Environmental-impact labelling: options and impacts for retailers and brands

(2 min read)

ProVeg Tips

Plant-based foods are the best way for retailers and consumers to meet their shared sustainability goals. If you’re looking to certify your product as plant-based, talk to our V-Label team. V-Label is an internationally recognised registered seal for labelling vegan and vegetarian products that provide reliable in-store guidance for consumers. The V-Label has partner organisations in more than 30 countries that speak more than 20 languages, making us uniquely positioned to support your products, both locally and internationally. If you’d like to find out more, please get in touch via the V-Label website.

Introduction

Following high-profile endorsements from the UN and IPCC^[1] United Nations Food and Agriculture Organization https://www.fao.org/3/i5640e/i5640e.pdf Accessed 2022-03-17^[2]Intergovernmental Panel on Climate Change, Special Report: Climate Change and Land (2019) https://www.ipcc.ch/srccl/ Accessed 2022-03-17,  environmental impact is now the number-two reason for consumers choosing plant-based products (moving up the ranks from previous years).^[3]Innova Trends Survey 2020 and 2021. Average of (Brazil, China, France, Germany, India, Indonesia, Mexico, Spain, the United Kingdom and the United States).

With more consumers seeking planet-friendly diets, there’s an opportunity for brands and retailers to meet this new and growing demand. But offering sustainable products alone isn’t enough – you need to communicate the benefits.

In this article, we’ll outline:

• How plant-based diets deliver sustainability for the whole value chain
• Current methods of environmental-impact labelling
• How some brands and retailers are using different approaches to communicate their products’ sustainability benefits

Understanding the problem: why is sustainability difficult for consumers?

Globally, 85% of people have shifted towards more sustainable purchases over the past five years.^[4]Businesswire (2021): Recent Study Reveals More Than a Third of Global Consumers Are Willing to Pay More for Sustainability as Demand Grows for Environmentally-Friendly Alternatives. … Continue reading Many people are including dietary reform as part of this shift. In Europe, 40% of consumers are actively reducing their consumption of animal-based products ( and identifying as flexitarian, pescetarian, vegetarian, or vegan).^[5]Smart Protein (2021): What consumers want: A survey on European consumer attitudes towards plant-based foods. Country specific insights. European Union’s Horizon 2020 research and innovation … Continue reading While health remains the top driving force, environmental impact is now a close second – having climbed up the list of consumer motivations in 2021 to be the number-two reason consumers are choosing plant-based foods.^[6] Innova Trends Survey 2020 and 2021. Average of (Brazil, China, France, Germany, India, Indonesia, Mexico, Spain, the United Kingdom and the United States).

When it comes to the environmental impact of their food, concerned consumers go through three stages of awareness:

• No idea how damaging intensive animal agriculture is.
• Some idea, but not aware that plant-based foods are the solution.
• Strong understanding of the above, and a desire for a plant-rich diet.

The problem the food industry needs to solve is how best to move consumers out of the ‘no awareness’ stage, and into a place where shoppers feel empowered to make informed decisions about the impact of what they eat.

Most people don’t really understand just how big the impact of animal meat is. But once they understand it, they recognise that they need to change their habits.”

Balázs Tarsoly

CEO of Branding Cuisine

Globally, only 49% of consumers are aware that plant-based alternatives are better for the environment.^[7]Innova Trends Survey 2021. Average of Brazil, China, France, Germany, India, Indonesia, Mexico, Spain, the United Kingdom and the United States.

“This is a fantastic opportunity for retailers and brands to meet their net-zero targets,” agrees Stephanie Jaczniakowska-Mcgirr, Head of Food Industry & Retail at ProVeg International. “By raising consumer awareness of the environmental impacts of food, businesses can support consumers in choosing delicious and nutritious plant-rich diets that are better for people, animals, and our planet.”

So far, we’ve established that there’s growing consumer demand for sustainable products, that retailers and brands need to meet their net-zero targets, and that plant-based foods offer a great solution for everyone. (Selling more plant-based products can also help increase your overall revenues – see our whitepaper ‘3 ways to achieve price parity and drive sales’). In the next section, we’ll outline the current methods available to retailers and brands for communicating environmental impact to consumers. But before we start trying to lead consumers through an awareness journey, it’s essential to understand where they’re coming from. It’s time for a quick walk in your consumer’s shoes through those shiny supermarket aisles…

Case Study: navigating sustainability as a consumer

Let’s say you’re a typical consumer who cares about the environment but is super busy and shopping with young children. As you browse the chilled-burgers section, sustainability pops into your head. Assuming all of the tastes appeal to you, you now have thirty seconds to try and weigh up:

• Is locally-produced meat better than imported plant-based alternatives?
• If the animal was grass-fed, does that make it sustainable?
• Can you afford the sustainability premium? 
• Does a dairy-cheese vegetarian burger count as sustainable?
• Are plant-based products nutritious enough?
• Should you be avoiding soya products?

As a retailer with environmentally-concerned customers and net-zero targets of your own, you have a responsibility to provide answers to these questions quickly and concisely. But this is a challenge since it’s a complex subject. Let’s have a look at some of the issues underlying this complexity:

• Transportation only accounts for around 7% of food emissions, meaning that local sourcing is trivial compared to other factors.
• Grass-fed cattle generally have imported soya grain mixed into their feed – in fact, 77% of soya beans produced worldwide are used for animal feed, which means that livestock is driving deforestation in the Global South.^[9]Food Climate Research Network, University of Oxford USDA PSD Database, cited from Ritchie, H and Rose, M (2021): Soy. Our World in Data. AVailable at https://ourworldindata.org/soy (last accessed … Continue reading
• Producing 1 kg of edible beef requires up to 25 kg of grain. This inefficiency is a waste of plant-based protein that could instead be consumed directly by humans.^[10]Cited from A well fed world. Plant-based hunger solutions (n.y.): Feed-to-meat – conversion inefficiency ratio. Available at https://awellfedworld.org/feed-ratios/ (last accessed 10.02.2022).
• Beef and dairy cattle emit roughly the same amount of greenhouse gases, meaning a veggie burger containing cheese is not an optimal choice for sustainability.^[11]United Nations Food and Agriculture Organisation: Global Livestock Environmental Assessment Model (GLEAM)  https://www.fao.org/gleam/results/en/  Accessed 2022-02-14
• The carbon-sequestering that cattle achieve through soil churn is “time-limited, reversible, and at the global level, substantially outweighed by the greenhouse gas emissions they generate,” according to a study by Oxford University.^[12]Dr Tara Garnett and colleagues, Food Climate Research Network, University of Oxford, “Grazed and Confused” report (2017), cited in “Is grass-fed beef good or bad for the climate?”, University … Continue reading
• Animal-based meat and dairy generate around 50% more emissions than plant-based alternatives.^[13] https://dietchangenotclimatechange.com/data/ Accessed 2022-03-23
• According to numerous national and international health bodies, including the UK’s National Health Service and the World Health Organisation, humans can live perfectly healthily (and, in fact, longer) on balanced, plant-based diets.^[14]McCullough ML. (2016): Diet patterns and mortality: common threads and consistent results. J Nutr.https://pubmed.ncbi.nlm.nih.gov/24717365/  Accessed 2022-02-17
• Harvard University has repeatedly dispelled the myths around soya being unhealthy^[15]https://www.hsph.harvard.edu/nutritionsource/soy/ Accessed 2022-03-23, but in order to respect consumers’ diverse needs, you need to offer a range of plant-based protein bases, including wheat and beans.

We’ve established that plant-based alternatives can be just as healthy as animal-based equivalents, and that when it comes to net emissions and environmental impacts, plant-based is the clear winner. So, how can retailers communicate this to consumers quickly and easily? 

The mission here is to improve the overall sustainability of our food, communicate this in a transparent, credible way, and enable people to learn from the data.”

Cliona Howie

Executive Director at Foundation Earth

Environmental-impact labelling: current options

Environmental-impact labelling is a way for brands or retailers to communicate their product’s eco-credentials to consumers – typically via front-of-pack messaging. However, as you’ll see, the methods are not yet standardised across the food sector. 

“It’s important we don’t repeat the mistakes of front-of-pack nutrition labelling, where several competing schemes emerged – which didn’t help consumers in their purchasing decisions,” warns Sue Davies, Head of Consumer Rights and Food Policy at consumer watchdog publication Which?.^[19]“Food sustainability: new eco label planned”, Which? 2021-06-28 https://www.which.co.uk/news/2021/06/food-sustainability-environmental-scores-label-planned/ Accessed 2022-02-07

This last point is tricky as there’s currently no international standard for environmental labelling. Right now, it’s up to brands and retailers to choose their preferred method.

The key is to experiment with different approaches until you have a clear signal that a label is positively influencing sustainable consumer behaviour. From there, you should streamline your methodology and aim for consistency. Using external accreditors and inviting other brands and retailers to join your optimal method will help the whole industry to converge on a set of standards that improve outcomes for the entire value chain.

Before we take you through the different methods being used, a quick word on expanding your plant-based product range. We’ve established how damaging animal-based products are for the environment, and you know that your consumers would benefit from plant-based alternatives. Veganising your classic ranges is a great way to meet your shared sustainability goals. You can make your products more sustainable, reduce manufacturing costs, and often extend shelf life. Check out which companies are leading the way, and how ProVeg’s One Ingredient team helped them do so in our white paper ‘Lessons learned from brands who veganised classic products’.

Metascore labels

Many consumers and brands are calling for a single, reliable indicator of a product’s sustainability. In fact, 55% of consumers globally feel that “there are too many environmental labels, so I don’t know what to look out for”.^[20]Innova Trends Survey 2021 (average of Brazil, Canada, China, France, Germany, India, Indonesia, Mexico, Spain, the UK and the US) In lieu of a universal standard, a single score would at least make sustainable shopping easier for consumers. It could even help retailers to provide an aggregate score of each person’s shopping visit (more on that later).

But providing a single score is complicated. “There are definitely some challenges in developing a reliable and simple environmental sustainability label,” says Dr Filippo Bianchi, Senior Advisor at the think tank Behavioural Insights Health Team. “A clear definition of sustainability is required,” agrees Commerce Analyst Lexington, adding that, to be effective, this definition should be “supported by informative, consumer-focused labelling.”^[22] Lexington (2021): Planting the future https://www.lexcomm.co.uk/planting-the-future

According to Dr Bianchi, if you want an ecolabel to incentivise positive behavioural change in consumers, the following features are essential:

• There should be a single score.
• It should be intuitive and easy to understand.
• It should be applied consistently to all products.

Unfortunately, there is currently no nationally or internationally accepted standard which can be applied universally. However, several organisations are working towards achieving this.

A single aggregate score could reduce label clutter, while better informing consumers, and improving their experience.

Case Study: Mondra’s Eco-Score – simplifying sustainability

Mondra is an eco-certification body that scores food products in terms of their carbon-equivalent emissions and water usage, as well as their impact on water pollution and biodiversity. They measure these factors during the five stages of a product’s lifecycle – covering ingredients, processing, transportation, packaging, and retail – to create an overall impact score.^[24]Mondra: https://mondra.com/post/carbon-labelling-2-0-now-with-added-roi Accessed 2022-04-20

A similar eco-accreditation label was launched in France in 2021. According to an Ipsos poll conducted five years earlier, 78% of French people lacked adequate information on the environmental impact of their product purchases.^[27]Ipsos: https://www.ipsos.com/fr-fr/alimentation-durable-les-francais-de-plus-en-plus-attentifs-ce-quils-mangent Accessed 2022-04-07 This problem galvanised a consortium of French businesses to unite and co-create the Eco-Score – a user-friendly front-of-pack metascore. 

In September 2021, Lidl began trialling Eco-Score labelling on its tea, coffee, and hot chocolate ranges in Scotland. Shelf tickets for these items also displayed the eco-label scores during the trial. Lidl collected customer feedback and analysed purchasing behaviour across the stores in order to determine the impact of the new environmental scores.

Is there a downside to meta-score labelling? The main issue is relatability. “Reduction in environmental impact is more of an abstract concept for consumers. What they link it to is ‘is this a sustainable product or not’?” says Cliona Howie, Executive Director of Foundation Earth, an independent NGO that’s bringing a harmonised eco-impact label to the food industry, working with Mondra to develop their certification methods.

How about limitations? “Our label can’t tell you if a product is vegan or gluten free – at the moment, you need a dietary label for that,” continued Cliona. “But there is much to be said about consolidation and convergence. The health crisis is the climate crisis.”

We would love to see a harmonised health-impact and environmental-impact score for consumers, and it’s something that ProVeg will be keeping a close eye on. In the meantime, for brands and own-labels looking to certify their plant-based products, the V-Label team has you covered. Globally, more than 40,000 products from more than 3,500 licence holders now carry the V-Label, which is registered in 27 countries, and licenced in several of them by ProVeg. If you’re looking to certify your plant-based product, you can find out more on the V-Label website.

Carbon-emission labelling

In lieu of an industry standard, some brands are pressing ahead with individualised eco-labels. “Sustainability labelling is definitely coming through from suppliers, who are responding to consumers,” notes John Gill, Head of Marketing and Trading at Booths, a food retailer in Northern England.^[29]Speaking at a panel talk at Plant-based World Expo and Conference, London, October 2021.

But why are these brands choosing to focus purely on carbon footprint? As Gill said, they’re responding to consumer demand.^[30]Innova Market Insights and ProVeg International, Innova Trends Survey 2021. Average of Brazil, China, France, Germany, India, Indonesia, Mexico, Spain, the United Kingdom and the United States.

• 75% of consumers care about CO₂ emissions.
• For 48% of consumers, carbon emissions are perceived as the most important indicator of a product’s sustainability.
• 58% would pay more for food and beverage products that are dedicated to reducing CO₂ emissions.

Oatly is a good example. Along with several other brands, Oatly publishes its carbon footprint on its packaging. To ensure that these figures are credible, they use an external accreditor. “Consumers want to know – and value that the source is independent and credible,” explains Cliona Howie, Executive Director at Foundation Earth. 

In Oatly’s case, they certify using CarbonCloud, an organisation that is “pushing for climate transparency with some of the boldest brands in modern food”.^[32] https://carboncloud.com/ Accessed 2022-02-07 Right now, most of Carbon Cloud’s customers are plant-based brands. The maths would figure.

But do raw carbon-emission figures have meaning to consumers? Or does it risk adding to the confusion? Emissions data is most useful when it’s contextualised. For instance, showing emissions savings as percentages rather than raw figures allows consumers to more easily see the relationships between different options. Most consumers don’t, for example, have a point of reference for 0.38 grams of CO₂ emissions. Is that good? Is it bad? Who knows! However, if you make it clear that your plant-based milk produces “80% less CO₂e than dairy milk”, the sustainability choice is clear.

Oatly ran into some trouble in January 2022, when the UK Advertising Regulator upheld complaints that one of their environmental claims wasn’t clear enough for consumers.^[35]BBC:  https://www.bbc.co.uk/news/business-60128075 Accessed 2022-02-17 A TV ad stated that “Oatly generates 73% less CO₂e versus milk, calculated from grower to grocer”. The regulator told the brand to remove the claim, because they weren’t comparing like-for-like – they were specifically comparing Oatly Barista Edition to full-fat milk, a fact that obvious to most consumers due to the way it was presented. In fairness to Oatly, their other environmental claims were upheld by the regulator. The lesson here is about finding that balance between conciseness and clarity for consumers.

In this next section, we’ll see how some brands have found a cunning solution to this problem.

Carbon-neutral certification

By far the simplest method of environmental-impact labelling – and possibly the most easily understandable for mainstream consumers – is to certify a product as ‘carbon neutral’. It’s a single metric based on a well-recognised term.

However, achieving carbon-neutral status isn’t straightforward. You can either self-certify your carbon footprint, which requires a lot of in-house specialist skills plus a lot of consumer trust in your brand, or you can call in professional carbon accountants to help. 

Cauldron, a British tofu brand, launched their first carbon-neutral products in January 2022. In order to achieve this, they enlisted the help of ClimatePartner to calculate their farm-to-fork emissions, including “ingredients, packaging, energy required to manufacture the product, transportation, and waste treatment”.^[36]“Proud our Plant Based food is Carbon Neutral”, Cauldon … Continue reading This helped them to reduce waste by 28% between 2020-2021. By scrutinising their entire production chain, they identified renewable energy as a key solution for lowering their production emissions. For established brands, reliable benchmarking is a vital first step in decarbonising.

Disrupters entering established markets have an opportunity to do things differently. In 2021, Nestlé launched its new pea-based milk alternative, Wunda, using yellow split-peas sourced from European farms. They wanted the beverage to be carbon neutral from day one, and partnered with the CarbonTrust to forecast the product’s full lifecycle emissions. They used these insights to optimise their production process in order to reduce avoidable emissions, and certifiably offset unavoidable ones.^[37]“Nestlé’s new pea-based milk alternative is epic in everything”, 2021-05-05, https://www.nestle.com/media/news/wunda-pea-based-milk-alternative Accessed 2022-02-10 This is sustainability by design, and it’s something all new products should be aspiring to. (Wunda also achieved nutritional superiority to many other plant-based milks, achieving a Nutri-Score of ‘A’ – indicating that the product scores well in terms of general nutritional value – which is a big draw for health-conscious consumers).

Cauldron and Nestlé use third parties to certify their products as carbon neutral.

So, what are the downsides? Well, a single-metric indicator like carbon neutrality is unlikely to generate the same environmental wins as more holistic meta scores. But the plus side is strong – it enables retailers and brands to tackle the metric that consumers are most concerned about – carbon emissions.^[40] Innova Market Insights and ProVeg International, Innova Trends Survey 2021. Average of Brazil, China, France, Germany, India, Indonesia, Mexico, Spain, the United Kingdom and the United States.

As Cliona Howie explains, “So far, we have seen that there’s less interest from consumers about whether a score is A, B, C, etc. – they’re more interested that brands have voluntarily committed to independent scoring.” In other words, the value-add for consumers comes from brands seeking external validation. This, combined with an easy-to-understand sustainability metric such as carbon neutrality can be a powerful motivator for consumers.

Self-certification

But brands don’t have to rely on external parties if they don’t want to. Upfield is self-certifying their products’ GHG emissions and publishing their methodology online for the sake of transparency.

Upfield, owner of brands such as Violife and Flora, is the world’s largest producer of plant-based spreads. They recently began to roll out emission labelling across their products, hitting their first 100 million units in 2021, with ambitions to soon hit half a billion. Upfield see emissions labelling as bringing three key benefits:

• Empowering eco-minded shoppers to make informed decisions.
• Raising awareness of food emissions for other shoppers.
• Differentiate themselves from damaging emitters such as as dairy butter.

“Once you give consumers information about sustainability, they’ll make a choice based on it,” explains a  sustainability representative from Upfield, echoing sentiments that we heard earlier. As the Upfield website puts it, “When people choose our plant-based products over a dairy product, carbon emissions are avoided. We call that ‘The Upside’”.^[41]Upfield: https://upfield.com/purpose/better-planet/ Accessed 2022-02-07 It’s clear that the brand is positioning itself to consumers as a market leader in sustainable foods. 

Conclusion

The best thing you can do is make your label easy for consumers to understand – choose a single metric that is intuitively colour-coded. And to make it  credible, use a trusted third party to certify your environmental-impact or emissions claims.

If your organisation is looking to satisfy the growing consumer demand for sustainable food, now is the time to expand your plant-based range. From advising on how to replace animal-based ingredients in classic recipes to tips on how to merchandise plant-based products to flexitarians, we’ve got you covered. Get in touch at [email protected].

Note: ProVeg conducts exclusive interviews with a wide range of industry professionals for its New Food Hub white papers. Unless an alternative citation is provided, quotations are from those interviews. Some interviewees wished to remain anonymous.