Ecolabel market to grow by 66%, and will become more powerful than regulation, say Danish researchers
The largest labelling schemes, like organic and Fairtrade, will also have to evolve, expanding their scope to encompass issues such as carbon emissions and greener packaging, said Jakob Zeuthen, environmental policy director at the Danish Chamber of Commerce.
Zeuthen and his co-researcher Lars Ludvigsen, owner of communications firm PR Partner, have spent a year studying the market for ecolabels. They’ve also polled 152 Danish companies from five industries, including food and drink, and interviewed 50 firms as well as experts from certification schemes like Fairtrade.
The full results will be published later this year in a book called MÆRK, meaning label. But this week Zeuthen spoke to FoodNavigator as he prepared to present some of the initial findings at the Sustainable Brands conference in Copenhagen.
The pace of regulation is “slow” he explained, especially when it is has to cover everything from climate change and food waste to resource use and taxation. As such, labelling schemes will become even more important for food companies looking to differentiate themselves from the competition and “get ahead” on certain sustainability issues. In the coming years the power of labels will actually outstrip that of new laws, he claimed.
By 2030, Zeuthen and Ludvigsen, forecast that the global market for these labels will grow from around 450 or so today to 600 by the end of the decade and then 750 by 2030. More than 50% of the firms they quizzed said the number of labels would only continue to grow. Just 20% expect stronger regulation on sustainability, though this rises amongst those in the food sector, which is “already heavily regulated”.
New labels
What issues will be at the centre of this new wave of ecolabels? Climate change, food waste, taxation and animal welfare are all demanding attention from consumers Zeuthen said. Regulation on many of these is some way off, which means brands will look to labels to plug the gap.
“There will [be] more labels on food and different labels on different product categories,” he explained. “Retailers will introduce their own ‘local labels’,” he added, “and I also believe in a label ‘raised on probiotics’ [will be] an alternative to conventionally-produced food.” This, he said, stems from the close attention that consumers, companies and politicians are currently paying to the use of antibiotics.
Some 69% of Danish consumers use labels as a buying parameter, according to a survey back in May by the country’s Chamber of Commerce. Meanwhile, the interviews Zeuthen and Ludvigsen have carried out, show that companies are “clearly influenced” by what’s in the media and by ongoing political discussion.
Media exposure means that, almost overnight, issues can jump up the queue of new labelling priorities. “The more an issue was discussed in the media the more they believed a label [would come],” Zeuthen said.
Organic’s 25% share
But what do all these new labels mean for the established schemes like organic and Fairtrade? Organic will actually become mainstream by 2030, the researchers predict, with market share hitting 25% in Denmark. Currently, it’s 9.9% in food retail and growing by 12% to 13% a year. By 2050, organic will command a 50% share of the Danish food retail market, Zeuthen claimed – but to reach that level of penetration the label will need to evolve.
“In 2050 we move into the ‘unconscious era’ of labelling,” he continued, “meaning that […] when you are looking around the shelves you see as many or more labelled products than non-labelled. [At that point, consumers won’t] look for the ‘big label’ [like organic] anymore because they just expect it to be there.”
This could mean organic has to couple with other labels to maintain awareness. It could, for example, be paired with information on carbon footprints or local labels, or indeed “environmentally friendly” packaging. Carbon footprint labels will be particularly relevant for meat and milk products, Zeuthen predicts, noting that the European Commission is trying to simplify environmental labelling in certain sectors, like food.
