British shoppers convert to ethical products

Retailers and producers who have continued to convert to Fairtrade and to sell sustainable produce during the downturn are helping to maintain ethical sales growth.

That is the conclusion of the Co-operative Group’s annual Ethical Consumerism Report, which shows that, despite the economic downturn, sales of ethical goods and services have remained resilient, going up almost nine per cent last year.

The authoritative report, which has been tracking shopping trends for more than a decade, shows that ethical sales in the UK went up 8.8 per cent last year from £43bn to £46.8bn.

Acting as a barometer of green spending since 1999 when annual ethical sales were just £13.5bn, the report analyses sales data for various sectors including food, household goods, eco-travel and ethical finance.

In 2010, expenditure on ethical food and drink increased 5.1 per cent per cent to reach £6.6bn. Fairtrade food sales grew by 36 per cent to reach £1.02bn, while sales of fish from sustainable sources grew 16.3 per cent.

Sales of small scale micro-generation increased a massive 386 per cent from £51m to £248m, green car sales were up 129 per cent from £370m to £846m, expenditure on green funerals increased 34 per cent from £5.1m to £6.9m .

Monies in ethical savings and investments grew 9.3 per cent from £19.3bn to £21.1bn year on year. This included the emergence of peer-to-peer lending, whereby individuals can lend direct to micro-entrepreneurs in the developing world.

However, not all ethical expenditure increased. Sales of organic food were down 10 per cent year on year at £1.53bn, which means it has decreased 23 per cent since its peak of £1.99bn in 2008.

Paul Monaghan, Head of Social Goals at the Group, said: “The report shows that intervention by enlightened businesses, together with regulatory intervention, is driving ethical sales growth.

“During the downturn we’ve seen some of the biggest ever Fairtrade conversions, be it in chocolate or sugar, and business is beginning to respond to the challenge to provide consumers with more sustainable products and services such as fish, palm oil and soya.

“Ethical consumers are still a vitally important barometer of change; however, the actions of progressive business are now a significant contributor to sales growth.

“At the same time, let’s not lose sight of the fact that ethical sales remain a small proportion of total sales. Ultimately, over and above the efforts of responsible business and ethical consumers, sustainable solutions require a government committed to long term intervention; such as an effective feed-in-tariff programme, to maintain the economic viability of the micro-generation market.”