Published 2 years ago.
About a 5 minute read.
Even with an uptick in consumer knowledge of climate issues and food brands sharing carbon-footprint data for their products, the CPG world is still wondering if carbon-labeling is worth the effort and investment. Here are 5 key takeaways from recent peer-reviewed literature and industry papers.
In June of 2020, Unilever
its ambition to communicate the carbon footprint of all of its products. Around
the same time, Quorn also unveiled its on-pack
While many see Unilever and Quorn as the first to market with such lofty
initiatives, the reality is that a handful of food companies have attempted this
Back in 2007, PepsiCo made the
first-mover decision to
carbon footprints on pack for its Walkers and Quaker Oats brands. At
retail, Tesco attempted to carbon label over 50,000 own-brand products —
however, it reportedly gave
the project in 2012 after only being able to complete calculations for 500
products. Tesco claimed to have failed due to the lack of consumer knowledge,
extensive time requirements and the failure of other retailers following suit.
What’s different about the present carbon label era compared to the last?
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In the US, over 45 percent of consumers believe global climate change is a serious problem.
of Millennials are altering their buying habits with the environment in
information about climate-friendly food and are also more likely to buy
products with a “climate-friendly”
Technology that streamlines carbon footprint calculations has infiltrated the
market. Software from HowGood,
SimaPro make it easier to calculate carbon footprints
for food products. For example, sustainability professionals have stated that on
average, it takes three manual hours to find emission factors for one raw
material. With HowGood, farm-to-processing gate raw-material emission factors
can be populated instantly.
are becoming more integrated into the consumer food experience compared to ten
years ago. Whether it’s
Oatly in their
fridge or Quorn in their freezer, consumers are now
more accustomed to seeing carbon labels.
Even with these advancements, any time or monetary investment begs the age-old
question of, “What is my return going to look like?” In the CPG world, this
translates to, “If I carbon label my products, are they going to sell more?”
Here’s what we know so far from peer-reviewed literature and industry papers
that have been published since the last era of carbon labeling.
According to a comprehensive
consumers from six EU countries, a carbon footprint label increases purchase
probability amongst consumers. Carbon-labeled products are also more
combined with prices lower than (or at least equal to) conventional products.
on winning consumer preference, brands and retailers must be convey the carbon
footprint value in comparison with some sort of ranking or front-runner label —
in, for example, a traffic light system (green for low emissions, yellow for
less acceptable ones and red for those with higher environmental impact).
Another technique is evaluating your products for HowGood’s “climate-friendly”
attribute, which would serve as a front-runner indication.
In 2016, Thøgersen and
demonstrated that by re-designing the carbon footprint label and making it
similar to the aforementioned traffic light system, Danish consumers
purchased more foods with relatively lower carbon footprints.
This was also
amongst Australian consumers. 37 grocery products were carbon-labeled on
pack using the following color system: green (below average), yellow (near
average), and black (above average) carbon footprints. Sales were recorded over
a three-month period. The study found that over the three-month period, sales
for black-labeled products decreased by 6 percent after labeling; while sales
for green-labeled products increased by 4 percent throughout the same period.
In the aforementioned Australian
when green-labeled products were also the cheapest, the shift was rather
substantial. Results demonstrated a 20 percent switch from black- to
green-label sales when this was the case. These findings illustrate the
potential for labeling to stimulate reductions in carbon emissions.
In a US study on tomatoes and
apples, it was found that a significant proportion of consumers were willing to
pay a premium for reducing their carbon footprint via choice or requested a
discounted price for products with a higher carbon footprint.
that most consumers are willing to pay more for food products that exhibit a
lower carbon footprint. Because of this, retailers should be more inclined to
allocate shelf space for carbon-labeled products — doing so could result in
While adding carbon footprints to the consumer experience may require an
investment in time and resources, the data demonstrates that when designed
effectively, it can certainly have the potential to increase sales velocity for
brands and margins for retailers.
Because consumers will greet the carbon-labeled products at the retail stage,
should the consumer preparation and end-of-life stage be included in the
calculated carbon footprint? We know that recycling rates, incineration rates
and landfill rates vary by state and even country; so, if our goal as an
industry is to guarantee an even, comparable playing field — is it fair to the
consumer to include it? Share your thoughts on this in the comments below.
Published Feb 17, 2022 1pm EST / 10am PST / 6pm GMT / 7pm CET