• Holly Duke

The Rise of Conscious Consumerism and the Local Economy

The rise of conscious consumerism is not a new trend. Growing awareness surrounding environmental and ethical concerns regarding production and consumption has led to increased demand for sustainably produced goods, with 83% of British people calling for firms to be more environmentally friendly. Social media and television have helped to highlight these issues, having a significant impact on the population: 88% of viewers reported changing their lifestyle after watching Blue Planet II, an effect dubbed the ‘Blue Planet II Effect’. Many firms have jumped on this bandwagon, engaging in (often performative) activism to attract customers, yet the public are beginning to see through ‘greenwashing’ and demand real change. Small brands are often associated with greater levels of environmental responsibility, attracting conscious consumers, and indeed this can be seen in their growth over the last few years. In the US, small brands accounted for 50% of value growth between 2017-2019. There is therefore significant demand for change, and Forbes predicts that conscious consumerism will be a key trend in 2021, suggesting this is here to stay.



One industry that is likely to be impacted heavily by changes in consumption habits is the food industry. The size of the UK grocery market is substantial, worth £205 billion in 2020, an increase from £192 billion in 2019. This market displays the characteristics of an oligopoly; with the ‘big 4’ supermarkets - Tesco, Sainsburys, Asda and Morrisons - holding over 65% of the market share together. Although it is generally thought that 50% of food consumed within the UK is imported, analysts have found the figure to be closer to 80%, suggesting these supermarkets choose to import cheaper food from abroad to pass on lower prices to consumers. This food is cheap for a reason: unsustainable practices are used to generate the greatest output at the lowest cost. Independent retailers currently only make up a small percentage of the market share within the grocery market, with symbols and independents holding 1.8% in 2020. However, in general they are growing at a rate of 69.3%, and so across many industries their market share and influence is likely to continue to expand.


Of course, since the pandemic started, consumption habits have changed significantly, with long queues and food shortages encouraging consumers to consider alternatives to their weekly shop. Online deliveries have therefore been on the rise, doubling to 12.5% of grocery sales from December 2019 to December 2020. The UK online grocery market is the most developed in Europe, with 6.5-6.9% penetration in 2020 compared to France at 5.0% and Germany at 1.5%. These online delivery slots have been in high demand, leaving those unable to book one forced to shop more locally. Deborah Womack, director at Deloitte Digital, highlighted how this will lead to changes in consumer habits, saying “Consumers may have begun shopping locally out of necessity rather than choice, however they are rediscovering their local shop as a place for human contact and personal service when they need it most”.


With more free time, many people began to pick up new hobbies, such as cooking, with 35% of GenZ and millennials reporting cooking more often from scratch then they did before the pandemic. 85% of people state that healthy food is very important; a focus which supports the change to more local producers, where the higher price often signals less harmful production methods. By June 2020, 19% of UK consumers had changed to buy their groceries from larger suppliers to primary grocers, and one organic farm reported their weekly profits increased threefold during the first lockdown, a large proportion of which was sustained once restrictions were lifted.


Supporting local farmers has therefore become a popular way of becoming more sustainable, and 39% of consumers say they will now consider local farmers when buying food. This is seen across all age groups: although the leading age group buying locally sourced foods in the UK are those aged 65 or older, 32% of under 25s believe that the future of food shopping will be in traditional food markets, compared to 58% in 2018. In addition, 65% of UK consumers reported to believe that local shops are important to the community, a hypothesis confirmed by KPMG, who announced that local shopping will continue to be prevalent throughout 2021. Looking further into the future, a projection by ThoughtWorks, detailing consumers’ grocery shopping habits in 2030, estimates that 34% will buy only from local producers and 27% from the farmers themselves, with 32% of consumers saying that they will ensure their food is ethically sourced.


A model proposed by NEF Consulting, which belongs to the New Economic Foundation, is a useful demonstration of the way money circulates around a local economy. There are three stages during which money is spent throughout the economy: local business turnover, the money that business spends in local suppliers and on local inhabitants, and finally the money that is then spent by those individuals and suppliers. For a local business with a considerable amount of labour who all live locally, every pound spent could lead to an additional £1.64 spent within the local community. Shopping locally therefore benefits the local economy significantly through increasing local employment, and there will be improved environmental practice, as local producers are able to be more easily held accountable by consumers and don’t have to transport their products as far, reducing their carbon footprint. It would only take a small increase in demand to support small businesses in the long term, with a study by Visa reporting just under 50% of small business owners estimate an additional £5 per week by each member of the local community would be required.


It remains unknown whether this trend will be sustained, leading to long term growth for local independent producers and retailers, as there was already a fall from 75% in May 2020 to 67% in June in local shopping commitments, suggesting that as life returns to normal, people will revert back to their previous habits. However, it does only take 2 months for a habit to form, indicating that there is a high chance this change could be here to stay.






Bibliography

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