Despite Slower Sales of Sustainable-Certified Products in Sweden, Demand for Transparency Remains

Despite Slower Sales of Sustainable-Certified Products in Sweden, Demand for Transparency Remains

Swedish consumers’ demand for sustainable-certified products slowed in 2019. But consumer concerns about the novel coronavirus (COVID-19) could result in growing demand for transparency, provided brands and retailers can clearly communicate their products’ benefits.

A recent study by Nielsen, in cooperation with WWF Sweden and Sustainable Supply Chain for Food in Sweden, shows that the market for sustainable-certified products in Sweden is increasing, but sales of these goods have increased less than the total market. This means that sustainable-certified products are losing market share, falling -0,5% between 2019 and 2017. The major drop is for organic products, which from 2018 to 2019 decreased by 176 MSEK.

Sustainable certified FMCG products share of sales and value sales development (Sweden 2019))

In the total category view, we can see consumer trends that may have impacted the development of sustainable-certified products. Given consumers’ appetite for being more ecologically friendly, some fast-growing categories, like vegetarian products, have seen outsized growth of non-certified products at the expense of the development of certified products. A good example of this is alternative milk substitutes like oatmilk.

There is still a demand for transparency among some of the Swedish despite the current crisis. A significant share of the Swedish consumers have changed their diet to either vegan, vegetarian or flexitarian. These consumers will only demand more transparency going forward all the way from the farm, through production, distribution and retailing to their kitchen. This leads to an opportunity for both retailers and manufacturers to work together in partnerships to help consumers to navigate through the increasing number of sustainable labels, categories and products.

And technology may provide an opportunity to serve consumers’ growing desire for transparency. With many Swedes working from home and digital connectivity taking even more of a hold on everyday habits, consumers will have greater motivations and fewer perceived barriers to more actively seek technology-enabled solutions to assist in everyday tasks like shopping. Companies that can leverage technologies—by meeting changing consumer demands online, enabling seamless interactions through direct-to-consumer offerings and enhancing consumer experience with augmented and virtual realities—have the opportunity to earn consumer loyalty well after consumers’ concerns subside.

However, the first step is doing in-depth analytical work to understand consumers preferences, and then setting new strategies for product innovations, in-store visibility, in-store communication, pricing and promotions. In all these steps, Nielsen can be your partner.