and the consumer”. “The ‘retailers’ that bet on expanding their offer and giving it greater visibility at the point of sale will be able to benefit from this trend”, he pointed out.
According to the report, it is mainly high-income consumers, younger generations and larger households who plan to buy more healthy, premium and sustainable products.
For example, the study values the willingness of consumers with higher incomes to pay more for sustainable products at 15% now compared to 2021, compared to -9% attributed to families with fewer resources.
CONSUMERS AND INVESTORS DEMAND SUSTAINABILITY
Summarizing the conclusions of the McKinsey report, Marcos stated that, after the positive impact of the coronavirus pandemic in terms of sales and income, the food sector is facing a complex year throughout Europe due to inflation, the growing sensitivity to prices and increased competition.
However, these changes “also provide new opportunities for the sector if investment is made both in terms of supply and at the level of the operating model.”
“Maintaining the investment in the supply of private labels and expanding the range of healthy and sustainable products, the demand for which is increasing, together with a greater commitment to the online channel and the search for new sources of income, are some of the current opportunities” , has commented.
According to McKinsey, consumers, investors, regulators and NGOs are putting pressure on companies in the food sector to move towards greater sustainability, since the food system is responsible for 34 percent of the greenhouse gas emissions that are produced. produce in the world.
GENERATE CHANGES THROUGHOUT THE VALUE CHAIN
These companies, therefore, “must develop strategic plans for the transition to sustainability focused on value creation and analyze what role they can play in promoting change throughout the value chain”, since much of the impact on sustainability ” comes from interactions with suppliers and customers”, adds the consultant.
Taking decarbonization as an example, McKinsey details that most greenhouse gas emissions are generated along the value chain: 32% come from land use, 39% from agricultural production, 4% from food processing and 6% from packaging.
For this reason, he proposes that companies that sell food focus on two aspects. First of all, reduce your own carbon footprint and optimize your operations: from improving the energy efficiency of stores to consuming green energy and redefining refrigeration technologies or logistics.
Second, in terms of the value chain, take actions such as requiring transparency requirements for all products, modifying product selection (for example, introducing low-emission alternatives), adjusting specifications, supporting farmers who are reducing their emissions or favoring suppliers with a lower carbon footprint.
LESS RISKS AND GREATER COMPETITIVE ADVANTAGE
McKinsey underlines in its report that food companies can benefit from this transition process because “sustainability can go hand in hand with value creation”.
Thus, he affirms that, if companies improve their ESG criteria (on environmental, social and governance factors), they will have fewer difficulties in accessing capital and financing themselves, they will run a lower risk of losing customers to more sustainable competitors and they will avoid having to pay carbon taxes that could eventually be levied on food.
In addition, the consultancy points out that sustainability strategies can give companies “a competitive advantage” and allow them to “take advantage of new opportunities.”
These include gaining market share and expanding its margins by differentiating itself through sustainability, launching innovative disruptions in the field of sustainability, reorienting its business portfolio towards sustainability beyond its own field of operations, and prioritizing the options of greater economic efficiency in its investments in sustainability.