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Responsible consumption across Europe:
How do consumers take ethical and environmental issues into
account when making their purchases?
EESC - dialogue between farmers and consumers -
Sebastian Koos
2
Agenda
1. What is responsible consumption?
2. To what degree does responsible consumption take place in Europe and globally?
3. Why do consumers engage in responsible consumer behaviour?
4. What enables and hinders consumers to engage in such behaviour?
5. How much power do the consumers have?
1. Consumer Responsibility
What is responsible consumption?
4
1. Definitions
o Political consumption: “actions by people who make choices among producers and products with the goal of changing objectionable institutional or market practices” (Micheletti 2003: 2).
o Sustainable consumption: “the use of goods and services that respond to basic needs and bring a better quality of life, while minimizing the use of natural resources, toxic materials and emissions of waste and pollutants over the life-cycle, so as not to jeopardisethe needs of future generations.” (OECD 2002: 16)
Responsible consumption: “Actions by people who take into account the public consequences in the obtainment and private usage of economic goods and services”.
5
Two basic manifestations:1. Boycott punishment
2. „Positive buying“ or „buycott“ reward
1. Manifestations
2. The rise of responsible consumption
To what degree does responsible consumption take place in Europe and globally?
7
2. The rise of responsible consumption from 1997 to 2010 across 8 European countries
Note: Mean values across: Belgium, Denmark, France, Germany, Netherlands, Spain, Sweden, United Kingdom.Sources: “Fair Trade in Europe” (Krier 2001; 2005; 2007; Martinelli 1998); “The World of Organic Agriculture”(Richter and Padel 2005; Schaer 2009; Willer and Toralf 2004; Willer and Yussefi 2007); European Social Survey (2002/3 to 2009/10); European Value Study (1999/2000).
0
10
20
30
40
50
60
70
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Epe
nditu
re (i
n €
per
capi
ta
0
10
20
30
40
50
60
70
Shar
e of
res
pond
ents
(in
%)
Organic food (in € p.c.)
Fair Trade (in € p.c.)
Participation in boycotts (in %)
8
2. Organic food consumption in € per capita across Europe 1997 to 2010
Germany
Denmark
France
Netherlands
Sweden
SpainGreat Britain
USAEU-7
0
20
40
60
80
100
120
140
160
1997 2000 2002 2003 2004 2005 2006 2007 2008 2009 2010
Exp
endi
ture
for o
rgan
ic fo
od (€
p.c
)
Note: Denmark, France, Germany, Netherlands, Spain, Sweden, United Kingdom, USA.Sources: “The World of Organic Agriculture” (Richter and Padel 2005; Schaer 2009; Willer and Toralf 2004; Willer and Yussefi 2007); BÖLW (2008-2012)
9
2. Market share of organic food of total food market 1997 to 2008 in (%)
Germany
Denmark
Sweden
Great Britain
USA
0
1
2
3
4
5
6
7
8
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
Mar
ket s
hare
of o
rgan
ic fo
od (i
n %
)
GermanyDenmarkSwedenGreat BritainUSA
Note: Sources: “Daugbjerg and Sonderskov (2012).
3. Explaining consumer behavior
Why do consumers engage in responsible consumer behaviour?
11
3. A simple model of consumer behavior
o Desires: action is purposefully oriented towards certain ends (Weber 1920).
o Constraints: action is restricted by opportunities(Elster 1989).
o Beliefs: proposition about the world held to be true govern actions (Hedström 2005)
Constraints
Desires
ConsumptionActor Beliefs
12
3. Desires
o Theoretical expectations: Pro-environmental, post-materialist, altruistic
values guide organic food consumption.
o Empirical findings:Organic food consumption is driven by pro-
environmental and post-materialist values and preferences.
Also self-interest plays an important role (health, quality, being fashionable).
13
3. Cultural Change in Europe
0
10
20
30
40
50
60
70
70 71 73 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 97
Materialist ValuesMixed ValuesPost-materialist Values
Note: Inglehart Scale. Mean values across: Belgium, Denmark, France, Germany, Netherlands, Spain, Sweden, United Kingdom.Source: Eurobarometer Trendfile.
Post-materialism has importantimpact on organic food consumption!
14
3. Constraints
o Theoretical expectations: Individual resources and opportunities restrict
organic food consumption by monetary, transaction and opportunity costs.
o Empirical findings:Especially household income and higher
prices for organic goods restrict purchases.Furthermore, the availability of organic
(labeled) goods is an important constraint.
15
3. Purchasing Power and ConsumerPrice (Food) across Europe 1995 to 2008
0.0
2,000.0
4,000.0
6,000.0
8,000.0
10,000.0
12,000.0
14,000.0
16,000.0
18,000.0
20,000.0
1995 1996 1997 1998 19992000 2001 2002 20032004 2005 2006 2007 2008
Netto
per
cap
ita in
com
e in
(PP
S)
0
20
40
60
80
100
120
Cons
umer
pric
e in
dex
Purchasing power (in PPS)
Consumer price index (2005=100)
Note: Mean values across: Belgium, Denmark, France, Germany, Netherlands, Spain, Sweden, United Kingdom.Sources: Eurostat “Harmonised indices of consumer prices (HICP)”; Eurostat Household Income.
16
3. Average price premiums of organic food (in %) across 7 European countries in 2001 (28 products)
Average price premium (in %)
79 7668
62
53 51
39
0
10
20
30
40
50
60
70
80
90
Germany Netherlands Belgium Denmark France Great Britain Sweden
Sources: Hamm and Gronefeld (2004).
17
3. Willingness to pay more for organicfood (apples)
1
148
51 5249
14
26
0
20
40
60
80
100
Germany Denmark Great Britain
WTP
mor
e fo
r org
anic
app
les
(in%
)
EU LogoGovernmental Logo DemeterSoil Asscociation
Note: Willingness to pay in percent above market price.Sources: Janssen and Hamm (2011).
18
3. Willingness to pay more for organicfood (eggs)
21 20
5
92
54
102
2227
0
20
40
60
80
100
Germany Denmark Great Britain
WTP
mor
e fo
r org
anic
app
les
(in%
)
EU LogoGovernmetn Logo DemeterSoil Association
Note: Willingness to pay in percent above market price.Sources: Janssen and Hamm (2011).
19
3. Beliefs
o Theoretical expectations: Beliefs that organic food is better for the
environment, healthier, of better quality, fashionable, more ethical and safer govern organic food consumption.
o Empirical findings: People belief organic food is:1. Healthier2. Better for environment3. Better quality and higher food safety4. Fashionable
20
3. Socio-demographic profile
o There is little consistency in socio-demographic findings, but most studies find organic food consumers are: FemaleOlderHave children Are better educatedHave a medium to high income
These factor seem to be changing!
4. Contextual determinants
What enables and hinders consumers to engage in such
behaviour?
22
4. The contextual embeddedness of responsible consumption
Constraints
Desires
ConsumptionBeliefs
Retailing Structures
Labeling
Affluence
Culture
Media coverage
Food Scares
23
4. Food Scares across Europe
Note: *Imported Animals; - Limited information.Source: Knowles et al. (2007), page 54. Food scares have some limited
impact on organic food consumption.
24
4. Media Coverage of organic food in Denmark 1996 to 2002 (Jyllands-Posten)
0
10
20
30
40
50
60
70
80
90
Jahr 1996 1997 1998 1999 2000 2001
Tota
l num
ber
of n
ews
item
s
0
10
20
30
40
50
60
70
80
90
100
Posi
tive
and
nega
tive
repo
rts (%
)
Total positiv negativ
Note: Articles about organic food and percentage of relative negative and positive framing.Source: Thøgersen (2006), page 152.
25
4. Media Coverage of organic food in Germany 1992 to 2010 (Süddeutsche Zeitung)
Note: Articles about organic food and percentage of relative negativeand positive framing.Source: Archive of “Süddeutsche Zeitung”, own analysis.
0
5
10
15
20
25
30
35
40
45
1992 1994 1996 1998 2000 2002 2004 2006 2008 2010
Tota
l num
ber
of n
ews
item
s
0
10
20
30
40
50
60
70
80
90
100
Pos
itive
and
neg
ativ
e re
ports
(%)
Total Positive Negative Media coverage has indirect impact on organicfood consumption.
26
4. Labeling
In general:o Labels: market-based voluntary policy
instruments, often jointly organized and issued by states and private NGOs.
o Most important policy innovation for increasing responsible consumption, because of:
• Standards • Information• Recognition• Availability
Availability (presence and suppyl) of labeled products has an important positive effect on organic consumption.
27
4. Organic Labeling
Three important aspects: Findings:
1. Number of organic labels Consumer confusion no impact
2. State involvement into labeling Better information, possible sanctions and
higher trust. no impact
3. Credibility of labels and certification Trust in label strong impact
28
4. Retailing Structures
o Sales channels:corner stores & specialized shops
- versus -supermarkets
Countries differ in their retailing structures.
The dominance of supermarkets in a country as a main sales channel of organic food increases organic food sales.
29
4. Affluence as a low costcondition
.1.2
.3.4
.5.6
Pre
dict
ed P
roba
bilit
ies
-2 -1 0 1 2 3Self-Transcendence Values
High Affluence (Switzerland) Low Affluence (Poland)
Affluence provides an economic opportunity structure(low cost condition) and increases organic food consumption.
30
4. The „Financial Crisis“
Germany
Denmark
France
Netherlands
Sweden
SpainGreat Britain
USAEU-7
0
20
40
60
80
100
120
140
160
1997 2000 2002 2003 2004 2005 2006 2007 2008 2009 2010
Expe
nditu
re fo
r org
anic
food
(€ p
.c)
Organic food expenditure in € per capitaacross Europe 1997 to 2010
31
4. The „Financial Crisis“
Belgium
Germany
Denmark
France
Netherlands
Sweden
Spain
Great Britain
0
5
10
15
20
25
2004 2005 2006 2007 2008 2009 2010
Fair Trade expenditure in € per capitaacross Europe 2004 to 2010
5. Consumer power
How much power do consumers have?
What to learn?
33
5. Consumer sovereignty
Two positions:o Liberal position (Von Mises):
“The real bosses, in the capitalist system of market economy, are the consumers“(1944).
o Critical position (Adorno & Horkheimer):“Consumer as a subordinate to the ‘culture industry‘“ (1944).
Some truth to both!
34
5. The power of consumers
Increasing power of consumers due to:o Higher affluenceo Larger selection and supply of goodso Better shopping opportunitieso More information (consumer and testing
associations, labels, internet)Change from seller to buyer market
But:o Complexity of modern mass marketso Limited power of consumer sanctions
35
5. Summary
o Consumption patterns have changed considerably during the last decades. Responsible consumption is on the rise.
o Reasons are changing values, economic conditions, consumer policies (labeling) and beliefs about “good“ food.
o Some limitations remain, mainly due to economic restrictions, a lack of information and trust.
Backup Slides
38
Organic consumption (2007)
1
2
2
5
5
7
12
13
17
27
30
30
32
42
53
64
86
89
106
0 20 40 60 80 100 120
Poland
Hungary
Slovenia
Czech Republik
Greece
Portugal
Finland
Spain
Ireland
Belgium
France
Netherlands
Italy
Great Britain
Sweden
Germany
Luxembourg
Austria
Denmark
Quelle: World of Organic Agriculture 2009
39
2. Fair Trade expenditure in € per capita across Europe 2004 to 2010
Belgium
Germany
Denmark
France
Netherlands
Sweden
Spain
United Kingdom
USA
0
5
10
15
20
25
2004 2005 2006 2007 2008 2009 2010
Expe
nditu
re fo
r Fai
r Tra
de g
oods
(in
€ p.
c.)
