Our consumer research with Retail Week found that 44% of UK consumers are more concerned about the impact we are having on the world's environment than this time last year and 29% have started shopping with retailers with more ethical or sustainable practices as a result and therefore this has never been more important.
Consumer behaviour is changing and both manufacturers and retailers need to update strategies to keep up. It is no longer just about delivering sustainable or ethical products, businesses face increasing scrutiny over all of their business processes and supply chains. From the focus on single-use plastics to waste, from energy projects to the growing markets for by-products once considered waste, the evolution of the circular economy means retailers need to ensure they look at each element of the supply chain in a way that was not previously necessary.
Alongside the EU ban on single-use plastics, the UK Government are now taking more formal measures on some of the wider issues, with cross-party and cross-industry initiatives assessing the sustainability of food waste recycling. We can expect a focus on continued consumer education on what they should actually throw away and why a use-by and a best before date are not the same thing - there can be a strong market for these products as a number of social enterprises ably demonstrate.
After announcing a £15m food waste fund in October 2018, Michael Gove has appointed a Food Waste Champion in order to tackle this 'economic, environmental and moral scandal' – we expect further substantial action in this area and pressure on all to act.
We anticipate that 2019 will be the year in which the circular economy really takes off. There are already strong markets in recycled plastics in packaging and for the reduction in scope of packaging. There are clear opportunities in the development of more sustainable products generally and the opportunity to turn products that were previously waste into things that are now desirable and fashionable.
When the Government announced its Industrial Strategy in November 2017, using waste to generate energy was a clear area of focus and an opportunity to deliver clean energy. Over a year on, while progress has been made, the speed of progress appears to have stalled, in part due to the substantial cost of such programmes. We still believe that there will be growth in this area and technologies like anaerobic digestion has a substantial future. Find out more about our experience in this area >
It is also possible that Brexit might play a role here, as the freedom to set out own rules would give flexibility to create a more protectionist environment to drive higher standards of sustainability. This is easy to say but in practice is more challenging to achieve where there are differential standards in the EU and other markets with which we want to do a trade deal. Notwithstanding this, we expect the wider area of environmental standards from plastics, to chemical usage, to recyclability and sourcing, to feature heavily in the debates about the direction of trade.
All of this is likely to lead to stricter regulations and pressure on retailers, so it's important to assess your supply chain now.
If you have any questions on the issues discussed, please contact Dominic Watkins, Global Head of Food.