- dialogue between farmers and consumers - responsible ... · o consumption patterns have changed...

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.

Thank you very much!

Sebastian Koosskoos@sowi.uni-mannheim.de

Backup Slides

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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.)