The Return of Price Sensitivity
In the past few years, consumer attention has centered on organic and high-end products, with eco-friendliness serving as a key decision-making factor. Now, rising inflation is shifting that focus. Increasingly, price is taking center stage, a trend highlighted by the growth in sales of more budget-friendly brands. This shift also draws attention to the economic and social aspects of sustainability.
Sunday, February 26, 2023
As reported by "NZZ am Sonntag," Switzerland is experiencing a shift from an "organic boom to a budget boom." Despite its relatively successful fight against inflation, Switzerland has seen the cost of many goods—especially food—rise sharply. For example, in 2022, the price of eggs soared by 14%, cheese by 6%, and bread by 4%, compared to an overall inflation rate of 2.8%. Consumers are noticing and reacting, gravitating towards more affordably priced products. The budget lines "M-Budget" from Migros and "Prix Garantie" from Coop are reaping the benefits, with especially strong sales growth. Discount retailers like Aldi and Lidl are also confirming a consumer trend toward more cost-effective options.
A Pivot in Consumer Priorities
This changing landscape can be seen as a pivotal moment in consumer behavior. Major retailers have been consistently expanding their range of organic and premium products for years. However, according to a survey conducted by the Swiss shopping list app "Bring," price is now overwhelmingly the most critical issue for shoppers. Over 70% of respondents expressed concern about rising costs, while only a third still prioritize eco-friendliness. Supporting this trend, sales numbers for organic goods have stagnated; Bio Suisse will release its data in April, but neighboring Germany has already reported a contraction in its organic market for the first time in 2022.
The Intersection of Price and Sustainability
The recent bankruptcy of the organic chain Müller serves as a case in point for this changing landscape. It underscores the reality that consumers have a limit to how much they are willing to pay, even for eco-friendly products. Sustainability isn't just about being green; it also needs to be economically viable. If a product is environmentally superior but prohibitively expensive, it can't really be considered sustainable. This sentiment was highlighted in our latest newsletter. Additionally, governmental policies and increasing regulations are adding to the cost burden on both producers and consumers. Babette Sigg, the President of the Swiss Consumer Forum, points out in “NZZ” that current trends towards more regulation and consumer education are only serving to push prices higher.
A Comprehensive View of Sustainability
Sustainability discussions often overlook the productivity aspect of agriculture. True sustainability requires efficient use of resources—land, water, fertilizer, pesticides, labor, and money. Essentially, any agricultural activity is a modification of nature. While the belief that organic farming is beneficial for both the climate and biodiversity is widespread, emerging studies are questioning this notion. For example, the larger land footprint of organic agriculture reduces the availability of land that could absorb greenhouse gases. A study from the UK also suggests that such expansive land use negatively impacts biodiversity more than intensive agriculture on smaller plots would. Given the ever-increasing global population, agriculture must aim for both economic and ecological efficiency, ensuring both profitability for farmers and affordability for consumers, while also acknowledging the social implications.
Sources
Related articles
How regenerative farming and AI can drive sustainable agriculture
Can regenerative farming, digital technology and artificial intelligence help us resolve the contradiction between sustainable and productive agriculture?
Imports instead of regionality: tomato virus destroys domestic production
Although tomatoes and peppers are among the most popular vegetables in Switzerland, most of them are imported. Extreme weather conditions and diseases are to blame. The first companies have already developed resistant tomato varieties – but the federal government remains sceptical of new technologies.
Catastrophic wheat harvest: Bad weather and restrictions on crop protection
The reports are piling up: 2024 will go down in history as the worst wheat harvest in decades. One of Switzerland's largest grain collection centres in Thalheim an der Thur suffers a historic loss.
« The Bernese winegrowers spray and spray »
The heavy rainfall this summer has hit Bernese wine-makers hard and once again made it clear that crop protection is essential – especially in difficult growing years. The fact that fungal resistance also affects crop losses shows how precarious the situation is. Nevertheless, the federal government is hesitant when it comes to the authorisation of modern pesticides and new breeding technologies.