Sustainability and Made in Italy, Immagino Observatory on consumption

Sustainability is the ‘hot topic of these months, even in the fast-moving consumer goods world’. And so the Immagino Observatory, in its sixth edition (Oi 2019-2), dedicates a special insight to it. Without neglecting  Made in Italy and short supply chain, the cornerstone of our consumption. An insight.

Immagino Observatory. The consumption scenario through labels

The Immagino Observatory – created by GS1-Italy, with the support of Nielsen – has become in a few years the main source of information regarding FMCG consumption (Fast Moving Consumer Goods) in Italy. With the unique worldwide prerogative of tracking sales thanks to the exact identification of each shelf-exposed item. Through the Immagino system introduced by GS1-Italy has introduced in Italian retail, at the planetary forefront.

‘Product labels tell the story of Italian consumption’. A noteworthy aphorism, the consumer buys what they identify through a set of descriptions. And consumption statistics can be disaggregated to the point of identifying consumption trends of products that, in different categories, express various concepts (e.g. organic, fair and sustainable,  Made in Italy).

The number of items listed in the Immagino Observatory report now under review exceeds 106,000. (1) 30,000 SKUs (Stock Keeping Unit) more than previous edition, which already offered a broad and representative scenario of the Italian market in 2018.

Sustainability, demand and supply

Consumers' expectations on the topic of supply chain sustainability are very high. The Nielsen survey highlights the following:

• 74% of respondents consider ‘extremely’ or ‘very important’ that mass market companies adopt actions to protect the environment, ensuring greater respect for ecosystems, people, and animals.
• 61% declare themselves ‘quite sure’ (45%) or ‘very sure’ (16%) to change their consumption and purchasing habits to reduce their environmental impact,
• 20%  is ‘willing to spend more to buy products that offer quality, safety and respect for the environment’. (2)

Industry and distribution have been able to intercept this consumption trend quite quickly, considering the time and resources required to reorganize supply chains and processes, but also just to plan new product lines. Without ever underestimating the risk, of the effect  boomerang of mere  greenwashing.

The ‘basket  green’ on supermarket shelves

The ‘basket  green’ composed by the Immagino Observatory consists of 19,182 products, which stand out because they display on the label at least one  claim related to the idea of ‘sustainability’. This refers to 18.0% of shelf references and 19.4% of turnover. With €7 billion sales in hypermarkets and supermarkets channels, in the 12 months ending June 2019 (+3.4%).

‘Sustainability is making its way onto labels, in some cases taking up more space than the brand itself, becoming itself a brand. Thus, consumers attentive to environmental respect topics will be influenced by how the material of a water bottle is communicated (or not), whether it is recyclable, or even compostable. New claims timidly appear referring to supply chain, traceability, absence of antibiotics, probiotics, polyphenols, sustainable agriculture, flavored, spiced, gourmet… and not only’ (Marco Cuppini, Immagino Observatory, GS1-Italy).

The labels examined, it is worth reiterating, are subject to a statistical analysis that is useful to record a variation, even significant, in the presentation of products on the shelves. But it is evidently not suitable to assess the reliability nor the actual meaning of individual commercial information with respect to the sustainable development goals whose scope, as has been seen, must include a wide range of elements.

The statements on the label relating to ‘sustainability’ have been divided, in the report under examination, into four areas:

1) resources, ‘sustainable’ management

2) agriculture and livestock, ‘sustainable’ methods,

3) workers and forests, respect and protection,

4) sustainable fishing and respect for animals, adherence to protocols.

Sustainable resource management

The 11  claim considered in this area are ‘sustainability’, ‘sustainable cleaning’ (certification), ‘reduction of environmental impact’, ‘with recycled material’, ‘without phosphates’, ‘biodegradable’, ‘plant-based’ (in home care and personal care), ‘waste reduction’, ‘reduction/control of CO₂ emissions’, ‘Ecolabel’ (non-food, certification), ‘less plastic’.

5,841 products, 5.5% of the ‘green basket’, display on the label one or more of the above indications. 2.854 billion euros in sales, growing (+3.9%, 8% of the basket). ‘42.8% of turnover is generated by home care products, including standout items such as laundry washer products (strong growth), fabric softeners and dishwasher detergents. Followed by grocery products (25.5%) and refrigerated products (12.5%)’. Only 193 brands involved.

‘Sustainability’is the ubiquitous word, referring to the preservation of territory and resources, rather than agriculture and livestock, (3) working conditions and environment. €1.359 billion in sales (3.8% of total mass consumption), growing (+4.0%).

Waste reduction and ‘packaging sustainable’ report double-digit growth. Sales increase of products boasting waste reduction during consumption (e.g. controlled dosing, special dispensers, +17.7%), as well as various ecological packaging (+26%). However, it still neglects – we add, recalling a lesson by Mario Gasbarrino (former CEO of Unes-U2 Supermarkets) – the crucial value of the paradigm shift on detergents and cleaners, which should only be sold in concentrated form (with huge savings on packaging and transportation).

The commitments  to reduce or offset CO2 emissions are still too scarce, given the growing and necessary attention to  climate change. Only 19 companies out of 206 of the more than 106 thousand products analyzed by the Immagino Observatory report this. And the indication ‘less plastic’, found on only 132 packages, although increasing (+19.5%, €48 million).

Sustainable agriculture and farming

The indications related to sustainable agriculture and livestock under consideration are ‘organic/EU organic’, ‘GMO-free’, (4) ‘100% natural ingredients’, ‘antibiotic-free’, ‘organic personal care’, ‘Ecocert’ (certification), ‘supply chain/traceability’.

A total of 10,367 products for €2.245 billion of  sell-out (6.3% of the total), with lively annual growth (+5.7%):

– the  organic dominates the scene with 7,227 products and over €1.1 billion turnover (+2.8%),

– supply chain guarantees and traceability of (controlled, certified, guaranteed, Italian and local supply chain, short supply chain and zero km), on 861 labels for €488 million of  sell-out, are a rising star (+15.4%),

– ‘antibiotic-free’ literally flies (sell-out +87.1% sold), with remarkable growth in supply and demand, ‘confirming the ample space available to expand assortments in the future’. (5)

Fair supply chains and sustainable fishing

Social and environmental responsibility expressed through certifications on fair supply chains, respect for workers and the environment is associated with the names of organizations operating in these areas (e.g. ‘Fairtrade’, ‘FSC’, ‘UTZ’). 4,226 products, €2.15 billion turnover (+1.4%).

The protocols for sustainable fishing certification and animal welfare – such as ‘Friends of the sea' and ‘cruelty free’ are still marginal, unfortunately. 939 products (0.9%) and €437 million in sales, though increasing (+2.3%).

Made in Italy, 100% made in Italy

The tricolor cart it stands out for indications such as ‘made in Italy’, ‘product in Italy’, ‘only Italian ingredients’, ‘100% Italian’ and geographical indications (PDO, PGI, PDO, DOC, DOCG). In addition to the names of the Regions and the Italian flag. It is the most significant phenomenon, involving 25.2% of products on the shelf. Almost 20 thousand products (19,228), over 7.1 billion euros in turnover.

‘Italian identity has forcefully and seemingly permanently entered the shopping cart: now one in four products purchased in supermarkets and hypermarkets bears a label referring to its national origin’. (Immagino Observatory)

The Italian flag is the most widespread sign, on 14.5% of the products surveyed. It now triggers the obligation, among other things, to indicate on the label the different origin of the primary ingredient (pursuant to EU regulation 2018/775, from 1.4.20). ‘100% Italian’ gains further support (+3.5%), as well as regional identities (+2.6%) which alone generate over 2.34 billion euros, 10.8% of the food references detected by the Immagino Observatory.

Sustainable shopping and short supply chain, the path is marked. The  blockchain, an opportunity to guarantee facts beyond words. (6)

Dario Dongo and Sabrina Bergamini

Notes

(1) The Oi 2019-2 report can be downloaded for free at  https://osservatorioimmagino.it/

(2) Source  Nielsen Sustainable Shoppers Report 2018, cited in the document in note 1

(3) NB: the concept of ‘sustainable agriculture’ is often abused, as it is a common feature of all agricultural products made in the EU based on mandatory requirements. See https://www.foodtimes.eu/it/pianeta/agricoltura-sostenibile-labc/ 

(4) The concept ‘GMO-free’ presents, in the opinion of the author, an interesting development opportunity in animal-origin foods from ‘GMO-free’ supply chains. That is, without the use of GMO soy in the feed of farmed animals (see https://www.foodtimes.eu/it/consumatori-e-salute/i-crimini-dell-amazzonia-nelle-nostre-dop/Reverse attention should be paid to the risk of 'new GMOs' (NBT) in fruit and vegetables (e.g., endive)

(5) It is no coincidence that the survey conducted by Efsa for the Eurobarometer on 7.6.19 indicated antibiotic residues in food at the top of the list of European citizens’ fears. See https://www.foodtimes.eu/it/consumatori-e-salute/i-timori-nel-piatto-indagine-di-eurobarometro/ 

(6) Provided that it is true  blockchain, public and interoperable, and not a fraudulent presentation as ‘blockchain’ of closed systems that have nothing to do with it. See the article https://www.foodtimes.eu/it/consumatori-e-salute/blockchain-vero-o-falso-la-frode-allangolo/