ESG Adoption: A Global Trend and its Impact on the Food Industry
The food industry is constantly evolving and adapting to changing consumer preferences and market demands. One of the most significant trends in recent years has been the growing focus on Environmental, Social and Governance (ESG) principles in both developed and emerging markets. Despite the common belief that ESG principles are only applicable to affluent consumers in developed countries, recent studies have shown that consumers in emerging markets are also demanding corporate responsibility and sustainable products. This article delves into the findings of a report on the growth opportunities in sustainability for food manufacturers, highlighting the differences and similarities across various markets. From India to the U.S., end-users are increasingly looking for transparency, clarity, and accountability from the companies they buy from. Join us as we explore the exciting potential of ESG in the food industry.
Sustainability: A Global Trend in the Food Industry
The food industry is no longer just about producing and selling food products. It’s also about the impact it has on society, the environment, and the economy. With clients demanding a strong corporate response to sustainability, it’s becoming increasingly important for manufacturers to understand the current landscape and opportunities in sustainability. Recent studies highlights the growth opportunities in sustainability for food manufacturers, as well as the differences in buyer preferences across markets. By examining the current landscape of sustainable food products in different markets, companies can gain valuable insights and establish themselves as sustainability leaders. Emerging Markets Driving Sustainability. 
End-users in emerging markets are demanding a strong corporate response to environmental and social issues. The top five emerging markets where consumers are calling for companies to implement sustainable practices are India, Colombia, Mexico, Indonesia, and the Philippines. In India, for example, consumers are demonstrating a personal commitment to sustainability through their preference for natural products, which is growing twice as fast as the non-natural market. Developed Markets Demand Clarity in Sustainability Messaging In developed markets, such as the U.S., consumers are becoming increasingly sensitive to product claims and ingredients. To reach these clients, manufacturers must provide clear and specific sustainability messaging. The report shows that sales of products with broad claims such as Recyclable or Farm Raised have remained stagnant or decreased (0% and -19%, respectively), while those with more specific claims such as Terracycle Certified (4%) or Grass Fed (24%) have experienced growth. The food industry is undergoing a major shift towards sustainability, and manufacturers must be prepared to respond to changing consumer preferences and demands. By understanding the opportunities and challenges in the market, companies can position themselves as leaders in sustainability and secure their future in the industry.
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Transparency and Accessibility of Information: A Key Driver in ESG Adoption
As consumers become more conscious of their purchasing choices and the impact they have on the environment, they are seeking clarity and transparency around sustainability messaging. This has led to the creation of a unified information system (FIS – Food Information System) that provides manufacturers with a clear and concise method for communicating manufacture`s ESG efforts to consumers.
This system provides a comprehensive, publicly available database that manufacturers can use to showcase their ESG efforts and demonstrate the commitment to sustainability. This information is critical in helping consumers make informed purchasing decisions.
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The adoption of FIS not only benefits consumers, but also provides manufacturers with a competitive advantage by demonstrating their commitment to sustainability. Companies that successfully articulate their Environmental, Social and Governance (ESG) initiatives are more prone to attracting and retaining buyers who are mindful of their purchasing decisions.
In summary, the food industry’s adoption of ESG principles is a global trend that is driven by consumer demand and the desire to improve the environment. The availability and transparency of information is also a key driver in ESG adoption, and it is important for manufacturers to join the unified information system to ensure they remain competitive. With the increasing awareness of the impact of food production on society, the environment and the economy, ESG principles will continue to play an important role in shaping the food industry.
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Source: The Nielsen Company