Ethical Food and Beverage, Personal Care and Household Products in the U.S.; Conscientious Consumerism and Corporate Responsibility in the New Economy, 2nd Edition

Ethical Food and Beverage, Personal Care and Household Products in the U.S.; Conscientious Consumerism and Corporate Responsibility in the New Economy, 2nd Edition

Despite the economic downturn of 2008-2009, ethical grocery products are continuing to make headway in the market, especially when contrasted with the relatively flat market for conventional groceries. Indeed, by many accounts, consumer demand is steadily increasing for products that fulfill eco-friendly, natural, organic, local, humane, and fair trade criteria. Major marketers and retailers are increasingly tapping into this trend by offering more ethical products, upping their corporate responsibility efforts through energy-efficient “green” facilities and sustainable business practices, and increasing their associated cause-related marketing efforts.



Underpinning market advancement is ongoing strong consumer demand for products perceived to be healthier and safer. According to Packaged Facts’ February 2009 consumer poll, approximately one-fourth of U.S. adult shoppers frequently buy certified organic food or beverage products, and one-third are usually willing to pay more for organic foods—even in the midst of economic recession. Featuring exclusive consumer data from this survey, the report homes in on food and non-food purchasing trends as well as attitudes and demographic characteristics of ethical product purchasers.



Building on the analysis presented in the previous edition, the report also examines key issues and trends affecting the marketplace across two classifications—Foods & Beverages, and Non-Food Products—with the latter defined as encompassing personal care products (cosmetics, skin care, hair care, etc.) and household products (paper goods, diapers, detergents, cleaning products, light bulbs, etc.). Coverage includes historical and projected retail sales estimates from 2005 through 2014, case studies of key marketers and retailers, and trends in new product development and competitive positioning. Also covered are government regulations and certifying organizations, mergers and acquisitions, retail trends, eco-conscious demographic profiles, and international trends.



Additional data sources include Information Resources, Inc.’s InfoScan Review for the mass-market channel, Datamonitor Product Launch Analytics data tracking new product introductions, and Experian Simmons data profiling consumer attitudes and product purchasing behavior.

Chapter 1: Executive Summary

Scope & Methodology

Focus on Food and Non-Food Products

Report Methodology

Key Ethical Issues

International Trends

Organic Agriculture More than Doubles

Ethical Consumerism Mostly in Developed Nations

Ethical Consumerism Strong in the U.K.

Global Ethical Product Launches Top 5,100

U.S. Market Size and Composition

Retail Sales of Ethical Products at a Record High

Food and Beverage Classification Dominates Retail Sales

Natural Foods Channel Generates Almost Half of Retail Sales

Figure 1-1: Share of U.S. Ethical Products Retail Sales by Classification, 2005 vs. 2009 (percent)

Market Outlook

A Greener Administration

LOHAS: A Potent and Growing Consumer Base

Consumers Expect Corporate Responsibility

Consumers Willing to Pay More for Sustainability

Major Corporations Getting More Involved

Cause Marketing Takes Off

Healthy Sales Growth Projected Through 2014

Competitive Overview

Top Ethical Product Marketers

Acquisitions Yield Consolidation, Credibility Issues

The Most Ethical Companies and Brands

Over 2,100 New U.S. Products Annually Bear Ethical Claims

Organic, Natural Lead New Product Claims

Figure 1-2: Top 10 Ethical Claims by Number of U.S. Ethical Product Launches, 2005, 2008 and 2009

Natural Supermarkets Set the Pace

Consumer Overview

Three Out of Four Consumers Believe Companies Should Act Ethically

Over One-Third of Shoppers Willing to Pay More for Eco-Friendly Products

Financial Setback Spur Doing the Right Thing

Chapter 2: Market Overview

Scope & Methodology

Scope of Report: Focus on Food and Non-Food Products

Report Methodology

Key Ethical Issues

Definition of Organic Strictly Regulated

No Set Definition for “Locally Grown”

Humane Treatment of Animals

No Animal Testing/Cruelty-Free

Fair Trade or Ethically Sourced

Green/Eco-Friendly

Corporate Responsibility and Sustainability

The Global Reporting Initiative

Governmental and Non-Governmental Criteria and Certification

Consumers Union Lists 150 Different “Eco-Labels”

International Trends

Organic Agriculture More than Doubles Since 2000

Ethical Consumerism Mostly in Developed Nations

Global Consumer Attitudes and Actions

Ethical Consumerism Strong in the U.K.

U.K. Fairtrade Sales Exceed USA’s

Carbon Footprint Labeling

Global Ethical Product Launches Top 5,100

Table 2-1: Global Number of Ethical Product Launches, 2005-2009

U.S., U.K., Germany and Canada Lead in Ethical Product Launches

Table 2-2: Top 10 Countries by Number of Ethical Product Launches, 2005-2009*

The Body Shop and Hain Celestial Out Front in Ethical Product Introductions

Organic and Natural Are Top Global Ethical Claims

Table 2-3: Top 20 Global Marketers by Number of Ethical Product Launches, 2005-2009

Figure 2-1: Top Ethical Claims by Number of Global Ethical Product Launches, 2005, 2008 and 2009

New Global Product Notables

U.S. Market Size and Composition

Retail Sales of Ethical Products at a Record High

Table 2-4: U.S. Retail Sales of Ethical Products, 2005-2009 (in millions of dollars)

Food and Beverage Classification Dominates Retail Sales

Figure 2-2: Share of U.S. Retail Sales of Ethical Products by Classification, 2005 vs. 2009 (percent)

Natural Foods Channel Generates Almost Half of Retail Sales

Figure 2-3: Share of U.S. Retail Sales of Ethical Products by Channel, 2009 (percent)

Market Outlook

Impact of Recession

A Greener Administration

LOHAS: A Potent and Growing Consumer Base

Other Concerns Outweigh Ethical Issues

Consumers Expect Corporate Responsibility

Consumers Willing to Pay More for Sustainability

Table 2-5: Consumer Price Index for Food at Home, Personal Care Products, and Housekeeping Supplies: 1999-2009

Major Corporations Getting More Involved

Greenwashing Rampant

Consumers Need More Proof for Green Claims

Cause Marketing Takes Off

Retailers Pressuring Suppliers Along Ethical Lines

Legislative Changes in the Works

Healthy Sales Growth Projected Through 2014

Table 2-6: Projected U.S. Retail Sales of Ethical Products, 2009-2014 (in millions of dollars)

Competitive Overview

Top Ethical Product Marketers

Acquisitions Yield Consolidation, Credibility Issues

The Most Ethical Companies and Brands

Over 2,100 New U.S. Products Annually Bear Ethical Claims

Table 2-7: Number of U.S. Ethical Product Launches, 2005-2009

Organic, Natural Lead New Products Claims

Figure 2-4: Top 10 Ethical Claims by Number of U.S. Ethical Product Launches, 2005, 2008 and 2009

Marketers Reduce Packaging’s Environmental Footprint

Natural Supermarkets Set the Pace

Over 18,000 Stores in the Natural Foods Channel

Ethical Becoming an Essential Competitive Thrust for Supermarkets

Ethical Initiatives at Publix Super Markets

Opportunity Too Good for Mass Merchandisers to Miss

Specialty and Department Stores Strong in Personal Care

Alternative Distribution Channels

Case Study: Safeway, Inc

Safeway Moves to Lifestyle Formats

Ethical Private Label and Other Product Initiatives

Safeway and Sustainability

Case Study: Walmart Stores, Inc

Walmart Goes Sustainable

Success, Controversy, and Green Initiatives

More Ethical Products

Transforming Marketers

Walmart’s Sustainable Packaging Scorecard

Next Up: Sustainability Index

Greener Stores

Corporate Giving

Higher Ethics Expected of Suppliers

Case Study: Whole Foods Market

Company Returns to Its Roots

Growth Strategy

Ethical Convictions and Capitalist Growth Principles

Whole Foods Criticized on Ethics

Ethical Initiatives

Consumer Overview

Methodology: Experian Simmons Is Primary Source

Three Out of Four Consumers Believe Companies Should Act Ethically

Table 2-8: Demographic Segments Most and Least Likely to Agree It Is Important a Company Acts Ethically, 2009 (percent, number and index of U.S. adults)

Over One-Third of Shoppers Willing to Pay More for Eco-Friendly Products

Table 2-9: Demographic Segments Most and Least Likely to Agree They Would Pay More for Environmentally Friendly Products, 2009 (percent, number and index of U.S. adults)

Ethical Consumers Come in Shades of Green

Consumers and Sustainability

GMA-Deloitte Green Shopper Study

Financial Setback and Doing the Right Thing

Table 2-10: Ethical Consumption Psychographics: Affluent Consumers by Change in Financial Situation, Q3 2008 to Q1 2009 (percent)

Chapter 3: Food & Beverages

Market Trends

Market Definition

Four Key Ethical Issues Affect Food and Beverages

Definition of “Organic”

Organic Foods Not Nutritionally Superior?

Canada Adopts Organic Product Regulations

Many Organic Foods Support Other Social Issues

No Set Definition for “Locally Grown”

Humane Treatment of Animals

Cage-Free Eggs

No Standards for Free-Range Label

Fair Trade Practices

TransFair Certifies Products Sold in USA

Sustainable Agriculture

Some Marketers Set Their Own Sustainable Sourcing Guidelines

Sustainable Seafood

The Sustainable Agriculture Initiative

Hormone-Free

Genetically Modified Ingredients Widespread

Non-Profit Group Begins Non-GMO Certification

Genetically Engineered Animals Coming Soon

CSR and Corporate Sustainability in the Food Industry

Market Size and Composition

Ethical Food and Beverage Retail Sales Near $28.2 Billion in 2009

Table 3-1: U.S. Retail Sales of Ethical Foods and Beverages, 2005-2009 (in millions of dollars)

More than Three Out of Four Ethical Foods Carry an “Organic” Claim

Sales of Organic Foods and Beverages Pace the Market

Table 3-2: U.S. Retail Sales of Organic Foods and Beverages, 2005-2009 (in millions of dollars)

U.S. Retail Sales of Fair Trade Foods and Beverages

Table 3-3: Global vs. U.S. Retail Sales of Fair Trade Foods and Beverages, 2005-2008 (in millions of euros)

Produce and Dairy Are Largest Ethical Categories

Figure 3-1: Share of U.S. Retail Sales of Ethical Foods and Beverages by Product Category, 2009 (percent)

Natural Foods Channel Leads Retail Sales

Figure 3-2: Share of U.S. Retail Sales of Ethical Foods and Beverages by Retail Channel, 2009 (percent)

Market Outlook

Obama Administration Brings Changes

More Consumers Choose Ethical Food Shopping

Organic Foods and Beverages Going Mainstream, But Growth Is Slowing

Table 3-4: Consumers Who Frequently Buy Organic Foods and Beverages, February 2009 (percent of U.S. adults)

Nearly 70% of Consumers Buy Organic

Organic Foods and Beverages Carry a Price Premium

Consumers Willing to Pay More for Organic Foods and Beverages

Table 3-5: Consumers Who Are Willing to Pay More for Organic Foods and Beverages, February 2009 (percent of U.S. adults)

Organic Farming Takes Root

Table 3-6: U.S. Certified Organic Acreage: 1992, 2000, 2003 and 2005

A Glut of Organic Supplies?

Local Foods Gain Interest

Consumers More Attuned to Humane Treatment of Animals

Retailers Also Spearhead Animal Welfare Standards

Fair Trade, Rainforest Alliance Awareness Gain Momentum

More Dairies Going Hormone-Free

Few Consumers Understand GMO

Cause-Related Marketing

Corporate Sustainability Goals

Ethical Foods and Beverages Sales Will Top $44 Billion in 2014

Table 3-7: Projected U.S. Retail Sales of Ethical Foods and Beverages, 2009-2014 (in millions of dollars)

Competitive Trends

Global Marketers, Investors Control Many Top Brands of Ethical Foods and Beverages

Corporate Buyouts Continue

Organic Line Extensions Not So Successful

Private-Label Ethical Products Booming

Marketing and New Product Trends

More than 1,300 New Products Bear Ethical Claims

Table 3-8: Number of U.S. Ethical Food and Beverage Launches, 2005-2009

Organic and Natural the Most Popular Claims

Figure 3-3: Top 10 Ethical Claims by Number of U.S. Ethical Food and Beverage Launches, 2009

Table 3-9: Ethical Claims by Number of U.S. Ethical Food and Beverage Launches, 2005-2009

Tea Category Leads in Ethical Products

Table 3-10: Number of Ethical Food and Beverage Launches by Product Category, 2005-2009

Private Label Leads Product Introductions

Table 3-11: Top 15 U.S. Marketers of Ethical Foods and Beverages by Number of Product Launches, 2005-2009

More Marketers Ally Themselves with Social and Environmental Causes

Reducing Carbon Footprint

Traceability as a Consumer Marketing Strategy

Celebrity Endorsements: Are They Credible?

Mainstream Marketers Extending Brands with Organic Varieties

Cage-Free Eggs Making Inroads

Sustainable Meat and Seafood

Locally Grown Mostly a Retail Strategy

Growing Their Own—Chickens

Fair Trade and Rainforest Alliance Certification

Targeting Ethical Parents through Kids

Growth in Bottled Water Drying Up

Reduce - Reuse - Recycle: Packaging Goes Eco-Friendly

Case Studies

Clif Bar & Company—Raising the Ethical Bar

Community Service and Cause Marketing

Corporate Culture Emphasizes Personal Well-Being

Quench Bar Supports “1% for the Planet”

Contessa Premium Foods, Inc.—Green Cuisine

Frito-Lay North America, Inc.—Jumping on Social Trends

The Casa Grande Plant Retrofit

Earth-Friendly Packaging

Case Study: Frontier Natural Products Co-op

Focus on Sustainable Sourcing

Giving Back to the Community

Newman’s Own, Inc.: Dedicated to Philanthropy

Hole in the Wall Camps a Big Success

Company Partners with Ford to Help Feed America

Joins Safe Water Network

The Committee Encouraging Corporate Philanthropy

Stonyfield Farm, Inc.—A Model for Corporate Responsibility

The Greener Cow Pilot Program

Quality and Authenticity Are Keys to Success

The Consumer

The Experian Simmons Consumer Survey

One out of Four Consumers Looks for Organic/Natural Foods

West Coast, Northeast and Metro Consumers More Likely to Buy Organic/Natural Foods

Higher Levels of Education and Income Characterize Consumers

Asian-Americans Skew High

Youngest Shoppers Resist Organic/Natural Foods, But Small Households Score High

Figure 3-4: Selected High-Index Demographics: Consumers Who Look for Organic/Natural Food, 2009 (U.S. adults)

Table 3-12: Demographic Overview for Consumers Who Look for Organic/Natural Food (Any Agree), 2009 (percent, number and index of U.S. adults)

Table 3-13: Demographic Overview for Consumers Who Look for Organic/Natural Food (Agree a Lot), 2009 (percent, number and index of U.S. adults)

Table 3-14: Demographic Overview for Whole Foods Market or Trader Joe’s Shoppers, 2009 (percent, number and index of U.S. adults)

Affluent Consumers and Organic/Natural Foods

Table 3-15: Affluent Consumers: Largest Demographic Blocs, Q3 2008 to Q1 2009 (percent, number and index)

Table 3-16: Affluent Consumers: Top Demographic Indicators, Q3 2008 to Q1 2009 (percent, number and index)

Table 3-17: Agreement Among Affluent Consumers with Statement, “When Shopping for Food, I Especially Look for Organic or Natural Foods”: Overall and by Recent Change in Financial Situation, Q3 2008 to Q1 2009 (percent and index)

Figure 3-5: Agreement Among Affluent Consumers with Statement, “When Shopping for Food, I Especially Look for Organic or Natural Foods”: By Change in Financial Situation, Q3 2008 to Q1 2009 (percent)

Chapter 4: Non-Food Products

Market Trends

Focus on Ethical Personal Care and Household Products

Personal Care Products

Household Products

Key Ethical Issues Affecting Non-Food Products

Natural or Organic vs. Synthetic

Cruelty Free—Not Tested on Animals

Biodegradable, Recycled and Recyclable

Sustainable Sourcing

Fair Trade and Ethically Sourced

CSR and Corporate Sustainability in the Personal Care and Household Products Industries

NSF/ANSI 305: The First Organic Standard for Personal Care Products

No Parabens

No Regulated Standards for Most Household Products

Green or Eco-Friendly Household Products Share Many

Similar Attributes

No Chlorine Bleach

No Phosphates

Market Size and Composition

Retail Sales of Ethical Non-Foods to Top $9.7 Billion in 2009

Table 4-1: U.S. Retail Sales of Ethical Non-Food Products, 2005-2009 (in millions of dollars)

Ethical Personal Care Products Grow to $8.1 Billion

Table 4-2: U.S. Retail Sales of Ethical Personal Care Products, 2005-2009 (in millions of dollars)

Ethical Household Products Sales Soar to $1.6 Billion

Table 4-3: U.S. Retail Sales of Ethical Household Products, 2005-2009 (in millions of dollars)

Personal Care Products Dominate Ethical Non-Food Sales

Figure 4-1: Share of U.S. Retail Sales of Ethical Non-Food Products by Segment, 2005 vs. 2009 (percent)

Natural Foods Channel Rings Up Almost Half of Retail Sales

Figure 4-2: Share of U.S. Retail Sales of Ethical Personal Care Products by Retail Channel, 2009 (percent)

Figure 4-3: Share of U.S. Retail Sales of Ethical Household Products by Retail Channel, 2009 (percent)

Retail Sales of Organic Non-Food Products Top $1.6 Billion

Market Outlook

More Americans Determined to Go Natural, Organic, Green

Green Non-Foods Weathering the Recession Well

More Consumers are Going Green

Product Safety and Personal Health a Driving Factor

Pop-Prestige Chains Buoy Personal Care Product Sales

Product Performance Key

Mainstream Marketers Joining the Market

Fierce Competition for Shelf Space

H1N1 Flu Could Dampen Growth of Green Household Products

Retail Sales Will Surpass $17.5 Billion by 2014

Table 4-4: Projected U.S. Retail Sales of Ethical Non-Food Products, 2009-2014 (in millions of dollars)

Ethical Personal Care Sales Will Top $13.6 Billion in 2014

Table 4-5: Projected U.S. Retail Sales of Ethical Personal Care Products, 2009-2014 (in millions of dollars)

Ethical Household Products Will Approach $3.9 Billion in 2014

Table 4-6: Projected U.S. Retail Sales of Ethical Household Products, 2009-2014 (in millions of dollars)

Competitive Trends

Ethical Non-Food Marketers

Hundreds of Personal Care Marketers, Only a Few Dozen Majors

Table 4-7: Top 10 Marketers of Natural/Organic Personal Care Products by Retail Sales and Percent Share of Total Retail Sales, 2006 vs. 2008 (in millions of dollars)

Few Natural Personal Care Marketers Cross Over to Mass-Market Channels

Mainstream Household Products Marketers Muscle into Ethical Arena

Growth Through Acquisitions

Private Label Aplenty

Marketing and New Product Trends

New Non-Food Products with Ethical Claims Rising Rapidly

Natural Surpasses Organic as Leading Ethical Claim

Soap Is Leading New Product Category in Ethical Non-Foods

The Body Shop Leads Marketers in Launches

Table 4-8: Number of U.S. Ethical Non-Food Product Launches: 2005-2009

Table 4-9: Top 10 Ethical Claims by Number of U.S. Ethical Non-Food Product Launches: 2005, 2008 and 2009 (number)

Table 4-10: Ethical Claims by Number of U.S. Ethical Non-Food Product Launches, 2005-2009 (number)

Table 4-11: Number of Ethical Non-Food Launches by Product Category: 2005-2009 (number)

Table 4-12: Top 10 U.S. Marketers of Ethical Non-Food Products by Number of Product Launches: 2005-2009 (number)

Better for the Environment, Better for You

Price and Performance Are Key Parts of the Marketing Equation

Ethical Products Through Green Chemistry

Natural and Pseudo-Natural Personal Care Products Proliferate

The Mineral Craze

Teens for Safe Cosmetics

Other Product Splashes

Personal Paper Goods an Environmental Conundrum

Green Household Products Surging

Other Green Household Products

Concentrated Formulas

Household Products Come Clean on Ingredients

Are Green Paper Products Going Mainstream?

Seeing the Light with Energy-Saving Light Bulbs

Marketers Embrace Cause-Related Marketing

Fair Trade Claims Will Increase in Personal Care Products

Sustainability Is Building

Private Label Goes Ethical

Case Studies

The Body Shop Under L’Oréal

Clorox Co. Goes Green with Burt’s Bees and Green Works

Burt’s Bees Humming

Clorox’s Green Works Is Cleaning Up in Household Products Market

Kimberly-Clark Launches Natural Paper Products

Marcal Paper Products LLC: Rising from the Ashes

Seventh Generation Fights Back

Tom’s of Maine Under Colgate

The Consumer

The Packaged Facts Consumer Study

Half of Those Surveyed Use Natural HBC

Figure 4-4: Consumer Usage of Natural/Organic Personal Care Products, 2009 (percent of U.S. adults)

But Only a Third Say It’s Effective as General-Market HBC

Relatively Few Plan to Spend Less on Natural HBC

Figure 4-5: Consumer Attitudes About Natural/Organic Personal Care Products, 2009 (percent of U.S. adults)

Burt’s Bees the Most Popular Brand By Far

Figure 4-6: Consumer Usage of Natural/Organic Personal Care Products by Brand, 2009 (percent of U.S. adult users of natural/organic personal care products)

The Experian Simmons Consumer Survey

Nearly One-Third of Women Never Buy Cosmetics Tested on Animals

Table 4-13: Selected Above Average Demographics for Consumers Who Never Buy Cosmetics Tested on Animals (Any Agree), 2009 (percent, number and index of U.S. adults)

Figure 4-7: Selected High Indexes for Consumers Who Never Buy Cosmetics Tested on Animals (Agree a Lot), 2009 (U.S. adults)

37% of Consumers Buy Recycled Paper Products

Table 4-14: Selected Above Average Demographics for Consumers Who Buy Recycled Paper Products (Any Agree), 2009 (percent, number and index of U.S. adults)

Figure 4-8: Selected High Indexes for Consumers Who Buy Recycled Paper Products (Agree a Lot), 2009 (U.S. adults)