Surveys show increased interest in sustainable brands, yet sales lag behind expectations

Despite consumer surveys suggesting that sustainability has become a driving force behind food purchases, brands that prioritize sustainability in their practices are not being bought at expected rates, according to a webinar hosted by C.A. Fortune and SPINS.

Reasons behind lower levels of purchases include higher prices hindering the ability of some consumers, products not being distributed near consumers, as well as some consumers expressing skepticism about the performance of sustainable products compared to their conventional alternatives.

In an effort to keep tabs on the food industry trends that are shaping 2024 and beyond, C.A. Fortune and SPINS teamed up to host their virtual State of the Industry quarterly webinar. The event honed in on current food inflation and sales indexes, current consumer beliefs and dieting trends, and how sustainability practices are shaping shopping habits.

Beginning with C.A. Fortune’s analysis of sales trends, retail sales show a slight increase in the last quarter, with dollars up a total of 2% and total units sold up 1% across the industry. Sales performed well in January 2024 before leveling off in February and dropping slightly in March.

Additionally, the consumer price index (CPI) for total food is slightly higher compared to a year ago, with the fast food industry driving more inflation than the grocery industry. 

“The positive news for our industry is that food away from home is actually driving those increases, with the fast food sector being up about 5%. Food at home, which is food purchased from the grocery store and brought home, only increased by about 1.2%,” says Jessica Schmidt, the senior vice president of Business Intelligence at C.A. Fortune. “This can present an opportunity for our retailers and our brands to really capitalize on consumers who are looking to save by purchasing food and then cooking it at home.”

Schmidt also says that the potential consumer behavior shift toward buying more food from the grocery store can be a win-win for the industry. Consumers can justify eating healthier by avoiding fast food while saving money, so long as both retailers and brands continue to encourage purchasing behavior through promotions and offering easy meal solutions.

Consumer behavior is also having an impact on the industry in terms of both diets and personal beliefs. The Mediterranean diet, which focuses on eating plant-based foods and healthy fats, continues to be the most popular diet amongst consumers. Additionally, shoppers are increasingly aware of food certifications, with USDA Organic and The Non-GMO Project being the most recognizable.

These food certifications come with tremendous benefits, as consumers believe these certifications are beneficial for both their personal health and the environment.

“66% of all shoppers recognize Non-GMO Project verified labels, which is up over 12 points since 2019, so the shopper in general is looking increasingly for this,” says Schmidt. “Gen Z has the highest likelihood of buying items with certifications for non-GMO at 71%. For USDA Organic, it’s at 79%. The millennial generation impact is around the willingness to pay a premium, with 71% willing to pay extra for a Non-GMO Project verified label.”

In addition to food certifications, brand sustainability is playing a larger role in consumer practices as well, despite not always guaranteeing sales. Norine Rudnicki, insight manager at SPINS, says that sustainability has become a crucial market driver, with sustainable products growing faster than conventional ones. Additionally, many consumers now prioritize sustainability when it comes to both brand loyalty and integrity.

To become more sustainable, it’s recommended that brands balance plastic and food waste reduction. On top of that, addressing both food and packaging waste streams is necessary for optimal environmental results. 

“It’s really not an either-or proposition, we have to really address both of those waste streams in order to really get those best environmental results and really continue on our pathway for sustainability,” Rudnicki says. “A third of shoppers are viewing recycling, ethical sourcing and zero-waste goals as extremely important.”

In short, shoppers have expectations, and want to support brands that are not only better for themselves, but also for the planet. Schmidt says that it’s crucial for both brands and retailers to do their best in eliminating any barriers that consumers may face to achieve those ideals. Additionally, if a brand makes a promise, it must deliver on that promise, or it risks losing its consumers. By keeping brand messaging consistent and easy to understand, trust is built with consumers. 

The next C.A. Fortune/SPINS State of the Industry webinar will be held on July 19, 2024.