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One thing that can be said for the recession is its ability to be thought-provoking. Having read an article about rising demand for meat and leather and its damaging impact on the Amazon and on its significant contribution to greenhouse gases (GHG) and climate change, I pondered how the recession might either exacerbate or alleviate deforestation through its impact on meat demand.

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There are several things that could happen:

  • Total demand for meat decreases as it’s a relatively expensive form of protein. This trend is supported by other changes in consumption, for example the increase in sales of eggs, which offer a cheaper protein source.
  • Demand for more expensive or ‘niche’ meat decreases (for example organic, or free-range meat, which may have less negative impacts on the environment, because it is less intensively farmed), whilst overall demand for meat remains static (picture meat on this graph).
  • Demand from the developed world drops for beef from international origins decreases, as ‘local’ produce becomes more important. These farming systems may have less direct impact on the rainforest, but their environmental impacts remains unknown and they will still contribute to GHG emissions.

In the first scenario – where total demand for meat drops, this may be a positive for the environment. In the second scenario, the impacts on the environment are likely to be negative. In the third scenario, the impact on the environment is uncertain.

To complicate matters further is the impact changing demand will have on the livelihoods of those who rely on meat production and for those who already have limited incomes to afford meat, the recession may shift consumption to wildmeat or bushmeat (much of which is illegally hunted and can contain endangered species) as a cheaper alternative.

What the recession has certainly shown us is just how interconnected income, consumption and sustainable development really is.

Who would have thought that the humble egg would have anything to do with the recession? Yet, eggs have come to epitomise the unexpected impacts of the recession on consumption. Egg sales have risen significantly since the start of the year, offering a cheap form of protein and as an important ingredient for home-made food. As a result of ‘trading down’ consumers have seen their kitchens become a hive of activity again, as we move away from restaurant and pre-cooked meals, to home-made food to save our precious pennies.

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Other impacts of the recession include increasing shopper promiscuity as we feel less loyalty to retailers and chose to shop around to find the best deal. A survey by Experian, a retail consultant, shows that ‘more than a quarter of shoppers say they have been more likely to look around for the best deal over the past six months, and 80% say they have become more aware of the price of goods and services.’ Larger supermarkets have been able to count on 80% of their consumers coming back week after week. But recently, they’ve found shoppers getting much smarter and sharper, searching out value. The public has also become less trusting of big businesses – undoubtedly as a result of watching the banking sector crumble, bringing the entire financial system down with it.

Sales of ‘local’ produce from supermarkets have also risen. Asda claims its sales of local produce is up 55% compared to last year. Asda argues that consumers are doing this because of environmental concerns over ‘food miles’ and also as a bid to support local businesses in time of increased job and financial insecurity. However, sales of organic produce have thought to have declined – showing an often contradictory message in terms of environmental concerns – this may, however, be due to the relatively high cost of organic produce. Retailers, possibly as a strategy to regain consumer trust but also to make money from this growing trend, have also turned their focus towards sourcing locally. At the recently held Scottish Parliament Asda stated it was increasing in sourcing from Scottish producers, up from £16m last year towards a target of £25m this year.

What do these trends mean for sustainable development? What does the trend towards local mean for the livelihoods of small farmers in parts of the developing world and what does the fall in demand for organic produce mean for the environment? It might be too early to answer these questions, but monitoring these trends will be vital for understanding how sustainable development can make ensure the net impact of the recession is not a negative one, particularly for producers in the developing world. Dispelling misconceptions about food miles might be one example of ensuring that our growing preference towards local produce does not have unwanted and unforeseen effects.

Although no-one would want to suggest that a lengthy recession is a positive thing, research-wise, it has allowed us to see what kind of things happen in an economic downturn and in particular, when consumers start to either feel or perceive their disposable income dropping.

For example, a recent article by the BBC discusses how consumers in the UK shopped in April 2009, as compared to April 2008. The results are pretty startling – sales of baked beans are up by 21.6%, budget lines by almost 23% and there is a depressing story for organic produce – as sales have decreased by 10.6% when compared to the previous year. The story is even worse for March 2009, when there was a 21.6% drop in organic sales.

The most obvious trends of customers replacing a higher-end product, with a similar but less expensive substitution is Champagne and sparkling wine – sparkling wine sales were up 9.9%, whilst sales of Champagne were down 9.0%.

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Falls in organic sales and increases in budget lines may bode poorly for the environment, but other trends may work in its favour. For example, unit sales of low-energy light bulbs have grown by 38.8% (although value has fallen due to price drops for the bulbs – from £1.25 to 87p). Interestingly, but perhaps not surprisingly, air traffic at Heathrow, Gatwick, Stansted, Glasgow, Edinburgh, Aberdeen and Southampton airports has fallen as passenger numbers decreased 2.3% in April compared with the same month in 2008.

And people are driving less –  London’s congestion charge was paid just under 9.5 million times in the first four months of the year, which was down 9.8% on the same period last year. Similarly the number of people crossing the Severn bridge was also down, whilst railway passengers grew slightly.

Unfortunately the overall impact of these trends (both the positive and negative, for the environment) won’t emerge until the recession has ceased, but let’s hope the positives will be permanent lifestyle changes.

Several of Sustainableslump’s posts have discussed the impacts of the recession on buying habits and society’s value towards consumption. Whilst on the surface this might not seem like an issue that directly affects the developing world, our purchasing practices can profoundly shape the livelihoods of others that dominate the production of the goods that fuel our seemingly endless appetite for shopping.

Consumption and the recession provides the perfect example of just how complex and correlated all the factors involved in the complicated interplay between sustainable development and the recession really are.  

For example, whilst some experts believe that the recession could boost responsible retailing and decrease some of the environmental damage associated with radical economic growth, growth in sales for ‘lower end’ retailers such as Lidl, Aldi and Primark and falling sales in Organic produce suggest that for a proportion of the market ‘sustainability’ and ‘quality’ just aren’t relevant decision-making factors.

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Some trends suggest that consumers are beginning to return to ‘older’ values of quality over quantity and in regards to fashion in particular, of classic and high quality over cutting-edge and ‘quick’ fashion pieces churned out by the Primarks of the world.

In both these circumstances, however, it may be that the developing world loses out – if shoppers in the west are buying less (albeit of a better quality), factories will have to close and unemployment will inevitably rise. If cheaper retailers come to reign supreme downward price pressures on the market as a whole could occur as retailers compete in ‘a race to the bottom’, putting pressure on labour costs, production costs, margins and ultimately the value accrued by producers in the developing world.

In so many ways the recession brings up more questions about the relationship between economic growth and sustainable development than it could ever answer.  Let’s hope that effective measurement and research will make some interesting conclusions once the market recovers…..

Whilst consumers may apparently be flocking to Aldi and Lidl in their droves, and organic sales have taken a 19% battering compared to the start of 2008, some of the biggest global companies are highlighting their ethical sourcing as a unique selling point amidst the sea of economic meltdown and a reining in of consumer spending.

Communicating the core qualities of a product to the customer in a powerful way has become ever more important. The Soil Association, for example, recognises that the market for organic produce has stalled and feels that it may be due to a lack of understanding of what organic means and its positive wider implications – improved environmental conditions and improved economic, environmental and social sustainability for farmers in the developing world.

Emphasising the unique characteristics of certified produce, for example its environmental and ethical sustainability and the positive impacts these sourcing strategies have, is just one example of promoting the true ‘value’ of a product and the qualities it possesses that goes beyond value for money. It reminds the customer that yes,  economic doom and gloom may be pervasive and conspicuous consumption is less appropriate, but that what you buy can bring enjoyment and a wider sense of contributing to environmental and social change.

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According to the Financial Times, Starbucks recently launched a major advertising campaign in US newspapers, in the first stop of a multi-million dollar effort to inject life into customer demand for Starbucks’ coffee.  Using the slogan “It’s not just coffee. It’s Starbucks”, the coffee chain aims to emphasise quality as a unique selling point. The campaign also highlights its sourcing strategy as a key differentiator from its competitors: “anything less is going to leave a bad taste in your mouth”. Although we may be increasingly believing value is all about price and price determines all, Starbucks wants to re-assert the importance of quality and sourcing for customers’ enjoyment of the product, peace of mind and a sense that the extra money is a wise investment in a product that brings about positive externalities rather than negative.

Ian Henderson, managing director of brand agency Totem, argues that “what people are looking for, in this new mood of austerity and thrift, is value….people still want to be good. They just want value from it.”

This could be good news for sustainable development…

Contradiction exists over just how the recession is affecting how and what Western consumers buy. Whilst one study shows that 66% of consumers are still buying ‘green’ despite the recession, others show a fall in sales of organic produce, which has led to some organic farmers in the UK leaving the Organic certification scheme and which will inevitably have negative knock-on effects for small farmers in the developing world who benefit from the low-input, high premiums, organic production and sales can entail.

YouGov surveyed 2,000 UK adults in February 2009 on behalf of the Carbon Trust Standard and found that 66% say ‘it’s important to buy from environmentally responsible companies‘. Just over a quarter argued that environmental concerns affect them even more than a year ago.  In theory this can only be good for certification schemes that are perceived as more environmentally sustainable, such as Organic and Rainforest Alliance certified, but is what people say and do, two very different things?

The latest figures from TNS, market retail analysts, as quoted by the Guardian, show that there has been a 19% fall in sales of Organic produce in the 12 week period leading up to March 2009, when compared to the previous year. Are shoppers showing caution towards spending on more expensive food products?

As consumers, we have significant power in determining the fates of people and environments outside our own.

farming1Photo by DMahendra

For many small farmers in the developing world, participation in Fairtrade certification schemes, with its associated minimum market price and social premiums act as important safety nets when commodity prices fall and recognises the added costs for producers in participating in this certification scheme. Schemes like Fairtrade will become increasingly important in the economic downturn and should not necessarily be dismissed as unnecessary ‘luxuries’.

Reports about trends in ethical consumerism since the advent of the economic crisis are contradictory, to say the least.

Market research carried out by retail analyst TNS demonstrated that after a tenfold increase in sales over the past decade (peaking at £100 million in February 2008) sales are now falling – most notably in eggs, but also in chicken, dairy, fresh fruit and vegetables. However, research by Organic Monitor shows that consumer demand for fair-trade products continues to strengthen despite the recession, and with the mainstreaming of Faitrade – such as Cadbury’s recent revelation that all Dairy Milk will become Fairtrade certified – this strong growth may be set to continue.

ethical-consumerism-report-2007Experts have warned that consumers under economic pressure tend to concentrate on self-preservation and less about others. However, the Co-operative Bank’s Ethical Consumerism Report 2008 argues that ‘despite the first tremors of the downturn being felt towards the end of last year, the overall ethical market in the UK was worth £35.5 billion in 2007, up 15 per cent from £31 billion in the previous 12 months.’ The Co-operative attributes the growth in ethical consumerism to the impact of Government green legislation and ‘choice editing’. These factors are likely to continue past growth trends.

The exact impact of the recession on ethical consumerism will not be fully evident until the recession subsides, but if fairtrade, organic and other ethically certified food can ride the economic storm, the potential devestating impacts of the recession on small farmers and labourers in the developing world, and indeed the environment, may be somewhat attenuated.