Oatly’s done it. Quorn’s done it. Two supermarket heavy hitters are proudly publishing their carbon footprint on their packs and a number of eco-minded brands are following. They clearly feel that calculating and publishing their carbon footprint is worth the time and investment, especially if they can demonstrate a lower footprint than their rivals.
I saw carbon labelling being heavily hyped back in the noughties, when Tesco was making headlines with a promise of “a revolution in green consumption” in 2007. Their ambitious pledge to carbon label 70,000 SKUs — including orange juice, toilet roll and milk — was regretfully dropped in 2012. Albeit the carbon label pioneers of Big Retail, Tesco found the process just too laborious, slow and costly, with other retailers failing to follow their lead and give this initiative critical mass.
So, what has changed in 2020? Might carbon labelling actually deliver ROI now? Could critical mass be feasible?
A rapidly growing market
Carbon labelling is an immature market with exponential potential in terms of behaviour change and ROI — the market for sustainable produce and products is set to top £119 billion by 2021 in the US alone.
Labelling products with their carbon impact aims to give this ROI potential a framework — to help consumers learn valuable information, compare products and make their own judgements. According to a recent survey by The Carbon Trust, two-thirds of consumers in all countries surveyed said they are more likely to think positively about a brand that could demonstrate it had lowered the carbon footprint of its products. Improved brand loyalty equals better sales, right? Well, maybe.
Carbon labelling is a relatively new concept among consumers, so that little label has a big job to do — it needs to communicate, educate and inspire. Get it right and you’ll positively influence the buying behaviour of millions, make more sales, reward the most sustainable producers and feed a virtuous circle of supply and demand. Get it wrong and you’ll just confuse a lot of people.
So, what must food brand owners do for increased ROI and reach?
Make labelling credible, relevant, cost-effective and comparable.
1. Make it CREDIBLE
Oatly and Quorn have pioneered a DIY method and it’s a brilliant, ground-breaking, short-term route. It’s not a long-term approach because it doesn’t have third-party credibility and so doesn’t allow for critical mass. When competitor brands adopt carbon labelling as a new path to ROI, hundreds of siloed DIY carbon labelling systems will likely turn customers off (imagine 100+ different competing standards for nutritional content).
There are at least 457 eco-labels currently in circulation. For brands wanting to communicate their hard-earned carbon scorecard to their consumers, there’s a responsibility NOT to confuse and thus render the whole exercise moot.
So, it’s clear we need a credible, easy-to-understand comparison tool. A third-party labelling system can achieve this, along with a built-in guard against ‘greenwashing’. When a credible, widely used carbon labelling system is in place, we’ll see less wiggle room for corporates’ eco-friendly claims to be falsified, translating to an extra level of reassurance for consumers.
2. Make it RELEVANT
Most DIY carbon labels, such as Quorn, show a carbon measurement in KG CO2e per KG of product, making it difficult for consumers to decipher performance against competitors who may or may not be using the same approach.
Then there’s the ‘standards approach’; certifying products against certain attributes; e.g. ‘CO2 measured’ as with Carbon Trust. These solutions don’t offer the context consumers need to make informed decisions. At best, consumers ‘infer’ that the product is taking positive steps to improve carbon footprint but can’t tell to what extent. They certainly can’t choose between two products bearing the same stamp, which signals diminishing returns over time for producers, should a label become widely adopted by their competitors.
To provide relevant, behaviour-changing insights, we need benchmarks. We need to know what a score actually means, we need to know if it’s good or bad, and we need to know how one product stacks up against another. Oh, and we need to know quickly; such is the nature of consumerism.
3. Make it COST-EFFECTIVE
Based on industry averages, a peer reviewed, ISO-compliant life-cycle assessment (LCA) of a food product costs between £10K and £20K per SKU. And this is just for the raw report.
Companies that offer LCA-driven labelling services will charge still more to license a label for your product — with very few economies of scale to be found in manual consulting-led processes.
SME food companies in particular may find it prohibitively expensive to spank £50K-£100K on the product range without knowing that ROI is guaranteed. The cost of entry/adoption is simply too high.
To improve your chance of ROI, reduce the ‘I’ (Investment). Look out for challenger start-ups that are using tech to radically reduce the cost of labelling by automating tasks that used to be manual. And especially those that offer bundled packages for bulk labelling initiatives, e.g. 10 SKUs, 20 SKUs, etc.
4. Make it ENGAGING
Consumers want to be taken on a journey with you. Oatly are leading the way here, transparently announcing on the side of their pack that they’re going to give carbon labelling a shot — challenging other brands to follow. It’s plucky, admirable and astutely on brand.
They’re expertly showing the human nature of their business, disclosing the goals they’re setting and their impact, and reporting on progress. This builds rock-solid trust with loyal and new fans.
Current labelling solutions, whether DIY or third-party, offer little opportunity for consumers to learn more about your product, values and aspirations, apart from a little badge on the pack and (sometimes) a sustainability webpage.
Making labels part of an experience where consumers can dive into information about your product clearly shows your brand embraces transparency, which in turn increases brand loyalty.
Try and go for a labelling provider that offers enriched digital experiences for ‘off-pack’ engagement. QR codes that point through to websites, optimised for social sharing.
This creates a whole new dimension for your business to work in and, as you analyse consumer feedback, you can understand what’s working, what’s not, and optimise.
Carbon Labelling 2.0
Witnessing the amount of hurdles keen brand owners have to get over before starting any sort of carbon labelling initiative, I felt like there was potential to do better. That’s how Mondra was born. At its core sits the idea that carbon labelling solutions can be improved to unlock planet-positive profits for food & beverage businesses. Mondra in particular does it in the following ways:
Credibility and verifiability — Mondra is based on years of scientific research from leading academic institutions and is supported by WWF and Oxford University. With our framework and consortium of partners, credibility is hardcoded into everything that we do.
Relative Performance — Mondra’s labels allow businesses to understand how they compare to competitors in their own category and, importantly, show this information on labels in a single ‘eco score’ as well as online, allowing brand managers to reap the rewards of outperforming competition and allowing consumers to draw valuable insights out of the label.
Cost-effective — We leverage years of experience in building scalable data and cloud solutions and use our digital tools and automation to radically reduce the cost of labelling and offer bulk packages for economies of scale.
Engaging customers — With our labels, brand owners can use QR codes to bounce consumers to our online learning centre and their very own certification pages. This takes the physical product experience online and allows consumers to gain an unprecedented level of insight into business’ sustainability initiatives. The page is fully enabled for feedback capture to continuously optimise.
A brave new world for brand managers
Carbon labelling’s potential is ready to be realised. The early adopters have blazed the trail. As a passionate advocate, I see a credible third-party certification system, backed by transparent, verifiable scientific research, as the only way for consumers, brands — and the planet — to win.
Transparently communicate the right message about your product to consumers and you’ll build trust. Beat competitors in the carbon-efficiency arena fairly and squarely, and you’ll build loyalty at checkout. If you want to chat with me about how you can apply this ROI potential to your product, please do get in touch via LinkedIn.