🇬🇧 Will consumers pay more for low carbon beef?

With ‘climate change’ on everybody’s lips and greater pressure on our farmers to produce more meat in a sustainable and environmentally-friendly way, there are concerns about the economics of this. Additionally, with cost of living so high and inflation rates soaring, will consumers pay more for these sustainably produced goods?

Are consumers willing to pay more?

It seems that people are making more conscious choices about where their produce comes from and its production methods. Consumers consider animals raised without antibiotics or hormones, grass-fed and humanely treated, as “environmentally friendly”. They are also conscious about the eco-friendly packaging a product may or may not come in.

A recent survey by PWC shows that consumers want cheap options for many consumables. However, some are prioritising products that are sustainable. They are willing to pay almost 10% more for them.

However, whilst 50% of those in the PWC survey will pay a 10% premium for sustainable products, most companies analysed in the survey were charging nearly 30% extra. This is unattainable for most respondents in the survey.

It seems that whilst people are prepared to pay more for low carbon products, there is a limit to their spending due to the high cost-of-living. If retailers drop their prices to around a 10% premium for these products, then customers will stretch that far.

Almost two-thirds of consumers say that the most significant increase in spending has been on groceries and a third say that inflation is affecting their purchasing choices.

Which retailers and processors have low(er) carbon meat schemes?

In the UK there are a few retailers that are selling low-carbon red meat to their customers.

ABP and Blade Farming has teamed up with Sainsbury’s and AgriWebb to produce an integrated beef supply chain called Gamechanger. It uses the very best Aberdeen Angus genetics which the supermarket sells as 100% British Sainsbury’s lower carbon Taste the Difference Aberdeen Angus beef. This also means 25% less carbon.

Scotbeef has set up a supply chain named Green Angus. It promises a fair and transparent supply chain. They are using data to drive genetic decisions as well as working closely with key stakeholders.

The Morrisons Sustainable Beef and Lamb Scheme is another programme. It offers advice and discounts to its farmers helping them to reduce their carbon emissions and be more nature positive. To ensure they produce sustainable meat, the scheme looks at the farm as a whole aiming to reduce carbon emissions. They do this through improving feed efficiency as well as off-setting through tree planting and soil sequestration.

Do consumers care more about environmental labelling?

Behind value for money and ethically reared animals, grass-fed beef is the third strongest motivator for consumers. However, whilst Midan Marketing found that customers are willing to pay 20% more for sustainable fresh meat, labels on products suggest a different story. Lables showing high animal welfare and the appearance of the product being fresh and tasty was a greater motivator for buying than low food miles and low carbon footprint.

This suggests that labels alone aren’t going to sway customers to purchase low carbon beef. Perhaps policymakers will have greater influence on purchasing decisions than what’s on the packaging.

Research also suggests that people across Europe perceive goat and sheep production to be less intensive than other forms of agriculture. So by buying goat and sheep meat and milk, they are purchasing lower carbon products without the need for a label. Other meat attributes are also considered differently across Europe. For example, meat labelled as organic is well received in France and Greece but less so in the UK. So, knowing where your sell best can influence their success.

Is it worth being part of a scheme and how do farmers capitalise on low (er) carbon meat production?

Being part of an integrated supply chain or scheme offers predictability for farmers. There is usually an agreed price that avoids market price volatility. Other benefits include a transparent supply chain and usually help in setting up the business and delivering the end product to the standards required.

Research suggests that whilst lower carbon products are valued by some customers, other attributes are more important. However, beef that is produced using less carbon is more likely to be grass-fed, kept outdoors for longer, and more feed efficient which all point towards animals reared to high welfare standards. So, if animal welfare is a greater motivator for purchasing decisions, then farmers can capitalise on producing higher welfare beef with a lower carbon footprint.

Do we expect to see more environmental labelling in the future?

More than a decade ago front-of-pack nutrition labelling launched in the UK. This took a huge amount of time and effort to impleement. It also resulted in numerous debates and arguments between industry experts, food processors and the government. Since its launch there is little evidence the traffic-light system works. Moreover, there is no decline in obesity rates as a result.

Across the globe, there are 350 different eco-friendly food labels in use. In the EU different labelling companies are jostling for position, each advertising theirs as the best. The Brexit campaign suggested the UK would create and display its own eco-friendly labels for food. However, the government “has no plans at present to introduce a mandatory eco-label, nor to endorse an existing or new eco-labelling scheme”.

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