1
Ethical consumerism is becoming critical to retailers.
What should retailers be aware of?
Group 3 members:
Shaun Manthree | Morgan Mlondobuzi | George Mushaike
Ntsiki Radebe | Lisa Tremeer
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Contents
Abstract ............................................................................................................................................... 3
1. Introduction .................................................................................................................................. 3
2. Business Problem ........................................................................................................................ 4
2.1 Background ........................................................................................................................... 4
2.2 Regulations ........................................................................................................................... 4
3. Objectives & Scope ...................................................................................................................... 5
3.1 Objectives ............................................................................................................................. 5
3.2 Scope ................................................................................................................................... 6
4. Research Conducted ................................................................................................................... 7
4.1. Research Audience: Consumers around South Africa .............................................................. 7
4.2 Research Methodology ......................................................................................................... 7
4.3 Research Plan ...................................................................................................................... 9
4.4 Stakeholders identified ........................................................................................................ 10
5. The Food Value Chain Analysis ................................................................................................. 11
Case Study for the Food Value Chain ............................................................................................ 14
5. Consumer Questionnaires .......................................................................................................... 16
5.1 Research Questions to consumers .......................................................................................... 16
5.2 Research Questions to consumers .............................................................................................. 17
5.3 Interviews with consumers in their homes ................................................................................... 19
6. Results of interviews with the formal retailers ............................................................................. 21
7. Results of interviews with the informal retailers .......................................................................... 24
9. Results from interviews with the Crop Farmers ............................................................................. 25
10.Results of the meeting with the department of Agriculture ............................................................ 26
12. Suggestions ................................................................................................................................ 29
13. References ............................................................................................................................. 36
14. Annexures ................................................................................................................................... 37
14.1 Recognised Regulatory bodies ........................................................................................ 37
14.2 Consumer Questionnaires - via survey monkey and face to face ........................................ 38
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Abstract
Ethical consumerism, coupled with corporate social responsibility, is fast becoming a global
expectation that requires a comprehensive corporate response. More customers are choosing to
purchase goods that are ethically sourced, ethically made and ethically distributed.
The release of the King Reports1 in South Africa has increased pressure on corporate businesses,
holding them accountable for the welfare of the communities within which they operate. The King IV
report necessitated integrated sustainability reporting and has resulted in a renewed focus on building
company reputation.
South Africa can benefit from international research to better understand public perceptions,
expectations and attitudes regarding corporate responsibility. These are emerging consumer
expectations and concerns that will impact on business practices, future business and branding
strategies, and ultimately the sustainability of any organisation. This sustainability hinges on products
and services that provide social and economic benefits, while protecting public health and
environment over their whole life cycle, from the extraction of raw materials through to the final
disposal of the product.
1. Introduction
The buzz phrase, “ethical consumerism” is more aptly defined by its level of activism. Thornton (2012)
viewed it as meaning that "… more customers are choosing to purchase goods that are ethically
sourced, ethically made and ethically distributed".
Depending on your choice of reference material and the stance you wish to take, the term can take on
any multitude of definitions. One of these, according to the Institute of Grocery Distributions (IGD) is:
“The practice of purchasing products and services produced in a way that minimizes social
and/or environmental damage, while avoiding products and services deemed to have a
negative impact on society or the environment.”
Over time, the term, “ethical consumerism” has evolved to become more of a convenient phrase that
acts as somewhat of a vessel for all odds and ends in tendencies and whatever is trending within
contemporary consumer markets. In popular culture, it covers a wide range of concerns from
environmental and animal welfare to labour standards and human rights to questions of health,
wellbeing, and community sustainability (Littler, 2011).
1
The King Report on Corporate Governance in SA – A ground-breaking booklet of guidelines for the governance structures and operations
of companies in South Africa.
[1st issue – 1994 (King 1), 2nd issue – 2002 (King II), 3rd issue – 2009 (King III), 4
th issue – 2016 (King IV)]
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However, after unpacking the various definitions it became clear that the essence of ethical
consumerism involves the practice of purchasing products and services:
▪ that have been produced with the least amount of harm or distress to animals, humans or the
environment
▪ while avoiding those that are deemed to have or have had a negative impact on society at
large as well as the environment.
In her article “Ethical Consumerism and Conservatism: Hand in Glove” in the Heinz Journal,
Jacqueline Payne describes the ethical consumer as someone who buys things that are produced
ethically. Depending on the context, ethical production may mean producing something that is
recycled, produced in facilities without the use of slavery and child labour, or processing food that is
raised according to the principles of organic or free range farming.
It is therefore possible for one to be an ethical consumer and not even know it. However, the whole
point of the ethical consumerism movement is that one “knows” what one is purchasing and that one
buys things that are produced ethically because “not knowing” leads to abuse and exploitation.
For the purposes of this study, all four definitions will be used in conjunction.
2. Business Problem
2.1 Background
The study of ethics involves evaluating the morality of actions as well as their moral outcomes.
According to utilitarian thought, unethical means are justified if the consequence results in a greater
good for society. On the other hand, where actions are “right” in themselves, “what is ethical” is
defined by individual actions, not outcomes (Palmer, 1983). In a real context, consumers need to
understand what the retailer is doing and how they can make reasoned choices about merchandise
and food produced under more humane conditions.
What consumers need to understand is that food labelling is required for most prepared foods such as
breads, cereals, canned and frozen foods, snacks, desserts and drinks, while nutrition labelling for
raw produce (fruits and vegetables) and fish remains voluntary.
2.2 Regulations
There seem to be very few guidelines within the South African retail sector on how to build a
sustainable model. Nevertheless, the country relies on the Safe Quality Food (SQF) Certification with
SGS2, which proves that your organisation produces, processes, prepares and handles food products
to the highest possible standards. While this has a “dotted-line accountability” to the ethics of
production, the SQF is designed as a food safety programme that also covers product quality.
2 SGS is the leading inspection, verification, testing and certification company, recognized as the global benchmark for quality and integrity.
It boast more than 85,000 employees and operate a network of more than 1,800 offices and laboratories around the world.
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One of the more recognisable initiatives adopted by many leading eateries in the country is that of
the South African Sustainable Seafood Initiative (SASSI). It has been applauded for its “traffic light”
code system that assists customers in easily understanding the endangered status of the seafood
options offered on the menu. This is illustrated in the figure below.
Figure 1: SASSI’S traffic light code system
Other regulatory bodies that have been found to be making strides in this field are detailed in
Annexure 1.
3. Objectives & Scope
3.1 Objectives
Our team has been tasked with unpacking what South African retailers should consider since ethical
consumerism is becoming an influential factor in the consumers’ buying habits. Ethical consumerism
affects all areas of consumer purchasing - food, clothing, cosmetics, toiletries, and even some
services. The enormity of the task required the team to narrow it down to an area that would not only
be manageable, but also easily be related to.
Taking that into account, our research has settled on exploring the depth of awareness of South
African consumers / retailers relating to the entire value chain of the food they eat and how influential
price is in the decision to purchase a more “ethically-produced” product, and how, if at all, the different
population segments in the country are affected by it.
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4. Research Conducted
4.1. Research Audience: Consumers around South Africa
Consumers were given a link via email to an online survey – Seventy eight completed the survey via
Survey Monkey, and eighty four consumers completed the questionnaire in person.
We received a total of 162 completed surveys and the results we have listed are a combination of the
online surveys and those completed in person.
4.2 Research Methodology
Secondary Data
The secondary data gathered was mainly through literature review of related research in journal
articles. This was done in order to develop the conceptual framework of this study. Both local and
international research reports on ethical consumption were used. The team also used a combination
of quantitative and qualitative methods.
Consumer Questionnaire
Questionnaires were distributed to a group of consumers in the Western Cape, Gauteng and KwaZulu
Natal in order to get an understanding of what consumers knew about ethical consumerism and which
part of the value chain was important to them when purchasing food.3 The underlying intention was to
gather information from consumers in various parts of South Africa to assist us with our
recommendations to the retailers as well as to confirm what consistencies were apparent, if any.
An additional survey was conducted through an online version of the questionnaire using the tool
Survey Monkey. This tool was useful for reaching a wider audience in a short space of time as it is
user friendly, anonymous and easy to complete. It also allowed us to interpret the data quickly and
easily as the tables and summary of information was readily available to view online.
Focus Groups, Consumer interviews and home visits
We conducted interviews with six families in Durban, KwaZulu Natal. This was a focused group
discussion among a sample of the population to verify the significance and depth of the data
gathered. This allowed deeper observation of respondent sensitivities with regards to the subject
matter that has assisted in developing the qualitative analysis of the data. Four of these families had
an income of more than R30 000 per month, 1 family did not disclose their income and the last
family’s monthly income was between R5 000 and R9 999. In these interviews, the family member
being interviewed ranged in ages; four were between 35 and 55 years of age, one was over 55 years
of age and one was 25 -34 years of age.
3
Annexure 2: Customer Questionnaire
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Interviews with stakeholders
Six formal retailers: For a view on retail in the formal sector of retail in South Africa
• Cape Town: An SMME business in the southern suburbs
o Woolworths – Justin Smith (Head of Sustainability)
• Durban: Pick n Pay Bluff
• JHB: Pick ‘n Pay Lenasia
• Two in Tzaneen:
Seven informal retailers (spaza shops): For a view on retail in the informal sector of South Africa
• The areas we visited are townships in the North and West of Pretoria. Five spaza shops were
located in Soshanguve and Mabopane and two were located in Attridgeville.
• Crop farmers in Limpopo as well as with the Department of Agriculture in Cape Town – To
understand the challenges, requirements and legislation in the production and processing part
of the food value chain
Nastascha Harduth – Director at Werksman Attorneys – For insight into the food wastage in South
Africa and the legislation surrounding food donations by retailers.
International Immersion
• We travelled to Ghana, India and USA and combined our experiences in those countries as
well as the lessons we learned from our facilitators, local people, dignitaries and business
owners to include in this research.
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4.3 Research Plan
Research Area Research Method Target sources Delivery Date Custodians
Overall Awareness • Questionnaires
• Interviews
• Research
Papers
• Consumers
• Woolworths, Pick ‘n Pay and
small formal retailers
• Farmers
• Informal shop owners
• ILDP 2016 Class
• Lawyers
End of November 2016 All Ethicon team members
Quality of Source • Questionnaires
• Interviews
• Consumers
• Head of Sustainability for
Woolworths
• Farmers
End of November 2016 All Ethicon team members
Nutrition vs. Cost • Questionnaires
• Interviews
• Consumers
• Head of Sustainability for
Woolworths
• Farmers
• Informal shop owners
End of November 2016 All Ethicon team members
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4.4 Stakeholders identified
Stakeholder Group What we want from them How we engaged Key issues identified
Consumers Understanding the concerns of consumers
regarding the food which they consume
• Face-to-face questionnaire
• Customer surveys
• Customer interviews
• Home visits – ethnography
• Affordability of products
• Quality of products
• Price of food
• Health concerns
Retailers Understanding how issues of ethical sourcing
and ethical selling are addressed by the
business, as well as new developments &
customer trends
• Direct leadership
engagement
• Questionnaires/interviews
• Emails
• Sustainability of the business
• Business profitability
• Quality of products
• Consumer health
Farmers and
Distributors
Understanding how food is produced and how
it ends up on the table of the consumer. What
measures are in place to ensure the security
of food in the process?
• Direct leadership
engagement
• Supplier surveys
• Questionnaires
• Emails
• Quality of products
• Security & sustainability of
supply
• Fair pricing & payment terms
• Opportunities for cost
reductions
• Resource efficiency
Lawyers Understanding of the legislation pertaining to
food donations from retailers to the poor and
indigent people of South Africa.
• Emails
• Telephonic interviews
• Food wastage in South Africa
• Changes that need to made to
legislation.
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5. The Food Value Chain Analysis
The challenges that plague ethical consumerism span across the entire food value chain. In order to
get a clear understanding of the impact of ethical consumerism across the entire value chain, we met
with Justin Smith, the Head of Sustainability at Woolworths. He gave us some valuable insights into
the entire value chain.
Figure 2: Food vaue chain
Input
The essence of farming
Poorly managed intensive farming has many negative impacts on the natural environment, on
people’s well-being and on a farmer’s ability to adapt to change. It reduces species diversity and also
impacts the ecosystem. A dependence on and overuse of synthetic fertilizers, pesticides and
herbicides reduces long-term soil fertility, causes soil erosion, pollutes water supplies, poisons fragile
ecosystems, exposes farmers and farm workers to toxins, and contributes to climate change through
greenhouse gas emissions.
Farming practices must not only protect the long-term productivity of the land, but must also ensure
profitable yields and the well-being of farmers and farm workers.
According to Agricultural Statistics of 2008, South Africans had already shown interesting changes in
food consumption since the 1970s. Thanks to increased wealth and post-apartheid reforms, the
country’s middle class had increased by 30% between 2001 and 2004. This had allowed a shift from
staple grain crops to a more diverse diet. South Africans showed a decrease in the consumption of
the staples such as maize and bread, and had massively increased their annual consumption of
chicken from 6kg to 27kg per person. Per capita egg consumption had also doubled during this time.
Interestingly, the per capita consumption of fruit and vegetables remained constant, while beef,
mutton, pork and milk consumption declined.
The South African town of Tzaneen boasted 15 organic farmers in 2009 – a figure that dipped to
under five in 2016.
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Pesticides, herbicides and GMOs
It is estimated that less than 0,1% of sprayed pesticide (that at are known to kill amphipods and other
species that are important in the food chain) reaches the target pest while the rest ends up in the
environment (Pimentel & Levitan, 1986). The control of fertilizers, animal feeds and pesticides is
governed by the Fertilizers and Feeds Bill4.
Intensive farming practices are dependent on water, fuel, feed, synthetic fertilizers, pesticides,
herbicides and, increasingly, on genetically modified (GM) seeds.
Production
Ethical challenges in production
Child labour has always been an ethical challenge in the production / manufacturing stage. In South
Africa it is prevalent in subsistence family farms and needs to be addressed through, strong
incentives for education, and enforcement of child rights. In these circumstances, however, the
question does arise whether the right to food takes precedence over other rights, such as the right to
childhood education.
Furthermore, questions exist in debating the ethics of labour intensification in agriculture, as well as in
the investment in improved agricultural biotechnology.
Production systems that lead to sustainable development are highly desirable for reasons of both
human rights and long-term economic equity; as demonstrated, sustainable land and natural resource
management can ensure food security, as well as access to a biodiverse environment, and can
contribute to broader opportunities for economic development.
Processing
According to the Food and Agriculture Organisatons of the United Nations, the current trends that
affect the production and processing of food on a global scale are:
1. Human population growth and demographic shifts
2. Pressure on natural resources
3. Industrialisation of agriculture
4. Concentration of economic power
5. Globalization
6. Human-induced change
7. New biotechnologies: using microorganisms such as bacteria or yeast or biological
substances and processes, such as genetic engineering and synthetic hormones
8. Informatics
4
As introduced in the National Assembly (proposed section 75)
(Explanatory summary of Bill published in Government Gazette No. 35902 of 23 November 2012)
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Part of the processing stage involves the correct labelling of products. To ensure consumer safety,
the Foodstuffs Act R146 makes provisions for labelling of purchase and consumption of food. There
are three types of dates that can be found on food products: “Date of minimum durability”, also
referred to as the "Best Before" or "Best Before End" date, "Sell By” or “Display Until” date and “Use
By” (Best Consumed Before, Recommended Last Consumption Date, Expiry Date). The first two are
simply quality issues, whereas the latter, the expiry date, is a potential health issue.5
Distribution
The involvement of retailers
Organisations such as Woolworths have had to get involved in the entire supply chain of their food
products to ensure that what ends up on their shelves can be fully guaranteed where quality and
safety are concerned. It is a challenge for some retailers to get involved in the whole process of food
production, especially in the informal sector, due to their size, capacity and resources available.
Ethical challenges in distribution
According to the food distribution report issued by the Foods Ethics Council in the UK, some concerns
that plague long supply chains include:
� Excessive contribution to climate change, especially when food travels by air.
� Dependence on dwindling oil reserves.
� The widened the gap in understanding between consumers and producers.
� The compromised welfare of animals through transportation over long distances.
Marketing
Ethical challenges in marketing
According to My Top Business Ideas the following are the top ten unethical marketing practices6
▪ False, exaggerated, or unverified claims
▪ Distortion of facts to mislead or confuse potential buyers
▪ Concealing dark sides or side effects of products
▪ Bad-mouthing rival products
▪ Using women as sex symbols for advertising
▪ Using fear tactics
▪ Plagiarism of marketing messages
▪ Exploitation
▪ Demeaning references to races, age, sex, or religion
▪ Spamming
5
Foodstuffs, Cosmetics and Disinfectants Act: Regulations: Labeling and advertising of foodstuffs, nr.R146
6 See Annexure 14.4
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Case Study for the Food Value Chain8
According to Justin Smith, Head of Sustainability at Woolworths, with regards to ethical consumerism,
Woolworths sets itself apart from other retailers by developing and maintaining an exclusive and a
long-standing relationship with their suppliers, as well as providing support and guidance on the farms
or in the food processing stage.
Everyone is under pressure to make food more affordable. Woolworths put pressure on the suppliers
to cut costs and streamline the supply chain in order to make the product affordable for the consumer.
The relationship with the supplier is key; this is the heart of the business. They work with the suppliers
to help them meet the environmental and social requirements expected by the company. What makes
them different is that the supplier becomes a partner and they are supported by the large corporation.
In recent years, there has been an international trend to reduce the sweet products in the check-out
aisles; there is also growing evidence of the negative impact of sugary foods on the consumer’s
health. The discussion in South Africa around sugar tax has brought this issue to the fore. Woolworths
has started to phase out these products in their check-out aisle, but it has not been an easy decision
as these impulse buys bring in huge revenue for the company. Another consideration is what these
products can be replaced with to minimise this financial impact.
They have been very deliberate about working across the entire value chain. From a pure
sustainability perspective, their biggest impact environmentally and potentially socially is in their value
chain.
INPUT:
In the agriculture space, there is very good legislation around water, and different biodiversity issues,
but not enough capacity to monitor or enforce these.
Supporting and working with the farmers is imperative. Woolworths initiated “Farming for the future”, a
programme that helps with measurement and monitoring of soil health and input as well. They help
the farmers with soil analysis and have a technical consultative audit process in place. This has been
beneficial to both parties.
PRODUCTION:
Woolworths have regular conversations and visits with the farmers. They have farmer trading days
and lots of information sharing results from the days. They have regular unannounced visits and
audits with their suppliers. They ensure regular testing takes place and enlist a third-party company to
carry out these audits. They regularly do random tests.
PROCESSING:
In South Africa, claims on food such as organic, gluten-free, sugar-free, free-range, and so on, are not
strictly regulated; that is why it is important for the retailers to use a third party for certification as it
adds credibility to their organisation. There is not enough regulation around the issues unless they
become public health issues. The sugar tax is case in point.
Packaging is imperative to ensure that the products reach the consumers in the best condition.
Products can sometimes be over packaged in order to retain freshness, and aesthetics always needs
to be considered so that the product catches the eye of the consumer. 8
As told by Justin Smith , Head of Sustainability at Woolworths
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DISTRIBUTION:
Preservatives are needed to extend the shelf life of products; however, Woolworths strive to have
fewer preservatives in their food. “We really pride ourselves on our cold chain. If we get that right the
whole way through, it can really offset any potential loss around the preservatives in food.”
A partnership with Imperial Holdings who have expertise in transport with a service level agreement,
ensures that the cold chain management is maintained. There is a sustainability scorecard in place for
the supply chain business unit.
MARKETING:
They have already built green stores, such as Palmyra Junction in Cape Town. The next step is get
external validation or certification for these initiatives in the form of a 5 or 6 star rating from the Green
Building Council.
Brand positioning is very important. Their most effective marketing tool is in-store signage and
information on the product. This is where they best engage with the consumer as they are reading the
label to check ingredients, sell by dates, etc.
The Marketing Council in South Africa monitors the marketing claims made by retailers.
RETAIL:
Woolworths is constantly striving to improve their stores and offering, and has introduced novel ways
to keep food fresh. For example, you may have spotted a sample tub of yoghurt in diary fridges to
check the temperature and thus maintain the cold chain.
In the future, they also intend to address issues such as moving towards using renewable energy in
the stores – even to become a 100% renewable energy business. There are also ongoing discussions
around stocking only free range meat in certain categories in the stories to improve animal welfare.
CONSUMERS:
Since around 2002, they only sell free range eggs in their stores. Animal welfare is a big issue to their
customer base and internationally there has been a big shift as well. They have had moral
conversations around what they will and won’t sell. There was customer pressure around six years
ago, when a customer complained that Woolworths were disingenuous or lying because they were
still using non-free-range eggs in some of their products, even though they would only sell free-range
eggs in their stores. As a result of this perception and customer push back, around 99% of their
products only contain free-range eggs as well.
Part of the customer conversation is listening to what they want and expect.
Of the chicken, they sell, 60% is free range; there is scale that has been built that is bringing down
some of the cost issues.
“We cannot do what we do at too much of a premium, otherwise we will lose support.”
Woolworths engages with customers on various channels, including via social media and call centres,
and conduct customer research on marketing programmes. They also take industry feedback into
account.
The Good Business Journey is a key part of their values. They set specific targets and hold people
accountable. It has been difficult to get people to understand that this is not an additional cost to the
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business, but it has a lot of benefit. Another challenge they face is perception versus reality. For
example, the biggest feedback they get from the consumers is about the packaging and perceived
over packaging of the products. However, one must consider that the biggest environmental issue we
face globally is food waste; so if the role of the packaging is to protect the product through the value
chain and extend the life of it, the massive amount of water, energy and resources saved by the
product not spoiling outweigh the negatives of the sturdy packaging.
Woolworths has conducted life cycle assessments on various products, with milk being one example.
The results showed that it is worse to waste one teaspoon of milk than to just throw away the
packaging because of the amount of input into the actual product itself.
The Woolworths customers do care about the value chain, especially where it makes the products
better or different, like the cold chain. They want to know that they are supporting local farmers and
sourcing local foods. They care about supporting South Africa – 90% of their food is locally sourced.
5. Consumer Questionnaires
5.1 Research Questions to consumers
We developed the consumer questionnaire to establish information on the following:
Overall awareness
• Are consumers aware of what ethical consumerism is?
• How much awareness is there around the current buzz words such as “green” and “organic”?
• What are the overriding concerns that the consumers have when making food purchases?
Quality of Source
• Does the knowledge of the food source have any influence on purchasing decisions?
• Are there any concerns where the production of food is concerned?
• Which part of the value chain is most important for the consumer?
Nutrition vs. Cost
• How big a role does the nutritional content of food play?
• How much value does the nutrition of food have over its cost?
The results assisted us to understand which parts of the value chain were most important to the
consumers.
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5.2 Research Questions to consumers
74% of our sample population is between the ages of 25 to 55, with the average salary range of
R10,000 - R29,000 contributing 51% and greater than R30,000 contributing 47% in earnings and 13%
of the sample.
MONTHLY SALARY
Less than R5000 8 7%
R5000-R9999 5 5%
R10000 - R29000 51 46%
More than R30000 47 42%
Total 111 100%
AGE
Less than 25 3 3%
25-34 29 26%
35-55 65 58%
More than 55 15 13%
Total 112 100%
This segmentation is important to retailers as these individuals have the buying power. They also
have family responsibilities and are providers within their homes.
It is important to communicate to this segment regarding ethical consumerism for the following
reasons:
69% of these shoppers indicated that they understand what ethical consumerism means and a further
73% care about the nutritional value in the food that they consume. These consumers have a high
affinity about how their food is produced (83%) and are interested about where their food comes from
(64%).
Sustainability and production methods are high on their agenda and this is substantiated by their
understanding of the following terms,
• Organic - 98%
• Free range - 93%
• Green - 73%
• GMO - 61%
• Carbon footprint - 79%
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From the above we can deduce that communication around product lines that take these terms into
account can influence consumer spend and potentially improve basket size. There is an opportunity to
further educate consumers on Genetically Modified Organisms (products) by highlighting organic and
free-range items, thus building the consumer’s affinity with the retailer’s brand.
In terms of the questions we asked about considerations which were MOST important when making
purchasing decisions, consumers rated the following:
Rank Consideration No. rated most important (from 160
consumers)
1 Ingredients 110
2 Visual appeal 94
3 Nutritional Value 90
4 Price 72
5 How it is produced 67
6 Where it is produced 61
7 Brand 44
It is evident that ingredients, visual appeal and nutritional value (content) are highest on the agenda
affecting purchasing decisions. This, coupled with sustainability and ethical consumerism, could be a
powerful mechanism to nudge consumers in their relationship with retailers. With price ranked fourth
on the list there is an opportunity to improve margins on ethically produced product, irrespective of the
brand. This could be a potential gain for the retailer in the bottom line.
To support this recommendation; consumers also rated these factors of production as illustrated in
order of importance.
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Rank Consideration No. rated most important (from
160 consumers)
1 Chemicals and pesticides
used
127
2 Added preservatives 126
3 Hormones in meat and dairy 124
4 Antibiotics in meat and dairy
products
115
5 Products are free range or
organic
109
6 Genetically engineered crops 100
5.3 Interviews with consumers in their homes
The results from the family interviews confirmed the results from the consumer questionnaire, but
allowed us to get more detailed information about the way consumers eat.
Below are the questions as well as the summarised feedback from these interviews.
1. Who does the buying of groceries for your family?
Three of the six families have the husband/father involved in the grocery shopping. This is
important as the retailers need to consider both sexes when marketing their brand. Only one of
the families did the grocery shopping as a family outing.
2. What are the staple foods that you must have in your home at all times?
The most common staple grocery items were rice, bread and milk, followed by fresh vegetables
and fruit.
3. Was nutrition important to your family when you were a child and how does that affect
your purchasing decisions for your family today?
Five of the families indicated that nutrition was important when they were growing up and it is
even more important now especially with children.
4. Do you read the labels on product when you shop?
All the families read the labels on the products they purchased.
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5. What type of information are you looking for on the labels?
The most important things that the consumers look for are: the ingredients; sugar, salt and fat
content, organic and GMO free.; whether there are artificial sweeteners and preservatives added
as well as the nutritional content. Price, expiry dates and whether or not the products were
vegetarian were not a requirement for most of the families.
6. Are there any specific symbols that you look for like ‘Halaal’, ‘product of South Africa’,
‘organic’, ‘GMO free’ etc.?
Halaal, organic and GMO free were the most common symbols that the consumers looked for
when choosing a product to purchase.
7. How do these symbols make you feel e.g. trust?
Five out of six consumers trusted the symbols as a guarantee of what they were buying.
8. How does price affect your purchasing? Does it differ across certain products? Are
there certain products you are willing to pay considerably more for? What are these
products?
Five of the families said that price was not as important as the quality and they were prepared to
pay a bit more for quality.
9. What can retailers do to increase your awareness of nutrition and sustainability?
Better advertising and more information, education about what is good and what is not healthy, a
way to clearly see the difference between organic and non-organic.
10. Do you think they do enough currently?
All six consumers felt that the retailers needed to do more in order to increase the awareness of
the ingredients. For example, certain preservatives are not listed completely, just the number, this
is confusing for the consumer.
11. What is your opinion about food wastage in your household and what do you think
some of the causes are?
Three of the consumers indicated that the only wastage is due to the expiry dates on the products.
The expiry date is usually very short but they discard the product when the expiry date is reached.
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6. Results of interviews with the formal retailers
The retailers that were interviewed gave us some valuable information regarding the retail sector and
the focus on elements of ethical consumerism.
We were particularly interested in understanding what they (their company) were doing to ensure they
complied with the United Nations guidelines (ii, general principles,) for consumer protection (2003).
There are seven guidelines in total.9
This is a summary of the interviews with the five different retailers:
1. Are the companies meeting the requirements of the UN?
The answers were unanimous that yes, they all felt their companies were meeting the
requirements. Health and safety were the top of the agenda for companies and all felt strongly
that the health and safety guidelines are met. At Pick n Pay stores, Jonathan and Wendy
Ackerman are in charge of the constant research and compliance. The smaller retailers did their
best to comply, but due to lack of resources and infrastructure were not able to have to have the
same focus or perform the same audits as the larger companies.
2. How can retailers make it more affordable for consumers to consume ethically?
The answer is to support local industries, farmers, markets, local producers and manufacturers.
To provide good quality fresh produce that is value for money, as consumers will not mind paying
a little extra for a quality product..
3. How can retailers make improvements in product safety (eg, preservatives and
additives like artificial colour) and corporate accountability?
They can ensure the products are sold in good condition and that ‘best before dates’ are adhered
to. There must be complete transparency regarding the labelling of the ingredients so that
consumers can make informed purchasing decisions. Labelling must be consistent, for example it
a requirement for all packaged foods to contain ingredient labels, but fresh food that is not
packaged does not need to contain the list of ingredients. This causes confusion for consumers as
they do not know what has been added to the food they are purchasing.
4. What responsibility do retailers have for the welfare of the animals (i.e. product testing,
animal cruelty, “cage-free”); the environment (resource use, carbon footprint, waste)
and human rights/working conditions and fair-trade?
Retailers have a great role to play with regards to buying products from slaughter houses that are
cruel to animals. Retailers must visit the site where they buy fresh meat, egg or milk products to
see how animals are being taken care of. The consensus between the retailers was that if the
9
United Nations Guidelines for Consumer Protection (as expanded in 1999) Section ii, general principles.
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perception from the consumers was that animals were abused or not looked after, they would not
buy the meat or meat products.
PNP audits the entire supply chain. They also have government audits example from the fisheries,
auditors from the agriculture division looking at the grades of the vegetables, e.g. potatoes,
including the size etc. The audits occur without warning, so PNP’s suppliers have to maintain the
highest standards at all times. The Health Department also does audits looking at the back area of
the store ensuring that everything is in order and clean. A couple of years ago, Checkers was
caught out by not grading chicken correctly. This made it into the newspapers, and these incidents
cause sales to decline. PNP wants to be ethical and let consumers know what they sell.
One of the smaller retailers indicated that they only use brown paper bags to pack the customer’s
groceries in as it is better for the environment.
5. Do customers care about ethical consumerism? Does it affect their buying patterns or
their spending in your store?
Some of the customers do care about ethical consumerism, however with the current economic
situation most consumers are looking for value for money. Consumers are searching for
affordable products that stay fresh. Saying that, consumers are still prepared to pay for better
quality products, but this is dependent on the LSM and the area of the store. For example, if a
retailer is in an area where the average LSM is low, people will continue to purchase poorer
quality products and so called ‘junk food’ as this is what is affordable, whereas in the higher LSM
areas, consumers want better quality and healthier foods.
6. Should retailers engage with consumers about ethical consumerism?
Yes, retailers should because if the consumer knows about ethical consumerism they will be more
aware where products are coming from.
A lot of retailers need to engage consumers about ethical consumerism. PNP have panels set up
independently with customers to find out what customers think about PNP’s products and also
what customers are looking for. PNP uses Smart Shopper as one of the mediums to collect and
analyse data. They look at a customer’s profile on Smart Shopper, and this can tell them whether
the customers will be interested in Green products, No Name products, specific brand names etc.
They don’t just put products onto their shelves; they investigate what they need. There is an
opportunity to improve communication to consumers via loyalty programmes.
7. Should retailers be transparent with consumers about ethical consumerism?
It is imperative for retailers to be transparent. Without transparency, you lose the trust of the
consumer. The retail industry is very competitive, unless you give your customers the right quality,
service and conduct business in an ethical manner, you will lose the trust of the customer. Once
you lose their trust they will not return to do business with you.
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More consumers are becoming aware of where their food comes from and the preservatives and
additives they contain. If the consumers are aware, the expectation is then for the retailers to be
transparent and not hide information from them.
Customers assist the retailer to learn more about their business. They are reading the labels
critically and they query what the products can be used for. Often the retailers need to contact the
supplier to find out about the product’s usage; this ultimately allows the retailers to improve their
product knowledge.
8. Is Fairtrade an important factor when selecting products for your store?
Yes, it is important in order to secure better trading conditions and promote sustainability.
Fairtrade is a movement that secures the payment of higher prices to small-scale producers, as
well as improved social and environmental standards.
Pick n Pay supports local farmers and small business. They have the Small Business Incubator,
which helps to increase local procurement by accelerating small suppliers into the supply chain;
improve and develop great quality and range of local products at competitive prices and provide
small producers a national platform by increasing access to national and regional markets.
9. Do Government-mandated actions and sanctions need to be in place to encourage
Ethical Consumerism?
The retailers feel that more can be done by the government with regards to the local
manufacturing sector and reducing the amount goods that are imported. They want to empower
South African people to grow their own produce.
It seems that government supports imports when they really should be encouraging farming and
manufacturing locally.
It was also mentioned that we need to ensure that we continue to support small businesses in
South Africa as well as supporting our African neighbours.
10. Is it necessary to have the following in place to encourage ethical consumerism:
Labelling, and certifications (“Fair Trade,” “Organic,” “Natural,” “Vegan”)
Labelling requirements are in place but some retailers indicated that they felt labelling was
inconsistent across the board. Many consumers are reading the labels before buying a product. It
is also important to have labels and certifications for the consumer as some of the consumers are
having health issues, food allergies and intolerances. Vegan and gluten-free labelling on products
exists, for example, but there is no guarantee for the customer that these products are vegan or
gluten-free as it is difficult to control and monitor every product.
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11. Do we need to form consumer groups monitor ethical consumerism (“vigilante
consumers”)?
There is a consumer body in existence, called TOPIC. It is a consumer-led organisation that tests
the authenticity of product labels. They invite consumers to nominate a product and its label claim
to be investigated.
There is also the Consumer Goods Council that investigates claims made by consumers about
products they have purchased of consumed.
12. Are there cultural and social influences (norms)
Yes, demographics are very important and you will find in popular centres like Pavilion and The
Bluff, customers are enquiring about nutritional value and healthier living. Especially in the black
community word of mouth has a major influence on consumer behaviour in terms of what they
believe is good or not.
Earnings are a 50/50 conversation e.g. minimum earners will try to get the best for what they can
afford. High earners are the ones you should watch out for as they are buying for convenience,
purchasing the top of the range products and they are looking for quality. It’s also a status
element; they need to provide the best for their kids in terms of quality, nutrition etc. Single
younger people earning good salaries are buying more frequently and want to have healthy meals
that can be put into a microwave. So we are seeing a change in consumer behaviour being
influenced by social circumstances.
We have definitely seen a trend with the younger consumer for better quality products that are
more readily available. These consumers know what they want including the brand, the price and
the ingredients in the products. We have also seen an increase in the demand for sugar free food
and food with minimal carbohydrates; this is often referred to as Banting friendly food.
7. Results of interviews with the informal retailers
The spaza shops were all based in Pretoria, in Shoshanguve, Mabopane and Attridgeville. Only two
of the seven spaza shops that we interviewed were registered as formal business entities.
Our first observation for these interviews was that the shops were all foreign owned, mostly by
Pakistani nationals; none were South African owned.
Another observation was that food was placed on the floors in all these spaza shops, despite the
unhygienic conditions. We asked the shop owners about the legislation for food hygiene and food
safety and whether or not they felt they complied with the relevant legislation. The answers were
unanimous; they all mentioned that they were not aware of any laws around food handling, packaging
or labelling.
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With regards to the purchasing of their products for resale, they buy their products from wholesalers
and their fresh produce is bought from the Pretoria market in Marabastad.
None of the informal retailers are involved in the production process as they buy their products
already packaged to sell. They also buy bulk quantities and repackage in their spaza shops. This is
done mainly with products such as sugar, salt and tea bags. Most of their customers buy in small
quantities; hence the need to repackage it themselves in the quantities that are required. They do not
adhere to the regulations with regards to packaging, labeling or expiry dates.
When asked about whether they think their customers are concerned about how they handle the food
that they sell, they replied that customers do not really get to feel or touch the merchandise as they do
not come into the spaza shop, but rather purchase through small windows due to security concerns.
They all indicated that they do their best to ensure that their food is not contaminated and is safe for
consumption.
In general, ethical consumerism is not top of mind for these informal retailers as their customer base
relies on the spaza shops selling affordable food on demand. The consumers want affordable food
that is readily available. No demands have been made for ethically sourced or produced products. It is
therefore not something that is followed and there are no plans to start doing so either.
9. Results from interviews with the Crop Farmers
There are many challenges that the crop farmers face:
The first challenge is transportation: 73% of producers in Limpopo use their own transport to move
supplies for distribution. This is costly and difficult to factor into the cost of produce and the suppliers
of the organic supplements required for production is often too far from farm. The route to market
seems to be dominated by Woolworths and as a result, the majority of the produce (60% - 70%) can
only be sold to the retail giant. This leaves very little latitude for the negotiation of prices. The sale
price to Woolworths is almost at production cost to the farmers which means very small profit margins
for the farmers.
The second challenge is packaging, the farmers are not satisfied with Westfalia Packers (as produce
not adequately protected). Woolworths’ packaging raises the value of the produce, but the benefit
does not filter back to the farmers. The current infrastructure does not allow for in-house packaging of
produce and they have to rely on third parties.
The third challenge is basic information sharing. There is insufficient knowledge being passed on to
the consumer about what the production process entails.
The last challenge is the costs of production. Organic farming takes longer to yield the same results
as commercial farming. As a result, selling prices have to be higher in order to off-set the delayed
returns.
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10. Results of the meeting with the department of Agriculture
We met with Dr. Graham Leask, Veterinary public for the Western Cape. His area of responsibility is
Regulators of the Meat Safety Act (which controls all abattoirs and meat production facilities) in
ensuring that the meat offered to the consumer is safe for consumption. He discussed some of the
key challenges faced by the meat industry in South Africa.
The challenges that he identified were at various stages in the food chain. Regulation ends with the
slaughtered meat carcasses, it does not go beyond the abattoir. There are monitoring measures in
place but they not been changed or modified extensively since they were first put in place. The
abattoirs are limited as to how much can be slaughtered per day. This is dependent on size, capacity,
facility, staff component, and what they can manage overall.
There are 64 abattoirs in the Western Cape, with 8 government inspectors to oversee them. These
are currently split between red meat, white meat, and specialist abattoirs, due the differences in the
types of equipment used and processes followed.
The management of abattoirs is no longer state controlled, but largely privately owned and managed.
Most abattoir owners are also livestock raisers as it’s more cost effective. The prime reason for the
ownership of abattoirs is to service its own livestock.
In the past, farmers would pay a fee to the abattoir owners for the animals to be cut up, and would
then be responsible for the selling of the meat, hide, and disposal of the rest of the animal. Now the
abattoir owners buy the livestock from farmers to process, and are responsible for what happens to
the carcasses afterwards. There is no regulation of the cost of livestock or the processed carcass. It is
a free market. Farmers can decide how to price their livestock. Abattoir owners pay fees to regulatory
bodies. In addition, they are responsible for their own independent inspector on site to ensure the
adherence to rules and regulations (who cannot be part of the salaried personnel). Livestock farmers
who practice “free-ranging” take a lot longer to get their cattle to the same weight as commercial
farmers, as what they eat is not controlled. It eats what it gets. As a result, these farmers are forced to
increase the cost of these animals to ensure their long-sustained costs. The cost of livestock is also
increased in the event of a drought or some natural disaster that affects the quality and quantity of
livestock produced, therefore insurance premiums are very expensive, and it costs too much to insure
a farm enterprise adequately.
12. Results from interview with Nastascha Harduth
Nastascha Harduth, Director at Werksman Attorneys, said that “South Africa wastes a lot of food.
Research suggests that between 9 and 10 million tonnes of food waste is generated annually. This is
equal to about 30% of the local agricultural production in South Africa. Waste occurs at all levels of
the food system – in fields, commercial kitchens, manufacturing plants, warehouses, markets,
Page | 27
schools, and restaurants. The bulk of this waste is, however, generated in the pre-consumer stages of
the supply chain.”11
She continued: “The South African Government recognises that certain organisations are dependent
upon the generosity of the public and to encourage that generosity, a tax deduction is allowed for
certain donations made by taxpayers. A taxpayer making a bona fide donation in cash or of property
in kind to a section 18A-approved PBO, is entitled to a tax deduction limited to the value of 10% of the
donor taxpayer's taxable income”.
“In addition, donations by or to a PBO are exempt from donations tax in terms of section 56(1)(h) of
the ITA 16. Notwithstanding the tax incentive and the obvious civic responsibility to donate surplus
food and despite the tax incentive that accompanies it, food recovery efforts are often stymied by
potential food donors’ fear of being sued.”
There is other legislation in place to protect the consumers and encourage ethical consumerism like
the Consumer Protection Act, The National Credit Act and The Foodstuffs, Cosmetics and
Disinfectants Act.
13. Results from our international immersion
Ghana:
More food is sold via informal traders than in shops, this informal sector dominates retail business as
they contribute about 75% to 90% of the retail market. People eat a lot of fresh fruit, vegetables, eggs
and meat/fish products that were readily available from the markets and on the side of the road.
Consumers did not seem to be concerned about the quality of food they consumed. After the visit to
Makola market in Accra, we noticed the way the food was being sold on the streets and the way it
was displayed – there was no packaging, ingredient labels or sell buy dates on any of the food
products in the markets, most products are not even covered, yet this did not seem to worry the local
people.
We also learned from His Excellency Kwesi Ahoi that Ghanaians in general have a different approach
to food - if a portion of a fruit is rotting or if bread becomes mouldy, a Ghanaian will cut off that piece
and consume the rest. This is the reason that packaging and labelling is less important to the
consumer and the vendors in that country. South Africa in his opinion has a very high standard of
packaging and labelling but this also adds to the cost of the product.
India:
The small informal retail businesses (Kirana stores) dominate the market.
11
Harduth, Nastascha, 2016, Legislation Discussion Paper: Food Donations as a Mechanism to Limit Food
Waste, Food Insecurity and Malnutrition
Page | 28
People are very much aware of what they eat due to traditional reasons. They have a green and red
sticker system to allow consumers to easily identify food which is vegetarian or meat.
Our visit to Big Bazaar indicated that there is a demand for organic products in certain areas which
shows that consumers are becoming educated about ethical food standards and food production. This
is still an emerging trend and the retailer is providing for it by accommodating these products in its
own merchandising area with display bays.
Supermarket Wala's CEO Damorda Mall has a different approach to Ethical Consumerism. The
company invests in recycling methods like using its plastic shopping bags and milk sachets to
manufacture benches which are donated to schools etc. Whilst the CEO manages ethical
consumerism and sustainability at a company strategy level, he believes that the customer will make
a purchasing decision on an unethically produced product if the price is cheaper.
Homemade food is consumed by most families - three meals a day. They are even delivered
throughout Mumbai in Tiffin tins by the Dabbawalla.
Recycling is very prevalent throughout Mumbai – tetra packs, plastic bottles and containers. There is
a big industry in the Dharavi slum. Nothing is wasted and there seems to be very little excess (nothing
is wasted) in this community. Very few plastic carrier bags are used in the supermarkets for the
packing of customer’s groceries.
The United States of America:
This is the most evolved economy and the people who we spoke with seemed to know what they
want and have enough information or access to the information of what they consume. Being the
most evolved economy the US certainly has high standards when it comes to food. In New York,
restaurants are graded for standards of cleanliness, hygiene, etc. This indicates the level of policy and
procedures to safeguard consumers across the retail food industry is well controlled. We noticed that
food labelling is on all packaged food, but not the food sold on the street by vendors.
We met with the Consulate General of South Africa who also raised issues around the kind of food
products sold in the country – organic, free range, etc. The same was confirmed through various
conversations while at Pennsylvania State University. It is therefore clear that people have access to
information and are able to make informed choices about their food. In Professor Meg Meloy's
presentation she confirmed that very little research has been done on ethical consumerism since
2004, and she gave us some valuable insights into why companies should engage. We also learnt the
importance of the following concepts and the direction we should take with our ALP, like why
companies should engage with their consumers, the importance of transparency, raising awareness
of ethical consumerism, which mechanisms need to be in place to encourage ethical consumerism,
rewarding firms actively engaging in ethical consumerism and nudging better behaviours.
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12. Suggestions
Here are some suggestions for the various parts of the value chain:
12.1 Inputs:
• Regulation of abattoirs
• More government inspectors need to be appointed for regulation purposes (allocate more
people and finances in order to facilitate this)
• Implement cost-sharing between farmers
• Inter-change and transfer of knowledge and skills
• The capital outlay of the facilities could be subsidised to ease the burden of cost on
owners
• Some form of regulation of the cost of livestock or the processed carcass must be put in
place to make sure that the market benefits all who work in it
• The Competition Board to be given more power in implementing and enforcing pricing
between players
12.2 Production:
• Livestock farmers need to acknowledge that we live in an area that is drought-prone. They
must therefore farm accordingly. We need to develop water-wise farms with adequate
irrigation that is sourced from non-potable water.
• Dept. of Agriculture, Forestry and Fisheries (DAFF) to finalize the legislation on organic
production and provide clear guidelines on operating parameters
• Small Enterprise Development Agency (SEDA) to coordinate mentorship and other training
required for all stakeholders
• Government should provide the tax incentives to organic farmers to buffer the deferred
income
• Provide educational support on how to maximise production quality while minimising costs
and losses
12.3 Processing:
• National Agricultural Marketing Council (NAMC) to coordinate a feasibility study on in-
house packaging
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• Facilitation for the provision of infrastructure for every farm to have the option of in-house
packaging
12.4 Distribution:
• Across the industry, the cold chain management system needs to be improved and be
more efficient; this will prevent food from spoiling and also limit the need for preservatives
to be added.
12.5 Marketing:
• Brine actually improves the texture of the meat (it makes it more tender). Better marketing
to be done to educate consumers about the injecting of brine into the poultry as to reasons
why this is being done. The injection of brine was never meant to be a deceitful exercise.
Free-range chickens (or any poultry that is allowed some movement) actually develop
tough skin, muscles and sinews. If the brine will result in 30% shrinkage, the consumer
must be aware of it.
• Marketing bodies for farmers such as the Red Meat Abattoirs Association that will work
together with the general media to educate the public about what are real issues and what
are not.
• Have better and bolder in-store signage to communicate to the customer and educate
them on what is on the shelves. Shelf talkers and point of sale material can be used
effectively to do this.
12.6 Retail:
• Provide access to an in-store health advisor or nutritionist to guide customers about a
healthy eating plan. In food stores, this could help consumers make informed choices
about the food they purchase.
• Wholesalers must become more vigilant in being able to know what gets sold on to
customers from spaza shops.
12.7 Consumers:
• Offer consumers the dot sticker system like in India – any food purchased with a green dot
indicates that it is completely vegetarian and anything with a red dot sticker indicates the
product is meat. We could then offer additional colour stickers like blue for Halaal, pink for
gluten free, etc. This will assist the consumers to know what they are purchasing simply by
looking at the stickers on the packaging.
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• Educate the consumers. The education department could include ethical consumerism in
the school curriculum as part of the Life Orientation syllabus. Also retailers can educate
their consumers with marketing and in-store point of sale information.
13. Business Case and implementation
Business Problem:
'The cost of food wastage in South Africa in 2012 was around R61.5 billion per annum and in 2016
amounts to R79.5 billion. For every 5% of wasted food that is recovered an additional 195 000 people
can be fed every day for a year. This has massive impact on the poor and indigent people in South
Africa.” 12This also affects the retailers as this food is dumped, therefore wasted.
Section 61 of the Consumer Protection Act 68 of 2008 (CPA) provides for strict liability in that each of
the producer, importer, distributor or retailer of a particular product is strictly liable for any harm
caused where that product was unsafe, had a product failure, defect or hazard or was provided with
inadequate instructions or warnings in relation to any hazard arising from or associated with the use
of the product. Each of the producers, importers, distributors and retailer of the product is jointly and
severally liable. In terms of section 61 of the CPA, consumers no longer have to prove negligence on
the part of the supplier of a product that has caused harm.
The imposition of strict liability, and the potential magnitude of damage awards and settlements
associated with foodborne illness claims, prevent or limit the amount of food donated by producers
and retailers.
Currently, there is no legislation in place to prevent food wastage by encouraging individuals and
companies to donate food.
Therefore, our recommendation is for retailers to help lobby to get the clause of section 61 of the
Consumer Protection Act changed and remove the strict no fault liability for donors.
Benefits to the general population:
• It will reduce food waste in South Africa.
• It will put South Africa on par with other first world and developing countries with regards
to the international legislative tendencies.
• It will reduce the amount of food that is dumped on landfills thereby reducing the smell
and health risks associated with this.
12
Harduth, Nastascha, 2016, Legislation Discussion Paper: Food Donations as a Mechanism to Limit Food Waste, Food Insecurity and
Malnutrition
Page | 32
Benefits to poor and indigent people:
• Food that would normally be dumped, but is perfectly safe to eat, can now be given to the
poor and indigent people in South Africa.
• It will reduce the amount children suffering from malnutrition.
• It will reduce stunted growth in children.
Benefits to the Government:
• It will play a small role in achieving the goals set out in the National Development Plan
2030 by helping to eliminate poverty and reduce inequality by 2030. To achieve the
objectives of broader social security coverage, the NDP proposes a commitment "to
household food and nutrition security involving public and private-sector action".
Benefits to the environment:
• It will reduce the environmental impact of food wastage. “Every ton of food waste is
responsible for 4.5 tons of CO2 equivalent emitted to the atmosphere”13
Benefits to the economy:
• It will reduce the monetary cost of food wastage: “The cost of food wastage in South
Africa in 2012 was in the order of R61.5 billion per annum; equivalent to 2.1% of South
Africa’s gross domestic product at the time.”14
• “Taking the figure of R1 191 of food consumed within a month by a middle income earner
in 201015 (and applying an inflation increase of 42.5% over 6 years from 2010 to 2016),
for every five percent of wasted food that is recovered an additional 195 000 people can
be fed per annum.16
13
The Food We Waste,
http://collections.europarchive.org/tna/20100907111047/http:/wrap.org.uk/downloads/summary_v21.0218b6a2.5460.pdf
14 http://researchspace.csir.co.za/dspace/bitstream/10204/8367/1/Oelofse1_2014.pdf, (The Vision Zero Waste Handbook ) visited August
2016; and http://www.sciencedirect.com/science/article/pii/S0956053X13003401 (Elsevier: Waste Management 33 (2013) 2493–2500, Costs of food waste along the value chain: Evidence from South Africa)
15
http://www.sciencedirect.com/science/article/pii/S0956053X12001766 (Elsevier: Waste Management 32 (2012) 2147–2153, The costs of
household food waste in South Africa ), visited September 2016. In this paper the nutritional requirement of between 1500 and 2300 calories per person per day was taken as the norm to build the purchasing profile for high, middle and low income earners. Subject to the basic nutritional requirements referred to, based on average 2010 prices, the aggregated value of these consumption profiles was R1618 per month for high income earners, R1191 per month for middle income earners and R777 per month for low income earners.
16
R79.5 billion in food waste per annum times 5% of food recovered equals R3.975 billion, and if R3.975 billion is divided by R20,362.80
(being R1,696.90 times twelve) of food consumed per annum by a low income earner equals an additional 195,208 people fed
Page | 33
Benefits to the education of children in South Africa:
• It will improve the quality of education for children suffering from malnutrition, as these
children will have a delayed start to schooling and will struggle to focus whilst in the
classroom.
• It will reduce the number of children who are going to school hungry.
• It will enable food recovery – this food can be donated to the NGOs who in turn will use it
to feed millions of children of school going age.
Benefits for the retailer:
• The retailer will receive a 10% tax incentive for all food donations.
• The retailer will earn Corporate Social Investment points for the Broad Based Black Economic
Empowerment (BBBEE) scorecard.
• The retailer will save money – the money that would have been spent paying for the food to
be dumped will no longer be necessary. This will amount to a huge savings on an annual
basis
• There is no cost to the retailer – it will not cost anything for people to talk about this issue.
Also, Werksman’s Attorneys will absorb any legal costs that might be associated with this
process.
• This is an opportunity to make a positive impact, as well as change the lives of millions of
South Africans.
The next steps:
In an effort to make this a successful endeavour it would be prudent for all retailers and stakeholder
affiliated to the W&R SETA to support the recommendations to curb food wastage in South Africa by
lobbying for the partial amendment by limiting civil and criminal liability of good-faith food donors in
the event of the donated food causing harm to its recipient.
The key stakeholders in this process will be government (who need to approve the change in
legislation), importers, manufacturers, wholesalers, retailers (who are responsible for donating the
surplus foods and NGOs (who receive the surplus food.
A committee will need to be formed to include the relevant qualified stakeholders from each
organization. Werksmans attorneys have agreed for their seminar room to be used for all round table
discussions at no cost to the retailers.
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The most critical resource required from the committee will be the time necessary to follow the
drafting of the legislation and the time that it will take for this change in legislation to be passed by
government.
The benefits to all involved, retailers, affiliated association's and the people of South Africa will far
outlive the time invested in pursuing the eradication of food wastage.
13. Conclusion
Ethical consumerism is a journey for all people in South Africa. It requires awareness and education.
Retailers can partner with the W&RSETA and have an influence on how children are educated in
schools and at home, about consumption and sustainability. The more we know, the more we can
make the necessary changes to improve how we live and how can live in the future.
After researching the topic of ethical consumerism, it is evident that although it affects every
consumer in one way or another, it can be a costly exercise for retailers to change or develop
policies to promote ethical consumerism that will be relevant to all their consumers. As our research
has shown, not all consumers are necessarily concerned about ethical consumerism.
It is, however, imperative for retailers to lobby for the approval of a new piece of legislation that will
limit any liability of donors who donate wholesome food in good faith; and/or who donate food that
may be deficient in one form or another (e.g. it has reached its best before date) to a NGO that can
test that the donated food is still wholesome and if necessary reconstitute it (where possible) prior to
distribution to the needy.
The new legislation will be in line with Good Samaritan laws that are currently in effect in other
countries like the UK, Canada, USA, Panama and Italy.
We do not want to amend section 61 of the Consumer Protection Act, as it is an important clause
that is necessary to protect consumers. This section provides for so called “no fault” liability of the
importer, manufacturer, wholesaler, and retailer of unsafe, defective, failed or hazardous goods, or
where inadequate instructions or warnings have been provided.
The new legislation will eventually have to be revised by a portfolio committee, then be presented to
parliament as a Bill, and if enacted by parliament, it will have to be approved to by the President.
This could take months if not years to happen, but unless the retailers help to lobby, this process
might not happen at all.
Oxfam has calculated that 13 million South Africans go to bed hungry every night. That is just about
twice the size of the population of the Eastern Cape, and more than 25% of the total South African
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population.17 This scenario can be changed and the lives of millions of South Africans can be
improved, not to mention the positive impact it will have on the economy and the education of
children; once children are no longer hungry, they are able to learn, as they can concentrate and
focus on what they are being taught. You can’t teach a hungry child.
17
https://www.dailymaverick.co.za/opinionista/2015-09-03-food-waste-south-africas-shameful-secret/#.WHzj7dJ97cs
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13. References
Littler, Jo. (2011). Radical Consumption: Shopping for Change in Contemporary Culture. Berkshire,
UK: Open University Press.
Payne, Jacqueline. (2012).”Ethical Consumerism and Conservatism - Hand In Glove." Heinz Voices.
The Heinz Journal, 26 January, 2012.
Pimentel, D., & Levitan, L. (1986). Pesticides: amounts applied and amounts reaching pests.
Bioscience, 36(2), 86-91.
Sarker, S. A., & Lupa, Z. S. (2016). Ethical Consumerism as a prerequisite to the development of
Eco-tourism: Evaluating Consumption Pattern of the Bangladeshi Traveler, The Cost and
Management. Vol 44 #2 (March – April 2016).
Thornton, Linda Fisher. (2012). "What Does Ethical Consumerism Mean for Business?" Leading in
Context. Leading in Context, 10 October 2010.
http://www.mytopbusinessideas.com/
Justin Smith, Group Head of Sustainability at Woolworths Holdings
Denzil Colbert, owner of Pick ‘n Pay, Lenasia
Dr. Graham Leask, Veterinary public for the Western Cape
Nastascha Harduth, Director at Werksmans Attorneys
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14. Annexures
14.1 Recognised Regulatory bodies
Country Regulator Purpose
South Africa
Foodstuffs, Cosmetics and
Disinfectants Act
Control of the sale, manufacture
and importation of foodstuff,
cosmetics and disinfectants and
to provide for incidental matters.
Food Labelling Regulations To align the regulations in SA with
new scientific evidence, current
trends and international
guidelines, close loopholes, and
enable customers to make more
informed choices
Regulations Relating to
Foodstuffs for Infants and
Young Children
Prohibit promotional practices in
respect of infant and follow-up
formulae for special dietary or
medical purposes; marketed or
otherwise represented as suitable
for infants or young children
United Kingdom
Ethical Trade Initiative An alliance of companies, trade
unions and voluntary
organisations that work in
partnership to improve the
working lives of people across the
globe who make or grow
consumer goods
Ethical Consumer
Research Association
Promotes universal human rights,
environmental sustainability, as
well as animal welfare.
USA Federal Food, Drug and
Cosmetics Act
Authorises the setting of tolerance
levels or maximum residue limits
for pesticides residues in foods.
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14.2 Consumer Questionnaires - via survey monkey and face to face
Consumer questionnaire – for research assignment
1. Do you care about the nutritional value of the food that you eat?
� � � � yes no sometimes Not sure
2. How much knowledge do you have about where your food comes from?
� � � � a lot a little none Never thought
about it
3. Do you know what ethical consumerism means?
� � � Yes no Not sure
4. Do you understand what the following terms mean? (please tick the terms you
understand)
� � � � � Organic Free Range Green GMO Carbon Footprint
5. Do you care where your food comes from? (country of origin)
� � � Yes no Not really
6. Do you care how your food is produced?
� � �
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Yes no Not really
7. Please apply a rating to the following considerations. (place rating of 1 to 5 next to each –
1 being least important and 5 being very important).
Price
Ingredients
Brand
Visual appeal
How it is produced
Where it is produced
Nutritional values
8. Which of the following is important to you when buying food? (please tick)
What chemicals and pesticides are used in the production
What hormones are found in meat and dairy products
What preservatives are added
Products are free range or organic
The antibiotics found in your meat and dairy products
Genetically engineered crops
Gender:
Female Male
Age:
Less than 25 25 - 34 35-55 More than 55
Monthly Salary:
Less than R5000 R5000 – R9 999 R10 000 – R29 000 More than R30 000
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14.3 Stakeholder Interview Form - was used for interviews with the retailers
Stakeholder Interview Form
1. The UN guidelines for consumer protection (2003) list the following
• Protection of consumers from hazards to their health and safety.
• Promotion and protection of the economic interests of consumers.
• Access to adequate information to enable consumers to make informed decisions.
• Consumer education on the environmental, social and economic impacts of their choices.
• Availability of effective consumer redress.
• Freedom to form consumer groups to present their views in decision making processes affecting them.
• Promotion of sustainable consumption patterns.
1. Is your company meeting these guidelines? and why/how?
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2. There are three stages in Ethical Consumerism:
First stage: value for money, basic product information and labelling, and consumer education to make
informed choices.
Second stage: product safety (e.g., preservatives, additives like colour) and corporate accountability.
Third stage: a marriage of environmentalism and citizenship; typically focus on (a) animal welfare (i.e. product
testing, animal cruelty, “cage-free”); (b) the environment (i.e., resource use, carbon footprint, waste); and (c)
human rights/working conditions and fair-trade.
2.1 How can retailers make it more affordable for consumers in the first stage?
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2.2 How can retailers make improvements in the second stage?
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2.3 What responsibility do retailers have for the 3rd
stage? Why?
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3. Do you think your customers care about Ethical Consumerism? Do you think it affects their buying
patterns or their spending in your store?
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4. Do you think that retailers should engage with consumers about Ethical consumerism?
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5. Do you think that retailers need to be transparent with consumers? Why?
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6. Is Fairtrade an important factor when selecting products for your store?
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7. Do you think we need any of the following to be place to encourage Ethical Consumerism?
7.1 Government mandated actions and sanctions
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7.2 Labelling and certifications (“Fair Trade,” “Organic,” “Natural,” “Vegan”)
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7.3 Consumer groups designed to monitor (“vigilante consumers”)
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7.4 Cultural and social influences (norms)
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14.4. Top 10 unethical marketing practices
i) False, exaggerated, or unverified claims
Some marketers use false statements, exaggerated benefits, or make unverifiable claims about
their offers. This is common in the weight loss industry, where marketers convince potential
buyers that a particular product can help them shed so-and-so pounds within two weeks without
exercise or dieting.
ii) Distortion of facts to mislead or confuse potential buyers
A typical example is when a food processing company claims that its products are sugar-free or
calorie-free when indeed they contain sugar or calories. Such a company is only trying to mislead
potential buyers, since they are unlikely to buy the products if it is made known that they contain
sugar or calories.
iii) Concealing dark sides or side effects of products
This unethical marketing practice is rife in the natural remedies industry, where most
manufacturers deceive potential buyers that their products have no side effects because they are
“made from natural products”. But in reality, most of these products have been found to have side
effects, especially when used over a long period. In fact, there’s no product without side effects—
it’s just that the side effects might be unknown. It has found to be better to say, “There are no
known side effects” as opposed to “there are no side effects“.
iv) Bad-mouthing rival products
Emphasizing the dark sides of a rival’s products in a bid to turn potential customers towards your
own products is another common but unethical marketing practice. Rather than resort to this bad
strategy, a retailer should emphasize on those aspects that make its offer stand out from the rest
of the pack.
v) Using women as sex symbols for advertising
It is not uncommon for even reputable brands to resort to using a half-naked lady to attract
attention to the product. While it might be intuitive to use models in adverts for beauty products
and cosmetics, having half-naked models in adverts other products not strongly related to women
is both nonsensical and unethical.
vi) Using fear tactics
Claims such as “limited-time offer”, are rife in the marketing industry and only serve to prompt the
potential buyer to make a decision on the spot.
vii) Plagiarism of marketing messages
Some business owners and salespersons engage in using the exact marketing messages of their
competitors to market their own products or services. Creativity is a huge part of marketing, and
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using other businesses’ marketing messages just passes you off as being creatively bankrupt and
fraudulent.
viii) Exploitation
This is charging for much more than the actual value of a product or service. For marketing efforts
to remain with ethical limits; the prices of your offers must be equal to or less than the value they
give the buyer. If the value is less than the cost, it is unethical.
ix) Demeaning references to races, age, sex, or religion
Ethical marketing must be devoid of all forms of discrimination. If your marketing messages
contain lines that place people of certain age range, sex, religion, nationality, or race at a higher
level than others, then you are crossing the bounds of ethical marketing.
x) Spamming
Spamming is when unsolicited emails are sent to potential customers, encouraging them to make
purchases. This is the commonest unethical marketing practice done online. The number of time
you send such emails doesn’t matter. Whether you send them once, or on occasions, or
frequently, you remain a spammer.
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14.5 Graphs of Consumer Research
Yes No Sometimes Not sure Total
117 8 35 0 160
A lot A
little None
Never thought about it Total
49 89 12 10 160
73%
5%
22%
0%
Yes
No
Sometimes
Not sure
0% 10% 20% 30% 40% 50% 60% 70% 80%
DO YOU CARE ABOUT THE NUTRITIONAL
VALUE IN THE FOOD THAT YOU EAT?
31%
56%
8%
6%
0% 10% 20% 30% 40% 50% 60%
A lot
A little
None
Never thought about it
HOW MUCH KNOWLEDGE DO YOU HAVE
ABOUT WHERE YOUR FOOD COMES …
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Yes No Not sure Total
110 27 23 160
Organic Free range Green GMO
Carbon Footprint
156 148 117 97 127
69%
17%
14%
0% 10% 20% 30% 40% 50% 60% 70% 80%
1
DO YOU KNOW WHAT ETHICAL
CONSUMERISM MEANS?
98%
93%
73%
61%
79%
0% 20% 40% 60% 80% 100% 120%
Organic
Free range
Green
GMO
Carbon Footprint
DO YOU UNDERSTAND WHAT THE
FOLLOWING TERMS MEAN?
Page | 47
Yes No Not Really Total
102 17 41 160
Yes No Not really Total
132 4 24 160
64%
11%
26%
Yes
No
Not Really
0% 10% 20% 30% 40% 50% 60% 70%
DO YOU CARE WHERE YOUR FOOD COMES
FROM?
Series1
83%
3%
15%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90%
Yes
No
Not really
DO YOU CARE HOW YOUR FOOD IS
PRODUCED?
Page | 48
Rank Consideration
# of respondents
(most important)
1 Ingredients 110
2 Visual apeal 94
3 Nutritional Value 90
4 Price 72
5 How It is produced 67
6 Where it is produced 61
7 Brand 44
What chemicals & pesticides are used in its production 127
What preservatives are added 126
What hormones are found in meat and dairy products 124
The antibiotics in your meat and dairy products 115
Products are free range or organic 109
Genetic engineered crops 100
44
61
67
72
90
94
110
0 20 40 60 80 100 120
Brand
How It is produced
Nutritional Value
Ingredients
WHAT IS THE MOST IMPORTANT
CONSIDERATION WHEN SHOPPING?
127
126
124
115
109
100
0 20 40 60 80 100 120 140
What chemicals & pesticides are used in its production
What preservatives are added
What hormones are found in meat and dairy products
The antibiotics in your meat and dairy products
Products are free range or organic
Genetic engineered crops
WHICH OF THE FOLLOWING IS
IMPORTANT TO YOU WHEN BUYING
FOOD?