UK grocer Iceland leads way with resolve on packaging

UK grocer Iceland is among the retailers leading the way on packaging and, rightly, remains undeterred, Ben Cooper writes - even if consumer behaviour can be frustrating.

It is closeness to the consumer which, perhaps above all else, differentiates retailers from the food manufacturers that supply them. Brands can do much, particularly in the digital age, to get up close and personal with consumers but nothing beats being the physical point of contact with the customer. Quite simply, it provides a matchless opportunity to build a relationship.

Recent events at UK supermarket retailer Iceland speak to the pivotal role this relationship has in changing consumer attitudes and habits relating to critical sustainability issues, in this instance the use of plastic packaging for fresh produce.

Retailers would contend they are in a unique position to understand and respond to the needs of their consumers. More accurately, success for a retailer rests on its customers believing that to be true. In a modern consumer market, these needs are rarely spontaneous but implanted by marketing.

Consumer closeness does not equal responsiveness

The retailer-consumer rapport is of particular significance when it comes to considering issues around environmental sustainability and around health. Ultimately, efforts to encourage healthier diets and build a more sustainable food system depend on consumers, quite literally, buying into it. Food retailers therefore have a key role to play in driving progress.

Looking through the sustainability lens is also extremely illuminating when trying to understand the retailer-customer relationship, as the Iceland experience shows.

Last October, Iceland began rolling out a recyclable band for bananas across its 900-plus stores, stating the move would eliminate ten million plastic bags from its supply chain annually. In February, Iceland launched a trial at one of its larger outlets, The Food Warehouse in north Liverpool, a trial that saw 35 produce lines sold loose and 27 other lines packed in plastic-free packaging, such as plant-based films, compostable nets and paper bags. Loose produce was offered at a lower price to encourage take-up.

Iceland abandoned the Liverpool trial after recording a 20% fall in sales and scrapped the roll-out for the banana band

However, at the end of May, Iceland abandoned the Liverpool trial after recording a 20% fall in sales and scrapped the roll-out for the banana band. An Iceland spokesperson told just-food that dispensing with plastic bags for bananas had led to an "unacceptable increase in wastage and a reduction in sales". The problems were realised at a relatively early stage of the roll-out which, in the end, never extended to the whole estate.

Undeterred, however, on Monday (22 July) Iceland announced a new trial of plastic-free banana packaging across 20 stores, beginning today.

In a rather vivid way, this latest move shows being close to the consumer and responsive are, by no means, the same thing. If anything, Iceland's customers have told the retailer they like bananas wrapped in plastic. Launching a further trial could be judged, perhaps harshly, as Iceland telling them it knows better.

A clash of worldview between retailer and customer

Back in January 2018, Iceland announced a goal to remove all plastic from its own-label products by 2023. Since making that commitment, it has reduced or removed plastic packaging across 81 lines and removed over 1,500 tonnes of plastic from its packaging overall. Nevertheless, in a July interview with The Press Association, CEO Richard Walker spoke of having "a mountain to climb" to reach the 2023 goal. Far from being at one with its customers, the retailer is hampered in this aim because its customers see the world differently.

Far from being at one with its customers, the retailer is hampered because its customers see the world differently

Iceland's experience underlines how business decisions aimed at making the food system more sustainable, or to foster healthier diets, are informed by a matrix of diverse and often competing factors. The high cost in terms of wastage speaks to the trade-off between environmental sustainability and shelf-life in relation to plastic packaging. In a wider context, the environmental problems related to plastics need to be weighed against the huge advantages plastics have brought in terms of food safety.

Market research consistently shows how set food shoppers are in what they buy. The challenge of moving consumers away from established repertoires and habitual choices can never be underestimated.

Addressing consumer attitudes towards convenience

In relation to produce, consumer attitudes towards convenience is the variable that needs to be addressed, and thankfully retailers are showing significant resolve in changing consumer behaviour. Walker's claim Iceland is standing alone on plastic produce packaging and "no other supermarkets are following our lead" is a little unfair. Marks and Spencer launched a similar trial on 90 produce lines in January, while Morrisons replaced plastic bags with paper bags for its loose produce in June.

Retailers are in the vanguard of the battle to change consumer behaviour

In March, meanwhile, Waitrose found itself in the spotlight of a different kind on the way it packages bananas. Waitrose introduced a home-compostable bag for its Duchy Organic bananas and then found itself in a social media storm, with consumers complaining the upmarket grocer was still bagging bananas at all, suggests moving the dial on bananas specifically should be well within the capabilities of food retailers, if they commit to the task.

Retailers are in the vanguard of the battle to change consumer behaviour but successful retailers have become so because of their ability to influence shopper behaviour. They do indeed have a vital role to play in changing consumer attitudes regarding key sustainability issues such as plastic use, but are uniquely equipped for the task.

This article originally appeared on just-food

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