The ethical market has increasingly moved away from its beginnings as a niche area catered for by a few specialist brands, towards the mass market mainstream. Food certification and other ethical labels are now an everyday feature of products sold across Europe and North America, popularised by greater consumer awareness and wider distribution. ‘The Future of Ethical Food and Drinks: Growth opportunities in organic and sustainable products and packaging’ is a new management report published by Business Insights that analyzes core areas of the ethical sector such as organic and Fairtrade food and drink and how the ethical remit is widening into a number of other areas including ethical packaging, food miles, additives and GMOs. It also examines market penetration of ethical products and the strategies adopted by multinationals in response to this emergent and increasingly important determinant of buyer behaviour. Identify future growth opportunities in the ethical food and drinks market and create more effective marketing and NPD strategies to exploit this growth with the help of this new report.

Table of Contents
The Future of Ethical Food and Drinks
Executive Summary 10
Key drivers of ethical food and drinks 10
Ethical food and drinks market development 11
Innovation and NPD in ethical food and drinks 12
Industry survey 13
Conclusions and future development 14
Chapter 1 Ethical initiatives in food and
drinks 16
Introduction 16
Key initiatives 17
Trading fairly with developing countries 17
Sustainability 19
Food safety 20
Animal welfare 21
Packaging, pollution and the environment 21
Chapter 2 Key drivers of ethical food and
drinks 24
Summary 24
Introduction 25
Consumer demand for ethical products 25
Purchasing ethical products and ethical issues 26
Organic food and drink consumers 31
Supply-side drivers of ethical food and drink 34
Ethical private label 34
Private label Fairtrade 36
The importance of certifiers 38
Packaging and the environment 40
Growing pressure to reduce packaging 40
Pollution 42
Packaging, pollution and ethical food and drink marketing 43
Chapter 3 Ethical food and drink market
development 46
Summary 46
Introduction 47
Fairtrade products 47
Coffee still dominates the Fairtrade market 50
The overlap between Fairtrade and organic 54
Organic food and drink 54
Key sectors of the organic market 56
Ethical becomes mainstream 57
Current and future market penetration of Fairtrade 58
Organic moves into the mainstream 60
Chapter 4 Innovation and NPD in ethical
food and drinks 64
Summary 64
Introduction 65
Growth in new ethical product launches 65
Category analysis 67
Regional analysis 69
Product tag analysis 72
Ethical claims 74
Ethical NPD 76
Organic 78
Fairtrade 79
Local sourcing 85
No added hormones and no antibiotics 87
No genetic modification 90
No additives 92
Ethical packaging 93
Recycled materials 96
Reduced packaging 98
Biodegradable packaging 99
Chapter 5 Industry survey 104
Summary 104
Introduction 105
Driving the uptake of ethical food and drink 105
Consumer attitudes 105
Key influencers 107
Retailer initiatives 108
Manufacturer initiatives 111
Key features 112
Price premiums of ethical products 114
Leading categories and regions 116
Key categories 116
Leading regions 118
Company strategy 119
Development strategies 119
Leading company types 120
Leading ethical brands 122
Chapter 6 Conclusions and future
development 126
Summary 126
Introduction 127
Ethical initiatives SWOT analysis 127
Consumer demand 128
Ethical product marketing 128
Towards a wider ethical remit 129
Investment in the ethical sector 130
Growing use of ethical labels 131
Acquisition of ethical brands 132
Index 134
List of Figures
Figure 1.1: Ethical initiatives in food and drink 16
Figure 1.2: Fairtrade badges in Europe and the US 18
Figure 1.3: Rainforest Alliance certification 18
Figure 1.4: Marine Stewardship Council Blue Ecolabel 20
Figure 2.5: Choosing natural organic food and drinks rather than standard variants over the past
year, by household income, 2006 33
Figure 2.6: Ethical private label development 35
Figure 2.7: Carbon Label use by Innocent Smoothies 43
Figure 3.8: Fairtrade expenditure and growth by country, 2001-2006 49
Figure 3.9: Fairtrade growth by product sector, Europe and North America, 2001-2006 50
Figure 3.10: % share of total category sales that are organic, Europe and US, 2000-2010 57
Figure 4.11: % growth in ethical products launched by category, 2005-2007 66
Figure 4.12: % share of ethical food and drinks launched by category, 2005 and 2007 67
Figure 4.13: % of food and drinks products in each category launched that are ethical, 2005 and
2007 69
Figure 4.14: % share of ethical products launched, by region, 2005 and 2007 70
Figure 4.15: % share of ethical products launched by claim, 2005 and 2007 74
Figure 4.16: % share of products that make the organic claim on other ethical products launched,
2007 76
Figure 4.17: % share of organic & Fairtrade food and drinks launched by category, 2005 and 2007
77
Figure 4.18: Knorr Bio Gemüse, Lidl Fairglobe Café del Mundo and Carrefour AGIR Bio tea 79
Figure 4.19: Sainsbury’s So Organic Fairtrade Chocolate and Trader Joe’s Organic Fair Trade
Breakfast Blend Coffee 80
Figure 4.20: Nescafé Partners’ Blend and Ben & Jerrys Vanilla Fairtrade ice cream 81
Figure 4.21: Ethichoco mousse cake, Nature’s Path Organic Toaster Pastries and Doves Farm
Fairtrade cereal bars 82
Figure 4.22: EcoNugenics MycoKidz and Steaz Energy Organic Fuel 83
Figure 4.23: Bart Fairtrade and Equal Exchange cranberries 84
Figure 4.24: Eat Local and Little Bug Baby Food 86
Figure 4.25: Ben & Jerry's milkshakes, Oh Boy! Oberto Organic Beef Jerky and Campbell's
Organic Chicken Broth 88
Figure 4.26: Earth's Best Sesame Street Ravioli and Tegel Ready to Grill 89
Figure 4.27: Odwalla Choco-Walla and Blue Band Soja Halvarine 91
Figure 4.28: % share of food and drinks launched that make ethical packaging claims by category,
2005 and 2007 95
Figure 4.29: Love Body and Chips Ahoy! 97
Figure 4.30: Jogurt Danone and Adnams Beer 99
Figure 4.31: Saphara Tea, Numi Organic Iced Tea, Belu water and Annie Chun’s Kung Pao 100
Figure 5.32: The importance of consumer attitudes in driving uptake of ethical food and drink 106
Figure 5.33: The importance of key groups as drivers of the uptake of ethical food and drinks 107
Figure 5.34: The importance of retailer initiatives in changing consumer attitudes towards ethical
products 109
Figure 5.35: The importance of manufacturer initiatives in changing consumer attitudes towards
ethical products 112
Figure 5.36: The importance key features will have on influencing consumers to purchase ethical
products over the next 5 years 113
Figure 5.37: How much of a premium are consumers willing to pay for products with an ethical
positioning? 114
Figure 5.38: The importance of ethical food and drink in key product sectors in the next 5 years
compared to today 116
Figure 5.39: Prevalence of ethical food and drinks by region 118
Figure 5.40: Ethical product development strategies over the next 5 years 119
Figure 5.41: Companies that have the most influence on innovation in ethical food and drinks today
and will have in the next 5 years 121
Figure 6.42: SWOT analysis of ethical initiatives 127
List of Tables
Table 2.1: Buying of ethical or socially-responsible grocery items over the last year, by country,
2006 26
Table 2.2: Buying of ethical or socially-responsible grocery items over the past year, by
generational cohort and country, 2006 27
Table 2.3: Influence on purchasing behavior and awareness of issues regarding food and drink,
2006 29
Table 2.4: Organic food users as % of the total US and European population, 2000-2010 32
Table 2.5: European Fairtrade private label development since 2000 36
Table 3.6: Sales of Fairtrade products by country, €m, 2001-2006 48
Table 3.7: Sales of Fairtrade coffee and other products by country, €m, 2001-2006 51
Table 3.8: Fairtrade market by product type, Europe and North America, 2004 & 2006 52
Table 3.9: Organic market value by country, $bn, 2000-2010 55
Table 3.10: Value of US and European organic food and drink by product category, $bn, 2000-
2010 56
Table 3.11: Fairtrade market forecasts, €m, 2006-2011 59
Table 3.12: Sales by value of organic products as % total national category sales, 2005 60
Table 3.13: Forecast sales by value of organic products as % total national category sales, 2010 62
Table 4.14: Top 10 product tags on ethical food and drinks launched, 2005-2007 72
Table 5.15: Top ten ethical food and drink manufacturers 122
Table 6.16: Key ethical acquisitions since 2000 132