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2016 Ethical Labels Year in Review: Key Developments and Takeaways, from Clean Labelling to Cocoa

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December 17th, 2016

Few could have predicted the impact that events in 2016 would have on ethical consumerism. Clean labelling was undoubtedly the hot topic of the year. Within this, there have been a multitude of developments; however, none were as prevalent and divisive as the struggle to make GMO labelling in the US a mandated reality. Meanwhile, in Europe, the Danish Council on Ethics pondered what a universalisable definition of natural might look like, outlining the challenges and barriers that continue to lie in wait. While in sustainable trade and farming, Mondelez dealt a serious blow to Fairtrade by moving away from sourcing cocoa from the well-known certifier and taking control of its sustainability strategy for this key commodity.

Defining natural: Is mission improbable becoming mission impossible?

2015/2016: The story so far

Much has been pondered about how to overcome the challenges of defining natural. Evading a practical definition, natural remains trapped in the realm of the philosophical, an experiment of sorts for regulatory bodies that all show a reluctance to make the first move beyond the theoretical. In many ways it appears that the cart is leading the horse, as ‘all natural’ claims in packaged food and beverages in 2016 amounted to value sales of USD40 billion. To many brands that contribute to this global figure, a practical definition could have long-term implications for their future positioning.

The market is so developed that there has been a hesitancy amongst regulatory bodies to formalise a definition that could trigger a backlash. The FDA has been under pressure for several years to define the term, and it has made progress on this front. However, a formal definition continues to reside predominantly in the philosophical ether.

In a paper entitled, Climate Damaging Foods, The Danish Council on Ethics allocated some time to discussing the ethical paradigms that would be needed to underpin a natural definition.It seems difficult to determine what it means that foods are natural [sic]. But even if we could come to an agreement, the next question is whether something is good or ethically valuable because it is natural? Which leads us to ask if something is bad if it is unnatural?’ Well, we know that the short answer for many consumers would be a resounding yes.

2017: Euromonitor International predicts

The smart money would suggest that natural will still evade any practical definition in 2017. As the FDA sifts through the thousands of comments received from various actors on what should constitute a definition, other ethical and regulatory affairs bodies remain unsure as to how to tackle this.

The Danish Council on Ethics may have made great strides in identifying the myriad challenges of defining the term; yet, overcoming these challenges is a discourse that will extend well beyond 2017. As the Council stated; ‘In reality, it is thus extremely difficult to find a meaning of natural that captures the many ways in which the concept is used. In the food area, it is even more difficult since almost all foods are grown or processed by humans, so according to several of the mentioned definitions no foods are natural.’ At some point, it seems a step must be taken beyond the realms of philosophical rigour toward a universal praxis of reason.

US GMO labelling

2015/2016: The story so far

In 2015, packaged food and beverage products in the US bearing a GMO Free claim generated value sales worth USD4.7 billion, with the category created from the regulatory stagnation that plagued any efforts to introduce mandatory GMO labels. For US consumers, mandatory GMO labels have been a long time coming, and in 2016, President Obama signed into law federal legislation supporting H R 15999 – Safe and Accurate Food Labeling Act of 2015, along with the Roberts-Stabenow Biotech Labeling act, a bipartisan compromise on labelling reform, that has satisfied some consumers. Others have been heavily critical of the legislation, voicing their concern over the new-age definition of labelling, whereby manufacturers can use QR (quick response codes) on packaging in lieu of an explicit packaging claim highlighting the presence of genetically modified ingredients within the product.

2017: Euromonitor International predicts

The introduction of mandatory labels, even via QR code, could essentially mitigate the need for GMO free claims going forward; yet President Elect, Donald Trump’s appointment of Senator Pat Roberts (one of the loudest proponents of biotech and sponsors of the DARK act and designer of the aforementioned eponymously named Roberts-Stabenow GMO labelling bill) to his agricultural advisory board has cast serious doubt over how committed this administration will be in tackling GMO transparency issues going forward.

A revised sustainability strategy from Mondelez threatens to weaken the Fairtrade foundation

2015/2016: The story so far

Fairtrade has a major advantage over many other sustainable and responsible sourcing bodies. Consumers recognise it. Euromonitor International survey data shows that 13.2% of consumers in the UK seek Fairtrade as a desirable feature in packaged food and beverages, up from 9.4% in 2015. Awareness of sustainability is increasing, but that does not mean that it has all been plain sailing for the certifier.

In a massive blow to the certifier, Cadbury has decided to forge its own path. In 2015, Mondelez accounted for 47% of all Fairtrade sales across packaged food, soft and hot drinks, with Cadbury Dairy Milk generating sales worth USD1.2 billion.

2017: Euromonitor International predicts

Despite the blow, Fairtrade will continue to expand on current certification estimates of approximately 4,500 products in 74 countries, and will look to broaden this base while attracting more well-known brands in an effort to fill the gaping void left by Mondelez. Meanwhile, Mondelez is free to further innovate and tailor its sourcing policies under its Cocoa Life initiative while remaining committed to Fairtrade sugar. The goal is to invest more in its supply chain and make farming more profitable through bonuses for farmers, while also focusing efforts on tackling climate change and bringing about a five-fold increase in the amount of sustainable chocolate brought to the UK market by 2019. Competitors operating under the Fairtrade/Rainforest Alliance/UTZ certified banners may look to emulate Mondelez and develop their own standards of sourcing sustainable cocoa.

A glance at what 2017 has in store for ‘ethical’ consumers

The next big issue will likely be heightened awareness of companies’ carbon footprints. The melting pot of UN sustainable development goals, deforestation as a direct result of creating palm oil plantations, combined with what will then be President, Donald Trump’s, questionable commitment to tackling global sustainability issues will likely mean that ethical activists will focus their attention on ensuring these contentious issues aren’t ignored or forgotton. Scott Pruitt, who was described as a ‘climate science denier’ has been appointed to head the Environmental Protection Agency under Trump. Some of Pruitt’s past performances have worried environmental groups, that are unsure what the future holds for an administration that has demoted climate change to a policy footnote. The attention this garners in the US will likely mean an enhanced focus on conservation by consumers further afield, Western Europe especially.

Beyond this, sourcing commodities in a sustainable and responsible fashion, whilst moving away from artificial ingredients will be the flavour of the year. Winning consumers’ hearts and minds through untraditional CSR reporting styles (think Twitter and Instagram instead of comprehensive reports neatly wrapped in corporate jargon) will also be a bandwagon that shows no sign of slowing.

Have a question or a thought to add? Leave us a comment below.

Alan Rownan

Alan Rownan is an Ethical Labels analyst at Euromonitor International. He has a master’s degree in Ethics from Dublin City University. His professional interests include environmental ethics and the burgeoning role of corporate social responsibility in business.

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