Ethics and the Irish Consumers - Ireland

Published by: Mintel International Group Ltd.

Published: Sep. 1, 2009 - 171 Pages

Table of Contents

ISSUES IN THE MARKET

Key themes in the market

Definitions

Abbreviations

INSIGHTS AND OPPORTUNITIES

It’s cost, not principles, that drives ethical and environmental behaviour

Consumers need help to ‘connect the issues’

Could lack of trusted certification be inhibiting growth?

Untapped potential demand for ethical/green financial products

SECTOR IN BRIEF

Both NI and RoI economies still in recession

Disposable income and consumer spending continuing to decline

Consumer concerns switch from ethical to economic

Increased price-consciousness on account of downturn

Awareness and knowledge of ethical issues increasing

Ethical food and drink sector to experience slowdown in growth

Ethical clothing growing in stature - but obstacles remain

Preference among consumers for disposable over durable clothing

Interest in ethical finance still niche, but likely to grow

Outlook positive for ethical investments

Eco-tourism to suffer in line with overall tourist sector

Profile of ethical tourism increasing, but confusion remains

Irish consumers want more from their holidays, which bodes well for ethical tourism

More interest in ethical issues among RoI consumers

Food production issues not a huge worry for Irish consumers

Local ethical/environmental issues of greatest concern in NI

Global environmental issues of more concern to RoI consumers

Human welfare-related issues of concern to all consumers

Issues related to corporate behaviour not high on consumers’ agenda

Cost-cutting, not ethics, driving ethical behaviour

ABC1s and women more ethical than C2DEs and men

71% of RoI consumers and 52% of NI consumers are ethically-minded

FAST FORWARD TRENDS

Trend 1: Customisation

What's it about?

What we've seen

Specifics

What next?

Trend 2: Greenfluencers

What's it about?

What we've seen

What next?

INTERNAL MARKET ENVIRONMENT

Key points

Recession-battered consumers more price-focused

Figure 1: Agreement with selected shopping-related statements, RoI & NI, April 2009

Value for money the main concern for Irish consumers

Low-cost doesn’t necessarily mean unethical production

Some correlation between ethically-minded and cost-cutting consumers

Figure 2: Correlation between ethically-minded and cost-cutting consumers, by key demographics, RoI, 2008-09

Figure 3: Correlation between ethically-minded and cost-cutting consumers, by key demographics, NI, 2008-09

Consumers paying more attention to what they eat

Strong awareness of ethical issues

Food scares likely to sharpen focus further

Danger that price wars could force retailers to cut corners

When ‘ethical’ isn’t ethical at all

Cynicism over recent trend of selling-out by ethical ‘champions’

BROADER MARKET ENVIRONMENT

Key points

All-Ireland economy firmly in recession

Figure 4: Economic outlook, RoI & NI, 2008-10

RoI

NI

Rising unemployment in both economies

RoI

NI

Disposable income levels in decline

RoI

NI

Consumer spending set to decline further

RoI

NI

Consumer confidence close to recent lows

RoI

NI

Economic worries usurping ethical concerns

Economic over ethical issues

Irish consumers recognise the seriousness of climate change

Irish consumers proactive on climate change

Green Party political meltdown could remove environmental impetus

STRENGTHS AND WEAKNESSES

Strengths

Weaknesses

FOOD AND DRINK

Key points

SALES PERFORMANCE

Slowdown in organic sector growth for 2009-11

Figure 5: Estimated value and forecast of the organic market, IoI, RoI & NI, 2003-13

Fair Trade sector faring better

Opportunity for farmers’ markets to increase sales

Local produce to lose out during recession

IMPACT OF RECESSION/INCREASED PRICE-CONSCIOUSNESS

Likely impact of increasing price-consciousness on organic sales

Is fair trade recession-resilient?

Figure 6: Consumers’ response to ‘Has the economic situation reduced either the number of or the frequency with which you buy Fairtrade Mark products?’, NI & RoI, April 2009

But most consumers remain unconvinced

SECTOR DEVELOPMENTS

Difference between organic and non-organic narrowing

Fair trade now mainstream

New product developments prudently emphasizing health benefits

CLOTHING RETAILING

Key points

SALES PERFORMANCE

Ethical clothing may prove more resilient to recession

Figure 7: Market value and forecast, clothing retailing, Ireland, 2003-13

THREATS AND OPPORTUNITIES

Positive coverage to keep issue on consumer agenda

Perception that ethical clothing just isn’t cool being addressed

Mainstream retailers embracing ethical fashion

Lack of understanding inhibits willingness to pay premium

Doubts among consumers as to whether ethical is good value

Doubts as to whether ethical is all it claims to be

CONSUMER BEHAVIOUR

Consumer data indicates a preference for disposable over durable clothing

Figure 8: Agreement with selected statements on clothing and clothing purchases, NI & RoI, 2008

Figure 9: Agreement with selected statements on clothing and clothing retailing, NI & RoI, 2008

Trend for cheap, disposable clothing likely to grow during recession

…but thrift can - sometimes - be ethical

Only a minority of consumers admit to being entirely disinterested

… but (consumer) actions speak louder than words…

FINANCE

Key points

SECTOR BACKGROUND

Growing but limited interest in ethical finance

Ethical investment the notable exception…

Growth in ethical finance surpassing other ethical sectors

RECENT DEVELOPMENTS

Green agenda central to global economic recovery

… but danger of bubble forming on back of fiscal stimulus

Cynicism over financial institutions’ claims…

… but ethical commitment could ‘redeem’ financial institutions

Experts anticipate interest in Sharia-compliant investment funds

OUTLOOK FOR ETHICAL INVESTMENT

Performance and security critical in current climate

Figure 10: Year-to-date performance, ISEQ overall index vs selected ethical/SRI funds, RoI, September 2009

Perception that ethical investments more vulnerable to volatility

Liberal use of ‘ethical’ threatens credibility

Equities could benefit from being ‘the best of a bad lot’

Outlook for ethical investments seems positive

MACRO DEVELOPMENTS

Leadership from the top as RoI government goes ethical

Global trend towards responsible investment

TRAVEL

Key points

Economic downturn will inevitably affect eco-tourism

Ambiguity of terms results in consumer confusion

Initiatives raising awareness of travel’s impact on environment

Declining interest in ‘empty’ holidays

Domestic tourism unlikely to gain much from recession

… but low-cost domestic holiday options undergoing revival

DO IRISH CONSUMERS REALLY CARE?

Key points

Figure 11: Percentage of consumers that feel strongly about selected green/ethical issues, NI & RoI, August 2009

More interest in ethical issues among RoI consumers

Food production issues of limited concern to Irish consumers

Figure 12: Percentage of consumers who feel strongly about genetically modified foods, NI & RoI, by gender and age, August 2009

Figure 13: Percentage of consumers who feel strongly about intensive farming methods, by gender and socio-economic group, NI & RoI, August 2009

Charity begins at home for NI consumers

Figure 14: Percentage of consumers who feel strongly about supporting local charities, by gender and age, NI & RoI, August 2009

Drowning in packaging

Figure 15: Percentage of consumers who feel strongly about excessive packaging on groceries, by gender and socio-economic group, NI & RoI, August 2009

Global environmental issues worrying RoI consumers

Figure 16: Percentage of consumers who feel strongly about climate change, by gender and age, NI & RoI, August 2009

Plight of overseas workers and fair trade feature strongly in consumers’ concerns

Figure 17: Percentage of consumers who feel strongly about the exploitation of workers/children in developing countries and fair trade, NI & RoI, August 2009

Corporate behaviour of little concern to Irish consumers

Figure 18: Percentage of consumers who feel strongly about the responsible advertising of alcohol or unhealthy food, by gender and work status, NI & RoI, August 2009

Impact of multinational chains on local retailers of no concern

IRISH CONSUMERS’ ETHICAL BEHAVIOUR

Key points

Figure 19: Green or ethical issues that consumers participate in, NI & RoI, August 2009

Ethical behaviour led by financial prudence more than principles

Figure 20: Average rates of participation in green/ethical issues according to cost-implications for consumers, NI & RoI, August 2009

ABC1s most likely to ‘put their money where their mouths are’

Figure 21: Participation in selected green or ethical issues, by socio-economic group, NI, August 2009

Figure 22: Participation in selected green or ethical issues, by socio-economic group, RoI, August 2009

Age of revolutionary students is no more

Figure 23: Participation in selected green or ethical issues, retired consumers vs. students NI, August 2009

Figure 24: Participation in selected green or ethical issues, retired consumers vs. students RoI, August 2009

The fairer sex in all respects

Mismatch between words and deeds

Figure 25: Comparative analysis between conviction and action, selected ethical issues, NI & RoI, August 2009

CONSUMER TYPOLOGIES

Key points

NI

Figure 26: NI consumer typologies, August 2009

Waste Warriors

Not Ethically Minded

Eco Advocates

All Talk, No Action

ROI

Figure 27: RoI consumer typologies, August 2009

Humanists

Sceptical

Eco Warriors

Ethical Advocates

APPENDIX - INTERNAL MARKET ENVIRONMENT

Health awareness among consumers

Figure 28: Agreement with statement, ‘I don’t pay sufficient attention to what I eat’, NI & RoI, 2007 and 2008

Consumer awareness of food labels

Figure 29: Consumer awareness of food labels, RoI, 2008

APPENDIX - BROADER MARKET ENVIRONMENT

Consumer confidence

Figure 30: Consumer confidence, RoI, June 2008-June 2009

Figure 31: Consumer confidence (seasonally adjusted), UK (incl. NI), June 2008-June 2009

Figure 32: Present situation index, UK (incl. NI), June 2008-June 2009

Figure 33: Consumer confidence (3-month moving average), RoI, June 2004- June 2009

Consumer concerns over environment: Ireland, UK and Europe

Figure 34: Issue deemed to be “the most serious problem currently facing the world as a whole”, EU27, 2008 and 2009

Figure 35: Issue deemed to be “the most serious problem currently facing the world as a whole”, EU27, UK & RoI, Spring 2009

Figure 36: Agreement with “There is too much concern for the environment”, NI & RoI, 2003-08

Figure 37: Response to “how serious a problem do you think climate change is at the moment?” EU27, RoI & UK, Spring 2009

Figure 38: Consumers who personally have taken actions aimed at helping to fight climate change, EU27, UK & RoI, Spring 2009

Green Party election results: RoI

Figure 39: Local election results, RoI, 2004 and 2009

APPENDIX - FOOD AND DRINK

Organic produce

Figure 40: Estimated value and forecast of the organic market, IoI, RoI & NI, 2003-13

Figure 41: Typical supermarket price difference between organic and standard produce, 2008

Figure 42: Agreement with “It’s worth paying more for organic food”, NI & RoI, 2003-08

Fair trade products

Figure 43: Fair trade retail sales market value and forecast, RoI, 2003-13

Figure 44: Agreement with “I buy fair trade products when available,” NI & RoI, 2003-08

Local produce

Figure 45: Agreement with selected statements related to local produce, NI & RoI, 2008

New product launches

Figure 46: Number of ethical new product launches, by top ten claims, food and drink (incl. alcohol), UK and RoI, 2003-09

APPENDIX - CLOTHING RETAILING

Figure 47: Market value and forecast, clothing retailing, Ireland, 2003-13

Figure 48: Selected attitudes to ethical clothing, UK, November 2008

APPENDIX - FINANCE

Figure 49: Top five most important factors when choosing a current account, NI and RoI, 2008

Figure 50: Top five most important factors when choosing a savings account, NI and RoI, 2008

Figure 51: Percentage increase in consumer spend on ethical products, UK, 2007-08

Figure 52: Comparative performance, FTSE4Good Global Index vs. FTSE Developed Index, July 2009

Figure 53: Comparative industry weights, %, FTSE4Good Global Index Vs. FTSE Developed Index, July 2009

Figure 54: Comparative volatility, FTSE4Good Global Index vs. FTSE Developed Index, July 2009

Figure 55: Key drivers for SRI demand over coming three years, Europe, 2008

APPENDIX - ETHICAL TOURISM

Figure 56: Agreement with ‘When on holiday, I only want to eat, drink and sunbathe’, NI & RoI, 2003 and 2008

Green or ethical issues that consumers participate in

APPENDIX - CONSUMER TYPOLOGIES

Figure 57: Consumer typologies, by demographic breakdown, NI, July 2009

Figure 58: Consumer typologies relating to green or ethical issues respondents feel most passionately

about, and green or ethical activities respondents personally participate in, NI, July 2009

Figure 59: Consumer typologies, by demographic breakdown, RoI, July 2009

Millward Brown tables

Figure 60: Consumer typologies relating to green or ethical issues respondents feel most passionately

about, and green or ethical activities respondents personally participate in, RoI, July 2009

Figure 61: Green or ethical issues respondents feel most passionately about, NI, August 2009

Figure 62: Green or ethical issues respondents actively participate in, NI, August 2009

Figure 63: Green or ethical issues respondents feel most passionately about, NI, August 2009

Figure 64: Green or ethical issues respondents feel most passionately about, NI, August 2009

Figure 65: Green or ethical issues respondents actively participate in, NI, August 2009

Figure 66: Green or ethical issues respondents actively participate in, NI, August 2009

Figure 67: Green or ethical issues respondents actively participate in, NI, August 2009

Figure 68: Green or ethical issues respondents feel most passionately about, RoI, August 2009

Figure 69: Green or ethical issues respondents feel most passionately about, RoI, August 2009

Figure 70: Green or ethical issues respondents actively participate in, RoI, August 2009

Figure 71: Green or ethical issues respondents actively participate in, RoI, August 2009

APPENDIX: RESEARCH METHODOLOGY

Abstract

What role do Ethics play in a more Price-Conscious environment?

Mintel’s consumer data indicate that most consumers are motivated by cost-savings rather than conviction when factoring ‘ethical’ or ‘environmental’ issues into their purchasing behaviour or general lifestyle.

Both among NI and RoI consumers, the top three ethical or green acts that consumers participate in - recycling, avoiding food waste and saving energy in the home - are acts that, while certainly environmentally-positive, also entail cost-savings for the consumer.

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