BLOG POST: Sustainable & organic products are almost always priced higher than their regular counterparts. The truth is, the less-privileged are being priced out of sustainable and ethical consumer options and this is in itself wrong for many reasons. We believe that sustainable choices should be affordable to all. I'm Shrikant Ramakrishnan, Global Business Development Director at Plantagon. The ideas and thoughts presented here are my personal views and need not subscribe entirely to Plantagon.
Our globally competitive lifestyles and our intrinsic struggle for value-addition in life, leads us to many subconscious behaviors.
- Eat organic and 100% safe food.
- Choose an electric car over a gas-guzzler.
- Buy high-quality clothes made by fairly paid workers.
These societal calls to support sustainable and ethical products have grown louder and more frequent in recent years. And in our daily quest to form part of a more humane bandwagon, we stretch ourselves continually. But while responsible consumption advocates mean well, they often overlook the fact that not everyone can afford these sustainable and completely healthy foods, which are usually more expensive than mass-market store brands or fast fashion. That’s the fact today.
We however argue, sustainable choices should be affordable to all - even those with a tighter purse string. The truth is, the less-privileged are being priced out of sustainable and ethical consumer options and this is in itself wrong for many reasons.
First, there is a fundamental injustice that access to pesticide-free food and non-toxic household items are a privilege only for the wealthy. Second, environmentally conscious observers may assume that those who don’t buy responsible or ethical options are ignorant or apathetic. But this moral judgment is often misplaced, as many people simply cannot afford them. Third, the ideal of a “responsible consumer society” – which the United Nations picked as its World Environment Day theme last year – will never be realised if environmentally and socially sustainable goods remain out of reach for an entire cross-section of society – developed or developing, east or west, black or white.
But the good news is: There are plenty of excellent ground-up and technological movements working to disrupt this status quo and bring healthy and safe daily essentials to people in an affordable way. Food is one intrinsic catalyst in this movement.
These include urban farming and local food cooperatives that allow communities to grow their own organic food, and sites that are being re-framed inside cities allowing the growth of industrial scale 100% safe food, creating a new industry paradigm. However, it is not yet possible to by-pass buying from retail stores altogether. New direct to consumer business models need to break ground for such industrial scale of productions and thereby to make everyday products easily affordable to all.
But the key question remains - do the sustainable products in supermarkets have to be so much more expensive than their mass-market counterparts? And what can companies; policymakers and consumers do to help get these products into the mainstream market?
Food Supply chain transparency.
In the first place, we should look at how transparent companies are, especially about the price mark-ups of the sustainable products in their portfolio. Sometimes, sustainable products cost several times more than mass-market alternatives. It’s not always clear if the prices are proportional to the product’s quality, or simply due to opportunistic marketing to affluent consumers.
Of course, responsible manufacturing doesn’t come cheap. Obtaining environmental, technical and social certifications is a resource-intensive process, as is running a supply chain, which follows industry guidelines on sustainability, fair labour practices, and reporting. Similarly, a low price tag often indicates that the people behind it - from farm workers to seamstresses - were not paid a fair wage.
But the lack of crucial data makes it difficult to determine whether the high cost of sustainable products is justified or just marketing targeted at the rich – and the only way to get this information is for companies to report it.
Companies have traditionally been tight-lipped about their finances, arguing that revealing such information would undermine their competitiveness. But in the arena of safe food with a growing urban population, there must be continuing growth proving that honesty doesn’t have to mean commercial suicide.
For any firm that does the same, determining if a mark-up is fair is bound to be subjective. But if prices are several times more than the cost price, then consumers should question if making goods only for an exclusive segment is truly ethical, or just hollow marketing.
Here, governments can play a part in helping to defray the costs associated with making a product sustainable, whether it is providing grants for innovating cost-effective technologies or subsidizing enterprises applying for sustainability certifications. They can also help by introducing legislation on minimum sustainability standards for products.
Singapore is my favorite example here. I love the Singaporean perfectionism and the spirit of survival that exists and percolates in the society. Singapore already has some schemes in place, such as the National Environment Agency’s Environment Technology Research Programme , which provides seed funding for solutions which enhance energy efficiency, reduce waste and air pollution, among others. They also have schemes that help increase their ‘greening’ at all levels – homes, offices and infrastructure alike.
The public sector can also support sustainable companies by creating demand for their products. The Singapore government’s recent move to buy only paper products that carry the Singapore Green Label - a sustainability certification by the non-profit Singapore Environment Council - exemplifies this. The next move could be to resort to increasing their own food production to much larger benchmarks, say for e.g. urban food production to be 40% over the next 10 years using resource efficient methodologies including minimal water utilization, energy system in balance, waste to energy and energy storage and re-distribution systems.
Wouldn’t it be more cost effective for companies to stop spending money on developing, designing, and marketing multiple unsustainable brands, and instead put their wood behind fewer, sustainable arrows?
Above the standard benchmarks.
The other issue that needs to be addressed is the wide spectrum of standards in the consumer marketplace. Sure, there are government regulations governing minimum safety and environmental standards for all products, but these often do not go far enough to ensure important outcomes like absolutely no deforestation or labour exploitation or 100% safe food.
Governments are constantly tightening standards, but bureaucratic progress can be slow. There is no reason for companies to passively wait for policies when they can take the lead on improving sustainability across their product lines - not just for altruistic reasons, but because there is a strong business case for doing so. But even so-called sustainability leaders have products in their portfolios with varying levels of safety and sustainability.
Unilever, for example, makes St. Ives, a personal care brand marketed as all natural and free of parabens, a preservative with suspected but unconfirmed links to cancer.
The same company also makes Simple lotions and cleansers, and freely admits to using parabens for these, saying that they are safe for human use. This inconsistency is disturbing. Shouldn’t companies apply the same standards to all their products?
These are just some ways that the private sector can ensure that their business helps the rich and poor alike. We should all keep up the pressure on companies to do this, whether through community advocacy, social media posts, or petitioning manufacturers to make more sustainable products.
Those of us privileged enough to be able to afford ethical options should continue to buy them, to send a signal to companies that there is demand for these products. Some companies may take this as a sign to continue with business as usual.
But more visionary players can use this consumer support to make a mass-market solution, like what American electric carmaker Tesla did when it launched the US$35,000 Model 3 last quarter. The company’s chairman Elon Musk noted that the Model 3’s development was supported by profits from earlier Tesla cars, which sold for about US$100,000 each.
Making environmentally and socially responsible products the new normal for all consumers should be a top priority for all companies today. As long as it isn’t, this failure will always undermine their sustainability claims or worse, their bottom line.
On behalf of affordable sustainability, I wish to keep our conversations moving forward. More to come on commercial possibilities for industrial urban farming projects and the macro-economic views on what global oil prices and food-inflation have in common, or maybe not.
Global Business Development Director
Plantagon International AB
DISCLAIMER: This is a blog. That fact means nothing. It is not a peer-reviewed journal, a final archive of my writing, a sponsored publication, or the product of gatekeeping and editing. That does mean something…it means that while the ideas and thoughts are often vital and personal, the writing and views need not subscribe entirely to Plantagon. It is essentially as it came from the keyboard: spontaneous, unproofed, unrevised, and corrected afterward only when necessary to address mistakes that grossly effect the intent. Where such changes have been made they are explicitly noted… In your response section, try and be polite please.
Please watch out for up-coming blog post by:
- Sepehr Mousavi, Sustainability Strategist, Plantagon and Chair to Swedish Standards Institute ‘Sustainable Urban Food Production’ committee
- Joakim Rytterborn, Head of Research & Development at Plantagon