Ethical Consumerism: The Local Food Company

Executive Summary The report aims to understand the concept of ethical consumerism, with the help of an organisation that operates ethically. The selected organisation is The Local Food Company in the UK. The Local food company is engaged in sourcing and delivery of fresh, local and organic food including fruits and vegetables (organic and non-organic), dairy, grocery baked products and household items. Firstly, the report will provide an introduction to ethical consumerism and ethical products. Secondly, the report will conduct a detailed analysis of The Local Food company ethical activities and its socially responsible business. Thirdly, findings from a short opinion survey based on consumer behaviour are presented, Lastly, the report will conclude with the key findings. 1. Introduction: Ethical consumerism Consumers are getting more informed with the help of Internet and this is influencing their buying decisions. According to many scholars, the idea of ethical consumerism rose from the end of the 20th century due to increased media and ability to access information, and better availability of products (Newholm and Shaw, 2007). Ethical consumers have political, spiritual, religious, environmental and social motives for purchasing one product over other options (Harrison et al., 2005). There are two types of purchase behaviour as stated by economists: traditional purchase behaviour and ethical purchase behaviour. People will normally buy the cheapest product but only if they are confident that the product is as good as slightly more costly options available (Beardshaw, 1992 cited in Harrison et al., 2005). This is known as traditional purchase behaviour. Sometimes, customers boycott a certain product or brand and opt for a fair labelled or environmental friendly product as they consider ethical means more important (Harrison et al., 2005). This type of behaviour is termed ethical purchase behaviour. An ethical consumer is not someone who is ignoring price and quality but is applying additional criteria when buying a certain product. Ethical consumerism can be defined as the degree to which the customers prioritise their own ethical concerns when making product choices (Shaw and Clarke, 1998). Ethical consumerism is linked with morality. According to Crane and Matte n (2005), morality is related to the norms, beliefs and values embedded in the social processes that aims to define right or wrong for an individual or society. Ethical consumers can boycott a product if they read something unethical about a brand or they can simply purchase products, which are ethically sourced or have ‘fair trade’ tag. Ethical consumers consider the impact of their act of personal consumption on the society and environment. They don’t purchase product that are harmful to environment and respect animal and human rights. For example: purchasing free-range eggs; boycotting products manufactured by child, forced labour or labours who are offered low wages. There are various products that fall into the ethical category are banking, cleaning, cosmetics & toiletries, dairy, energy finance, fashion, food, insurance, soft drinks, tea industry and travel. According to ethicalconsumer.org (2014), there are over 200 ethical products in different categories. for example, a washing machine to save water and energy, a cooker with the least environmental impact, baby bottle sterilizer and impact of plastic on environment; living wage of worker who manufacture clothes; materials use in shoes-pvc, leather, wool; purchasing a greener desktop computer; milk and animal welfare; low wages in banana industry; lead in lipstick; fair trade flowers; bio detergent for cleaner environment; green or eco insurance companies; mobile phone helping activists; human rights issues in constructing hotels, etc. 2. Review of an ethical organisation: The Local Food Company The Local food company is engaged in sourcing and delivery of fresh, local and organic food including fruits and vegetables (organic and non-organic), dairy, grocery baked products and household items (The Local Food Company, 2014a). The company aims to source majority of products from Devonshire and West Country. It is a family business operating for over 200 years in Devon. The company is based at farm shop, Countrymen’s Choice at Ivybridge. The company has provided an alternative to supermarket online services. Being a small producer, it is successful as an online retailer. The company has been awarded for its green practices and ethical means of working. It includes Internet retailer of the year in 2006 for the South West, Green business of the year in 2007 and greening Devon finalist in 2007 EDBI awards. The company has proved how to run a sustainable food business. The company states, â€Å"At The Local Food Company we believe in a fair deal for our customers, our suppl iers, the environment, animals and indeed for ourselves†. The Local Food Company claims to operate ethically. â€Å"The Local Food Company are a very green and ethical business; we believe right now we are the greenest place you will be able to purchase food from in the UK† (The Local Food Company, 2014a). In addition to ethical sourcing of product, a business is also regarded as socially responsible when it fulfil the needs and wants of different stakeholders such as customers, employees, suppliers and investors. Any businesses that incur ethical artefacts attract as well as retain investors, customers and employees. To formulate this aspect, we take into account the Local food company ethical trading policies (The Local Food Company, 2014b). In exercising business ethics aspect, the Local Food Company have registered all employees to trade unions and provided them with fair wages and equal treatment. The company is against child labour, deductions from wages as a disciplinary measure, forcing employees to work excessive hours and discrimination. In addition to this, the company has no tolerance to bribery, blackmailing and bullying aspects among the staff and the consumers (The Local Food Company, 2014b). The Local Food Company has improved working conditions for employees making it safe and hygienic, hence boosting the morale of employees as well as strengthening the bond between the company and consumers preferences based on the products they produce. In some areas, it also operates above the minimum standards required by law in terms of safety of employees, rewards and values. This shows that the company’s main motive is not just to earn profit but also consider their employees’ needs and wants. At Local Food Company, any member of the staff is free to view his or her sentiment and the company usually accepts the sentiment equally without racial prejudice as well as discrimination based on gender. It can be seen that the company works as a socially responsible business in terms of employmen t practices; different ethical policies of The Local Food company are clearly stated on the website. The Local food company also promotes and encourages suppliers to follow ethical guidelines. All suppliers signed up have an e logo next to their goods. Also, there is no restriction placed on suppliers. Suppliers are free to sell from anywhere, via any number of outlets to buyers. However, the company monitors supply chain standards for unethical practices. Direct suppliers are asked to sign the acknowledgement of key trading ethical practices (The Local food Company, 2014b). Then after 1 year of work together with supplier, The Local Food Company introduces self-assessment questionnaire to promote ethical practices. Then, the company visits supplier farms on a regular basis to gain understanding of suppliers’ operation. Payment is made on time and done on the basis of market price (The Local food Company, 2014b). In order to attract customers, the company presents their ethical achievements so that customers can make informed purchasing decisions. The company engages in publishing policies, detailed supplier and product information on their website. In the first two years of trading, the company publishes comprehensive ethical and social charter giving consumers the freedom to access information about ethically sourced products (The Local Food Company, 2014b). It is good to know that any company within business platform needs to set out ethical guidelines that in turns lead to less risk hence increasing sales output. Based on this point, The Local Food Company in array of business produces various products including Bakery, Dairy, Meat and fish, Fruit and Vegetables, Prepared Ready Meals, Groceries and Drinks and Household items. These products however, are produced based on the standards bureau and local organic food regulations. The company has to ensure that buyers as well as suppliers are free with no restrictions to buy and sell the products anywhere and across the country on any outlets. In this way, the company ethically gives the buyer and suppliers all rights to their preferences without an essence of restrictions. The company has been able to drive business risks through these corporate forms of business to maintain maximal sales profit as far as financial outcomes of the business is concerned (Beauchamp, 2004). The Local Food Company has played a bigger role in encouraging small producers to implement ethical practices. To ascertain the aspect of ethics, the company exercises the aspect of ‘go green’. The company ensures that all products unveiled to the consumers are in better conditions; with highest order of hygiene and that all materials used are environmental friendly. The company sells food with a low footprint in collection and delivery. They claim to have lowest carbon footprints of all the businesses in the UK (The Local Food Company, 2014c). The company encourages customers to but locally and regionally, and cut food miles. Foods are based on high animal standards and sustainable farming practices. The company provides written guidelines on the waste disposal and insists on recycling programme for the benefit of the consumers. They reduce, reuse, and recycle everything possible. 3. Short opinion survey: what influences consumer buying behaviour A short opinion survey was carried out from a sample of students at GSM London. Students were asked about the main factors that influences buying behaviour. Most of the students considered the location of the store as an important aspect when purchasing a product. One of the student stated, â€Å"I don’t like to travel much for a product and always looking for options available near my location such as Starbucks coffee shop that can be found anywhere†. Some students also considered that they avoid stores that are crowded. Students also considered reading online reviews before making a buying decision. A student said, â€Å"If I am planning to buy something, I always search online reviews, if majority of reviews are positive, I make a purchase without thinking of the brand†. Few students mentioned about ethical behaviour in purchasing. They stated that after reading about a brand in news about forced labour or child labour, they boycotted the brand. A group of st udents mentioned about Rana plaza disaster, which changed the way they purchased products. The disasters resulted in number of deaths and injuries. Consumers regarded this as a serious issue and didn’t purchase from clothing brands that were involved. Students are also influenced by news videos circulating in social media. One of them stated, â€Å"I was very much depressed when I saw Peta video of how Chinese worker were handling rabbits for getting angora wool; this video encouraged me to say no to angora wool†. 4. Conclusion An ethical consumer is the one who applies additional criteria when buying a product. They want to buy a fair-trade labelled or ethically sourced product. They consider the impact of their private consumption on society and environment. An ethical consumer simply boycotts product that are associated with child labour or other unethical activities. There are various products that come into ethical category such as food, clothing, insurance, energy, soft drink tea and finance. One of the companies that claim to be ethical is The Local Food Company, based in Devon in the UK. The company is engaged in selling of bakery products, dairy, meat & fish, fruits & vegetables and household items. The company has been awarded with many green awards. The company acts as a socially responsible organisation and aims to fulfil needs and wants of different stakeholders such as customers, suppliers and employees. Suppliers are encouraged by The Local Food Company to follow ethical procedures in product ion. They are given the liberty to sell their food via any number of outlets. They are paid on time and treated respectfully. Ethical policies clearly show that company is against child labour and excessive working. The employees are offered safe and hygienic working environment. For customers to choose wisely, the company has listed information on supplier standards and ethical practices on their website. With the development of Internet technology, customers are getting more informed about the products they use or consume. According to the opinion survey conducted, customers make their purchasing decision on the basis of online reviews, location of store and store environment. They also consider ethical factors when buying a certain product. They boycott a brand when they read something bad about a product or say no to product that are against human rights. 5. References Beauchamp, T. (2004) Case studies in business, society and ethics, 5th edition, Upper saddle River, NJ: Pearson Prentice Hall. Crane, A. and Matten, D. (2005) Corporate citizenship: toward an extended theoretical conceptualization, The Academy of Management Review, Vol. 30, Issue 1, p166- 179. Ethicalconsumer.org (2014) Product guides, Last accessed 23rd November 2014 at: http://www.ethicalconsumer.org/buyersguides.aspx Harrison, R., Newholm, T. and Shaw, D. (2005) The ethical consumer, 1st edition, Wiltshire: Sage. Newholm, T. and Shaw, D. (2007) Studying the ethical consumer: a review of research, Journal of Consumer Behaviour, Vol.6, Issue 5, p253-270. Shaw, Deirdre S. and Ian Clarke, (1998) Culture, Consumption and Choice: Towards a Conceptual Relationship, Journal of Consumer Studies and Home Economics, Vol. 22, Issue 3, p163-168. The Local Food Company (2014a) Welcome to the Local Food company, Last accessed 23rd November 2014 at: http://www.thelocalfoodcompany.co.uk/ The Local Food Company (2014b) Ethical Policy, Last accessed 24th November 2014 at: http://www.thelocalfoodcompany.co.uk/p/ethical-policy The Local Food Company (2014) Environmental issues, Last accessed 24th November 2014 at: http://www.thelocalfoodcompany.co.uk/p/about-us/about-environmental-issues