Our recent research shows that the European buyers in natural ingredients’ sectors seek information related to the product’s origin, processes and quality standards, social and environmental impacts.
In 2019, 62% of young British consumers admitted they would reconsider their purchasing behaviors if companies shared more product data and were better at communicating the environmental impact and sustainability of their purchases. Driven by this and other similar consumer demands, European companies, sourcing natural ingredients, are encouraged to extend sustainability along their value chains. They look for suppliers with an appropriate level of awareness regarding the management of environmental and social issues, and matching product quality standards, which is often a daunting task. Therefore, European companies increasingly prefer investing their resources in order to increase the sustainability performance of their suppliers.
To find out more about how the European companies source natural ingredients and include transparency in their value chains, we’ve conducted extensive research with companies in the natural cosmetics, superfoods, and agri-food sectors.
The research exposed 3 key conclusions with regards to the status of transparency in the value chains, as well as the real transparency requirements of European companies when looking to establish trade relationships with new suppliers.
- European brands demand more transparency data from their importers: European brands, that work with importers, often aren’t provided with the transparency they would like to have. Brands feel responsible to promote sustainability along the entire value chain and demand more transparency data from their traders.
- European buyers are having a hard time finding reliable, transparent, and sustainable suppliers: All the interviewees stated the difficulty of finding quality transparent suppliers. They see clear benefits in digital tools, displaying and communicating sustainability information about various suppliers in a transparent manner.
- Companies prone to innovation showed great enthusiasm for communicating environmental and social impacts: companies prone to innovation recognized the value of communicating environmental and social impacts the most, to match their own values with their customer’s values.
The research also gave us a deeper understanding of the information that buyers want to get from their potential suppliers when choosing who to work with:
Regarding the basic product info, most interviewees emphasized the importance of knowing the exact origin of the product, for example, about the locations of the farms and farmers who grow the ingredients, used in the end consumer products. Certificates demonstrate the ingredient’s quality and safety and confirm the product’s authenticity. Disclosing full information about the product’s ingredients, certified or non-certified, and their nutritional values are essential to ensure that the end consumers are appropriately informed before purchasing and consuming the product. Details about materials used for packaging are relevant, too: information about natural or recycled materials in your packaging will add up to your product’s value since European buyers are increasingly concerned about the environmental impacts of packaging.
For European buyers, it is most important that the product complies with the quality requirements and performs well in quality control checks. With product specifications (product specs) you easily demonstrate your product’s quality to the buyers, since the Product Specs document contains all the essential information about your product, i.e. information about manufacturing, testing, labeling, storage, etc. Furthermore, nutritional test controls and pesticide tests (or other equivalent tests) will certainly increase the chances that European buyers choose your products.
Details about the production’s processes are increasingly in demand in Europe. In the past few years, many European manufacturing companies in the natural ingredients sector started communicating information about how the products are produced. By publishing videos, photos, and facts about the production processes and storage conditions on their websites, they have increased consumer trust, loyalty, and engagement. Keeping detailed production records is a key prerequisite for new buyers.
Information about the positive social impacts of your company is highly sought by European buyers. Do you treat your employees fairly and equally, pay a living wage to ensure their livelihoods, offer them social security schemes, vacation days, maternity leaves, compensation for overtime, accommodation, etc.? Acting socially responsible can positively influence the relationships with your producers and add to the quality of your product in the long run. Details about your social responsibility actions that benefit your employees, other workers in the value chain, communities, or society at large are extremely compelling for the conscious and responsible European consumer and will certainly make your product more appealing to the buyers.
Similarly, information about the positive environmental footprint of your production practices is becoming the new norm for the European market, oriented towards reaching climate adaptation goals. Do you use your water resources sustainably, prevent any unnecessary environmental pollution of the farmland, do you limit the use of pesticides, and limit your CO2 emissions? Displaying details about your environmental impacts will very likely spark interest among European buyers.
At Anteja we believe that communicating such information about your company and product will lead to greater transparency and sustainability in global value chains as well as to an improved market position of your agribusiness. Details about product origin, quality, production processes, environmental and social impacts should not only respond to recent trends but become the new norm to create truly sustainable value chains.
Have you wondered how well does your company integrates transparency in your business practices? We have a gift for you! Try out our free self-assessment tool called Clarimeter and evaluate if your company should be taking any further actions towards transparency and sustainability!
Does your company already have the sustainability details at hand but you’re not sure how to use it to appeal to European buyers? Anteja has developed a digital transparency tool that can help you with that! For more information, you can contact us at jon@phy2app.com and we will get back to you as soon as possible to schedule a Zoom call.
