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Ethical consumerism is becoming critical to retailers.

What should retailers be aware of?

Group 3 members:

Shaun Manthree | Morgan Mlondobuzi | George Mushaike

Ntsiki Radebe | Lisa Tremeer

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Contents

Abstract ............................................................................................................................................... 3

1. Introduction .................................................................................................................................. 3

2. Business Problem ........................................................................................................................ 4

2.1 Background ........................................................................................................................... 4

2.2 Regulations ........................................................................................................................... 4

3. Objectives & Scope ...................................................................................................................... 5

3.1 Objectives ............................................................................................................................. 5

3.2 Scope ................................................................................................................................... 6

4. Research Conducted ................................................................................................................... 7

4.1. Research Audience: Consumers around South Africa .............................................................. 7

4.2 Research Methodology ......................................................................................................... 7

4.3 Research Plan ...................................................................................................................... 9

4.4 Stakeholders identified ........................................................................................................ 10

5. The Food Value Chain Analysis ................................................................................................. 11

Case Study for the Food Value Chain ............................................................................................ 14

5. Consumer Questionnaires .......................................................................................................... 16

5.1 Research Questions to consumers .......................................................................................... 16

5.2 Research Questions to consumers .............................................................................................. 17

5.3 Interviews with consumers in their homes ................................................................................... 19

6. Results of interviews with the formal retailers ............................................................................. 21

7. Results of interviews with the informal retailers .......................................................................... 24

9. Results from interviews with the Crop Farmers ............................................................................. 25

10.Results of the meeting with the department of Agriculture ............................................................ 26

12. Suggestions ................................................................................................................................ 29

13. References ............................................................................................................................. 36

14. Annexures ................................................................................................................................... 37

14.1 Recognised Regulatory bodies ........................................................................................ 37

14.2 Consumer Questionnaires - via survey monkey and face to face ........................................ 38

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Abstract

Ethical consumerism, coupled with corporate social responsibility, is fast becoming a global

expectation that requires a comprehensive corporate response. More customers are choosing to

purchase goods that are ethically sourced, ethically made and ethically distributed.

The release of the King Reports1 in South Africa has increased pressure on corporate businesses,

holding them accountable for the welfare of the communities within which they operate. The King IV

report necessitated integrated sustainability reporting and has resulted in a renewed focus on building

company reputation.

South Africa can benefit from international research to better understand public perceptions,

expectations and attitudes regarding corporate responsibility. These are emerging consumer

expectations and concerns that will impact on business practices, future business and branding

strategies, and ultimately the sustainability of any organisation. This sustainability hinges on products

and services that provide social and economic benefits, while protecting public health and

environment over their whole life cycle, from the extraction of raw materials through to the final

disposal of the product.

1. Introduction

The buzz phrase, “ethical consumerism” is more aptly defined by its level of activism. Thornton (2012)

viewed it as meaning that "… more customers are choosing to purchase goods that are ethically

sourced, ethically made and ethically distributed".

Depending on your choice of reference material and the stance you wish to take, the term can take on

any multitude of definitions. One of these, according to the Institute of Grocery Distributions (IGD) is:

“The practice of purchasing products and services produced in a way that minimizes social

and/or environmental damage, while avoiding products and services deemed to have a

negative impact on society or the environment.”

Over time, the term, “ethical consumerism” has evolved to become more of a convenient phrase that

acts as somewhat of a vessel for all odds and ends in tendencies and whatever is trending within

contemporary consumer markets. In popular culture, it covers a wide range of concerns from

environmental and animal welfare to labour standards and human rights to questions of health,

wellbeing, and community sustainability (Littler, 2011).

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The King Report on Corporate Governance in SA – A ground-breaking booklet of guidelines for the governance structures and operations

of companies in South Africa.

[1st issue – 1994 (King 1), 2nd issue – 2002 (King II), 3rd issue – 2009 (King III), 4

th issue – 2016 (King IV)]

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However, after unpacking the various definitions it became clear that the essence of ethical

consumerism involves the practice of purchasing products and services:

▪ that have been produced with the least amount of harm or distress to animals, humans or the

environment

▪ while avoiding those that are deemed to have or have had a negative impact on society at

large as well as the environment.

In her article “Ethical Consumerism and Conservatism: Hand in Glove” in the Heinz Journal,

Jacqueline Payne describes the ethical consumer as someone who buys things that are produced

ethically. Depending on the context, ethical production may mean producing something that is

recycled, produced in facilities without the use of slavery and child labour, or processing food that is

raised according to the principles of organic or free range farming.

It is therefore possible for one to be an ethical consumer and not even know it. However, the whole

point of the ethical consumerism movement is that one “knows” what one is purchasing and that one

buys things that are produced ethically because “not knowing” leads to abuse and exploitation.

For the purposes of this study, all four definitions will be used in conjunction.

2. Business Problem

2.1 Background

The study of ethics involves evaluating the morality of actions as well as their moral outcomes.

According to utilitarian thought, unethical means are justified if the consequence results in a greater

good for society. On the other hand, where actions are “right” in themselves, “what is ethical” is

defined by individual actions, not outcomes (Palmer, 1983). In a real context, consumers need to

understand what the retailer is doing and how they can make reasoned choices about merchandise

and food produced under more humane conditions.

What consumers need to understand is that food labelling is required for most prepared foods such as

breads, cereals, canned and frozen foods, snacks, desserts and drinks, while nutrition labelling for

raw produce (fruits and vegetables) and fish remains voluntary.

2.2 Regulations

There seem to be very few guidelines within the South African retail sector on how to build a

sustainable model. Nevertheless, the country relies on the Safe Quality Food (SQF) Certification with

SGS2, which proves that your organisation produces, processes, prepares and handles food products

to the highest possible standards. While this has a “dotted-line accountability” to the ethics of

production, the SQF is designed as a food safety programme that also covers product quality.

2 SGS is the leading inspection, verification, testing and certification company, recognized as the global benchmark for quality and integrity.

It boast more than 85,000 employees and operate a network of more than 1,800 offices and laboratories around the world.

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One of the more recognisable initiatives adopted by many leading eateries in the country is that of

the South African Sustainable Seafood Initiative (SASSI). It has been applauded for its “traffic light”

code system that assists customers in easily understanding the endangered status of the seafood

options offered on the menu. This is illustrated in the figure below.

Figure 1: SASSI’S traffic light code system

Other regulatory bodies that have been found to be making strides in this field are detailed in

Annexure 1.

3. Objectives & Scope

3.1 Objectives

Our team has been tasked with unpacking what South African retailers should consider since ethical

consumerism is becoming an influential factor in the consumers’ buying habits. Ethical consumerism

affects all areas of consumer purchasing - food, clothing, cosmetics, toiletries, and even some

services. The enormity of the task required the team to narrow it down to an area that would not only

be manageable, but also easily be related to.

Taking that into account, our research has settled on exploring the depth of awareness of South

African consumers / retailers relating to the entire value chain of the food they eat and how influential

price is in the decision to purchase a more “ethically-produced” product, and how, if at all, the different

population segments in the country are affected by it.

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3.2 Scope

The scope of our investigations is as follows:

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4. Research Conducted

4.1. Research Audience: Consumers around South Africa

Consumers were given a link via email to an online survey – Seventy eight completed the survey via

Survey Monkey, and eighty four consumers completed the questionnaire in person.

We received a total of 162 completed surveys and the results we have listed are a combination of the

online surveys and those completed in person.

4.2 Research Methodology

Secondary Data

The secondary data gathered was mainly through literature review of related research in journal

articles. This was done in order to develop the conceptual framework of this study. Both local and

international research reports on ethical consumption were used. The team also used a combination

of quantitative and qualitative methods.

Consumer Questionnaire

Questionnaires were distributed to a group of consumers in the Western Cape, Gauteng and KwaZulu

Natal in order to get an understanding of what consumers knew about ethical consumerism and which

part of the value chain was important to them when purchasing food.3 The underlying intention was to

gather information from consumers in various parts of South Africa to assist us with our

recommendations to the retailers as well as to confirm what consistencies were apparent, if any.

An additional survey was conducted through an online version of the questionnaire using the tool

Survey Monkey. This tool was useful for reaching a wider audience in a short space of time as it is

user friendly, anonymous and easy to complete. It also allowed us to interpret the data quickly and

easily as the tables and summary of information was readily available to view online.

Focus Groups, Consumer interviews and home visits

We conducted interviews with six families in Durban, KwaZulu Natal. This was a focused group

discussion among a sample of the population to verify the significance and depth of the data

gathered. This allowed deeper observation of respondent sensitivities with regards to the subject

matter that has assisted in developing the qualitative analysis of the data. Four of these families had

an income of more than R30 000 per month, 1 family did not disclose their income and the last

family’s monthly income was between R5 000 and R9 999. In these interviews, the family member

being interviewed ranged in ages; four were between 35 and 55 years of age, one was over 55 years

of age and one was 25 -34 years of age.

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Annexure 2: Customer Questionnaire

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Interviews with stakeholders

Six formal retailers: For a view on retail in the formal sector of retail in South Africa

• Cape Town: An SMME business in the southern suburbs

o Woolworths – Justin Smith (Head of Sustainability)

• Durban: Pick n Pay Bluff

• JHB: Pick ‘n Pay Lenasia

• Two in Tzaneen:

Seven informal retailers (spaza shops): For a view on retail in the informal sector of South Africa

• The areas we visited are townships in the North and West of Pretoria. Five spaza shops were

located in Soshanguve and Mabopane and two were located in Attridgeville.

• Crop farmers in Limpopo as well as with the Department of Agriculture in Cape Town – To

understand the challenges, requirements and legislation in the production and processing part

of the food value chain

Nastascha Harduth – Director at Werksman Attorneys – For insight into the food wastage in South

Africa and the legislation surrounding food donations by retailers.

International Immersion

• We travelled to Ghana, India and USA and combined our experiences in those countries as

well as the lessons we learned from our facilitators, local people, dignitaries and business

owners to include in this research.

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4.3 Research Plan

Research Area Research Method Target sources Delivery Date Custodians

Overall Awareness • Questionnaires

• Interviews

• Research

Papers

• Consumers

• Woolworths, Pick ‘n Pay and

small formal retailers

• Farmers

• Informal shop owners

• ILDP 2016 Class

• Lawyers

End of November 2016 All Ethicon team members

Quality of Source • Questionnaires

• Interviews

• Consumers

• Head of Sustainability for

Woolworths

• Farmers


Nutrition vs. Cost • Questionnaires

• Interviews

• Consumers

• Head of Sustainability for

Woolworths

• Farmers

• Informal shop owners


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4.4 Stakeholders identified

Stakeholder Group What we want from them How we engaged Key issues identified

Consumers Understanding the concerns of consumers

regarding the food which they consume

• Face-to-face questionnaire

• Customer surveys

• Customer interviews

• Home visits – ethnography

• Affordability of products

• Quality of products

• Price of food

• Health concerns

Retailers Understanding how issues of ethical sourcing

and ethical selling are addressed by the

business, as well as new developments &

customer trends

• Direct leadership

engagement

• Questionnaires/interviews

• Emails

• Sustainability of the business

• Business profitability


• Consumer health

Farmers and

Distributors

Understanding how food is produced and how

it ends up on the table of the consumer. What

measures are in place to ensure the security

of food in the process?

• Direct leadership

engagement

• Supplier surveys

• Questionnaires

• Emails


• Security & sustainability of

supply

• Fair pricing & payment terms

• Opportunities for cost

reductions

• Resource efficiency

Lawyers Understanding of the legislation pertaining to

food donations from retailers to the poor and

indigent people of South Africa.

• Emails

• Telephonic interviews

• Food wastage in South Africa

• Changes that need to made to

legislation.

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5. The Food Value Chain Analysis

The challenges that plague ethical consumerism span across the entire food value chain. In order to

get a clear understanding of the impact of ethical consumerism across the entire value chain, we met

with Justin Smith, the Head of Sustainability at Woolworths. He gave us some valuable insights into

the entire value chain.

Figure 2: Food vaue chain

Input

The essence of farming

Poorly managed intensive farming has many negative impacts on the natural environment, on

people’s well-being and on a farmer’s ability to adapt to change. It reduces species diversity and also

impacts the ecosystem. A dependence on and overuse of synthetic fertilizers, pesticides and

herbicides reduces long-term soil fertility, causes soil erosion, pollutes water supplies, poisons fragile

ecosystems, exposes farmers and farm workers to toxins, and contributes to climate change through

greenhouse gas emissions.

Farming practices must not only protect the long-term productivity of the land, but must also ensure

profitable yields and the well-being of farmers and farm workers.

According to Agricultural Statistics of 2008, South Africans had already shown interesting changes in

food consumption since the 1970s. Thanks to increased wealth and post-apartheid reforms, the

country’s middle class had increased by 30% between 2001 and 2004. This had allowed a shift from

staple grain crops to a more diverse diet. South Africans showed a decrease in the consumption of

the staples such as maize and bread, and had massively increased their annual consumption of

chicken from 6kg to 27kg per person. Per capita egg consumption had also doubled during this time.

Interestingly, the per capita consumption of fruit and vegetables remained constant, while beef,

mutton, pork and milk consumption declined.

The South African town of Tzaneen boasted 15 organic farmers in 2009 – a figure that dipped to

under five in 2016.

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Pesticides, herbicides and GMOs

It is estimated that less than 0,1% of sprayed pesticide (that at are known to kill amphipods and other

species that are important in the food chain) reaches the target pest while the rest ends up in the

environment (Pimentel & Levitan, 1986). The control of fertilizers, animal feeds and pesticides is

governed by the Fertilizers and Feeds Bill4.

Intensive farming practices are dependent on water, fuel, feed, synthetic fertilizers, pesticides,

herbicides and, increasingly, on genetically modified (GM) seeds.

Production

Ethical challenges in production

Child labour has always been an ethical challenge in the production / manufacturing stage. In South

Africa it is prevalent in subsistence family farms and needs to be addressed through, strong

incentives for education, and enforcement of child rights. In these circumstances, however, the

question does arise whether the right to food takes precedence over other rights, such as the right to

childhood education.

Furthermore, questions exist in debating the ethics of labour intensification in agriculture, as well as in

the investment in improved agricultural biotechnology.

Production systems that lead to sustainable development are highly desirable for reasons of both

human rights and long-term economic equity; as demonstrated, sustainable land and natural resource

management can ensure food security, as well as access to a biodiverse environment, and can

contribute to broader opportunities for economic development.

Processing

According to the Food and Agriculture Organisatons of the United Nations, the current trends that

affect the production and processing of food on a global scale are:

1. Human population growth and demographic shifts

2. Pressure on natural resources

3. Industrialisation of agriculture

4. Concentration of economic power

5. Globalization

6. Human-induced change

7. New biotechnologies: using microorganisms such as bacteria or yeast or biological

substances and processes, such as genetic engineering and synthetic hormones

8. Informatics

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As introduced in the National Assembly (proposed section 75)

(Explanatory summary of Bill published in Government Gazette No. 35902 of 23 November 2012)

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Part of the processing stage involves the correct labelling of products. To ensure consumer safety,

the Foodstuffs Act R146 makes provisions for labelling of purchase and consumption of food. There

are three types of dates that can be found on food products: “Date of minimum durability”, also

referred to as the "Best Before" or "Best Before End" date, "Sell By” or “Display Until” date and “Use

By” (Best Consumed Before, Recommended Last Consumption Date, Expiry Date). The first two are

simply quality issues, whereas the latter, the expiry date, is a potential health issue.5

Distribution

The involvement of retailers

Organisations such as Woolworths have had to get involved in the entire supply chain of their food

products to ensure that what ends up on their shelves can be fully guaranteed where quality and

safety are concerned. It is a challenge for some retailers to get involved in the whole process of food

production, especially in the informal sector, due to their size, capacity and resources available.

Ethical challenges in distribution

According to the food distribution report issued by the Foods Ethics Council in the UK, some concerns

that plague long supply chains include:

� Excessive contribution to climate change, especially when food travels by air.

� Dependence on dwindling oil reserves.

� The widened the gap in understanding between consumers and producers.

� The compromised welfare of animals through transportation over long distances.

Marketing

Ethical challenges in marketing

According to My Top Business Ideas the following are the top ten unethical marketing practices6

▪ False, exaggerated, or unverified claims

▪ Distortion of facts to mislead or confuse potential buyers

▪ Concealing dark sides or side effects of products

▪ Bad-mouthing rival products

▪ Using women as sex symbols for advertising

▪ Using fear tactics

▪ Plagiarism of marketing messages

▪ Exploitation

▪ Demeaning references to races, age, sex, or religion

▪ Spamming

5

Foodstuffs, Cosmetics and Disinfectants Act: Regulations: Labeling and advertising of foodstuffs, nr.R146

6 See Annexure 14.4

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Case Study for the Food Value Chain8

According to Justin Smith, Head of Sustainability at Woolworths, with regards to ethical consumerism,

Woolworths sets itself apart from other retailers by developing and maintaining an exclusive and a

long-standing relationship with their suppliers, as well as providing support and guidance on the farms

or in the food processing stage.

Everyone is under pressure to make food more affordable. Woolworths put pressure on the suppliers

to cut costs and streamline the supply chain in order to make the product affordable for the consumer.

The relationship with the supplier is key; this is the heart of the business. They work with the suppliers

to help them meet the environmental and social requirements expected by the company. What makes

them different is that the supplier becomes a partner and they are supported by the large corporation.

In recent years, there has been an international trend to reduce the sweet products in the check-out

aisles; there is also growing evidence of the negative impact of sugary foods on the consumer’s

health. The discussion in South Africa around sugar tax has brought this issue to the fore. Woolworths

has started to phase out these products in their check-out aisle, but it has not been an easy decision

as these impulse buys bring in huge revenue for the company. Another consideration is what these

products can be replaced with to minimise this financial impact.

They have been very deliberate about working across the entire value chain. From a pure

sustainability perspective, their biggest impact environmentally and potentially socially is in their value

chain.

INPUT:

In the agriculture space, there is very good legislation around water, and different biodiversity issues,

but not enough capacity to monitor or enforce these.

Supporting and working with the farmers is imperative. Woolworths initiated “Farming for the future”, a

programme that helps with measurement and monitoring of soil health and input as well. They help

the farmers with soil analysis and have a technical consultative audit process in place. This has been

beneficial to both parties.

PRODUCTION:

Woolworths have regular conversations and visits with the farmers. They have farmer trading days

and lots of information sharing results from the days. They have regular unannounced visits and

audits with their suppliers. They ensure regular testing takes place and enlist a third-party company to

carry out these audits. They regularly do random tests.

PROCESSING:

In South Africa, claims on food such as organic, gluten-free, sugar-free, free-range, and so on, are not

strictly regulated; that is why it is important for the retailers to use a third party for certification as it

adds credibility to their organisation. There is not enough regulation around the issues unless they

become public health issues. The sugar tax is case in point.

Packaging is imperative to ensure that the products reach the consumers in the best condition.

Products can sometimes be over packaged in order to retain freshness, and aesthetics always needs

to be considered so that the product catches the eye of the consumer. 8

As told by Justin Smith , Head of Sustainability at Woolworths

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DISTRIBUTION:

Preservatives are needed to extend the shelf life of products; however, Woolworths strive to have

fewer preservatives in their food. “We really pride ourselves on our cold chain. If we get that right the

whole way through, it can really offset any potential loss around the preservatives in food.”

A partnership with Imperial Holdings who have expertise in transport with a service level agreement,

ensures that the cold chain management is maintained. There is a sustainability scorecard in place for

the supply chain business unit.

MARKETING:

They have already built green stores, such as Palmyra Junction in Cape Town. The next step is get

external validation or certification for these initiatives in the form of a 5 or 6 star rating from the Green

Building Council.

Brand positioning is very important. Their most effective marketing tool is in-store signage and

information on the product. This is where they best engage with the consumer as they are reading the

label to check ingredients, sell by dates, etc.

The Marketing Council in South Africa monitors the marketing claims made by retailers.

RETAIL:

Woolworths is constantly striving to improve their stores and offering, and has introduced novel ways

to keep food fresh. For example, you may have spotted a sample tub of yoghurt in diary fridges to

check the temperature and thus maintain the cold chain.

In the future, they also intend to address issues such as moving towards using renewable energy in

the stores – even to become a 100% renewable energy business. There are also ongoing discussions

around stocking only free range meat in certain categories in the stories to improve animal welfare.

CONSUMERS:

Since around 2002, they only sell free range eggs in their stores. Animal welfare is a big issue to their

customer base and internationally there has been a big shift as well. They have had moral

conversations around what they will and won’t sell. There was customer pressure around six years

ago, when a customer complained that Woolworths were disingenuous or lying because they were

still using non-free-range eggs in some of their products, even though they would only sell free-range

eggs in their stores. As a result of this perception and customer push back, around 99% of their

products only contain free-range eggs as well.

Part of the customer conversation is listening to what they want and expect.

Of the chicken, they sell, 60% is free range; there is scale that has been built that is bringing down

some of the cost issues.

“We cannot do what we do at too much of a premium, otherwise we will lose support.”

Woolworths engages with customers on various channels, including via social media and call centres,

and conduct customer research on marketing programmes. They also take industry feedback into

account.

The Good Business Journey is a key part of their values. They set specific targets and hold people

accountable. It has been difficult to get people to understand that this is not an additional cost to the

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business, but it has a lot of benefit. Another challenge they face is perception versus reality. For

example, the biggest feedback they get from the consumers is about the packaging and perceived

over packaging of the products. However, one must consider that the biggest environmental issue we

face globally is food waste; so if the role of the packaging is to protect the product through the value

chain and extend the life of it, the massive amount of water, energy and resources saved by the

product not spoiling outweigh the negatives of the sturdy packaging.

Woolworths has conducted life cycle assessments on various products, with milk being one example.

The results showed that it is worse to waste one teaspoon of milk than to just throw away the

packaging because of the amount of input into the actual product itself.

The Woolworths customers do care about the value chain, especially where it makes the products

better or different, like the cold chain. They want to know that they are supporting local farmers and

sourcing local foods. They care about supporting South Africa – 90% of their food is locally sourced.

5. Consumer Questionnaires

5.1 Research Questions to consumers

We developed the consumer questionnaire to establish information on the following:

Overall awareness

• Are consumers aware of what ethical consumerism is?

• How much awareness is there around the current buzz words such as “green” and “organic”?

• What are the overriding concerns that the consumers have when making food purchases?

Quality of Source

• Does the knowledge of the food source have any influence on purchasing decisions?

• Are there any concerns where the production of food is concerned?

• Which part of the value chain is most important for the consumer?

Nutrition vs. Cost

• How big a role does the nutritional content of food play?

• How much value does the nutrition of food have over its cost?

The results assisted us to understand which parts of the value chain were most important to the

consumers.

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5.2 Research Questions to consumers

74% of our sample population is between the ages of 25 to 55, with the average salary range of

R10,000 - R29,000 contributing 51% and greater than R30,000 contributing 47% in earnings and 13%

of the sample.

MONTHLY SALARY

Less than R5000 8 7%

R5000-R9999 5 5%

R10000 - R29000 51 46%

More than R30000 47 42%

Total 111 100%

AGE

Less than 25 3 3%

25-34 29 26%

35-55 65 58%

More than 55 15 13%

Total 112 100%

This segmentation is important to retailers as these individuals have the buying power. They also

have family responsibilities and are providers within their homes.

It is important to communicate to this segment regarding ethical consumerism for the following

reasons:

69% of these shoppers indicated that they understand what ethical consumerism means and a further

73% care about the nutritional value in the food that they consume. These consumers have a high

affinity about how their food is produced (83%) and are interested about where their food comes from

(64%).

Sustainability and production methods are high on their agenda and this is substantiated by their

understanding of the following terms,

• Organic - 98%

• Free range - 93%

• Green - 73%

• GMO - 61%

• Carbon footprint - 79%

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From the above we can deduce that communication around product lines that take these terms into

account can influence consumer spend and potentially improve basket size. There is an opportunity to

further educate consumers on Genetically Modified Organisms (products) by highlighting organic and

free-range items, thus building the consumer’s affinity with the retailer’s brand.

In terms of the questions we asked about considerations which were MOST important when making

purchasing decisions, consumers rated the following:

Rank Consideration No. rated most important (from 160

consumers)

1 Ingredients 110

2 Visual appeal 94

3 Nutritional Value 90

4 Price 72

5 How it is produced 67

6 Where it is produced 61

7 Brand 44

It is evident that ingredients, visual appeal and nutritional value (content) are highest on the agenda

affecting purchasing decisions. This, coupled with sustainability and ethical consumerism, could be a

powerful mechanism to nudge consumers in their relationship with retailers. With price ranked fourth

on the list there is an opportunity to improve margins on ethically produced product, irrespective of the

brand. This could be a potential gain for the retailer in the bottom line.

To support this recommendation; consumers also rated these factors of production as illustrated in

order of importance.

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Rank Consideration No. rated most important (from

160 consumers)

1 Chemicals and pesticides

used

127

2 Added preservatives 126

3 Hormones in meat and dairy 124

4 Antibiotics in meat and dairy

products

115

5 Products are free range or

organic

109

6 Genetically engineered crops 100

5.3 Interviews with consumers in their homes

The results from the family interviews confirmed the results from the consumer questionnaire, but

allowed us to get more detailed information about the way consumers eat.

Below are the questions as well as the summarised feedback from these interviews.

1. Who does the buying of groceries for your family?

Three of the six families have the husband/father involved in the grocery shopping. This is

important as the retailers need to consider both sexes when marketing their brand. Only one of

the families did the grocery shopping as a family outing.

2. What are the staple foods that you must have in your home at all times?

The most common staple grocery items were rice, bread and milk, followed by fresh vegetables

and fruit.

3. Was nutrition important to your family when you were a child and how does that affect

your purchasing decisions for your family today?

Five of the families indicated that nutrition was important when they were growing up and it is

even more important now especially with children.

4. Do you read the labels on product when you shop?

All the families read the labels on the products they purchased.

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5. What type of information are you looking for on the labels?

The most important things that the consumers look for are: the ingredients; sugar, salt and fat

content, organic and GMO free.; whether there are artificial sweeteners and preservatives added

as well as the nutritional content. Price, expiry dates and whether or not the products were

vegetarian were not a requirement for most of the families.

6. Are there any specific symbols that you look for like ‘Halaal’, ‘product of South Africa’,

‘organic’, ‘GMO free’ etc.?

Halaal, organic and GMO free were the most common symbols that the consumers looked for

when choosing a product to purchase.

7. How do these symbols make you feel e.g. trust?

Five out of six consumers trusted the symbols as a guarantee of what they were buying.

8. How does price affect your purchasing? Does it differ across certain products? Are

there certain products you are willing to pay considerably more for? What are these

products?

Five of the families said that price was not as important as the quality and they were prepared to

pay a bit more for quality.

9. What can retailers do to increase your awareness of nutrition and sustainability?

Better advertising and more information, education about what is good and what is not healthy, a

way to clearly see the difference between organic and non-organic.

10. Do you think they do enough currently?

All six consumers felt that the retailers needed to do more in order to increase the awareness of

the ingredients. For example, certain preservatives are not listed completely, just the number, this

is confusing for the consumer.

11. What is your opinion about food wastage in your household and what do you think

some of the causes are?

Three of the consumers indicated that the only wastage is due to the expiry dates on the products.

The expiry date is usually very short but they discard the product when the expiry date is reached.

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6. Results of interviews with the formal retailers

The retailers that were interviewed gave us some valuable information regarding the retail sector and

the focus on elements of ethical consumerism.

We were particularly interested in understanding what they (their company) were doing to ensure they

complied with the United Nations guidelines (ii, general principles,) for consumer protection (2003).

There are seven guidelines in total.9

This is a summary of the interviews with the five different retailers:

1. Are the companies meeting the requirements of the UN?

The answers were unanimous that yes, they all felt their companies were meeting the

requirements. Health and safety were the top of the agenda for companies and all felt strongly

that the health and safety guidelines are met. At Pick n Pay stores, Jonathan and Wendy

Ackerman are in charge of the constant research and compliance. The smaller retailers did their

best to comply, but due to lack of resources and infrastructure were not able to have to have the

same focus or perform the same audits as the larger companies.

2. How can retailers make it more affordable for consumers to consume ethically?

The answer is to support local industries, farmers, markets, local producers and manufacturers.

To provide good quality fresh produce that is value for money, as consumers will not mind paying

a little extra for a quality product..

3. How can retailers make improvements in product safety (eg, preservatives and

additives like artificial colour) and corporate accountability?

They can ensure the products are sold in good condition and that ‘best before dates’ are adhered

to. There must be complete transparency regarding the labelling of the ingredients so that

consumers can make informed purchasing decisions. Labelling must be consistent, for example it

a requirement for all packaged foods to contain ingredient labels, but fresh food that is not

packaged does not need to contain the list of ingredients. This causes confusion for consumers as

they do not know what has been added to the food they are purchasing.

4. What responsibility do retailers have for the welfare of the animals (i.e. product testing,

animal cruelty, “cage-free”); the environment (resource use, carbon footprint, waste)

and human rights/working conditions and fair-trade?

Retailers have a great role to play with regards to buying products from slaughter houses that are

cruel to animals. Retailers must visit the site where they buy fresh meat, egg or milk products to

see how animals are being taken care of. The consensus between the retailers was that if the

9

United Nations Guidelines for Consumer Protection (as expanded in 1999) Section ii, general principles.

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perception from the consumers was that animals were abused or not looked after, they would not

buy the meat or meat products.

PNP audits the entire supply chain. They also have government audits example from the fisheries,

auditors from the agriculture division looking at the grades of the vegetables, e.g. potatoes,

including the size etc. The audits occur without warning, so PNP’s suppliers have to maintain the

highest standards at all times. The Health Department also does audits looking at the back area of

the store ensuring that everything is in order and clean. A couple of years ago, Checkers was

caught out by not grading chicken correctly. This made it into the newspapers, and these incidents

cause sales to decline. PNP wants to be ethical and let consumers know what they sell.

One of the smaller retailers indicated that they only use brown paper bags to pack the customer’s

groceries in as it is better for the environment.

5. Do customers care about ethical consumerism? Does it affect their buying patterns or

their spending in your store?

Some of the customers do care about ethical consumerism, however with the current economic

situation most consumers are looking for value for money. Consumers are searching for

affordable products that stay fresh. Saying that, consumers are still prepared to pay for better

quality products, but this is dependent on the LSM and the area of the store. For example, if a

retailer is in an area where the average LSM is low, people will continue to purchase poorer

quality products and so called ‘junk food’ as this is what is affordable, whereas in the higher LSM

areas, consumers want better quality and healthier foods.

6. Should retailers engage with consumers about ethical consumerism?

Yes, retailers should because if the consumer knows about ethical consumerism they will be more

aware where products are coming from.

A lot of retailers need to engage consumers about ethical consumerism. PNP have panels set up

independently with customers to find out what customers think about PNP’s products and also

what customers are looking for. PNP uses Smart Shopper as one of the mediums to collect and

analyse data. They look at a customer’s profile on Smart Shopper, and this can tell them whether

the customers will be interested in Green products, No Name products, specific brand names etc.

They don’t just put products onto their shelves; they investigate what they need. There is an

opportunity to improve communication to consumers via loyalty programmes.

7. Should retailers be transparent with consumers about ethical consumerism?

It is imperative for retailers to be transparent. Without transparency, you lose the trust of the

consumer. The retail industry is very competitive, unless you give your customers the right quality,

service and conduct business in an ethical manner, you will lose the trust of the customer. Once

you lose their trust they will not return to do business with you.

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More consumers are becoming aware of where their food comes from and the preservatives and

additives they contain. If the consumers are aware, the expectation is then for the retailers to be

transparent and not hide information from them.

Customers assist the retailer to learn more about their business. They are reading the labels

critically and they query what the products can be used for. Often the retailers need to contact the

supplier to find out about the product’s usage; this ultimately allows the retailers to improve their

product knowledge.

8. Is Fairtrade an important factor when selecting products for your store?

Yes, it is important in order to secure better trading conditions and promote sustainability.

Fairtrade is a movement that secures the payment of higher prices to small-scale producers, as

well as improved social and environmental standards.

Pick n Pay supports local farmers and small business. They have the Small Business Incubator,

which helps to increase local procurement by accelerating small suppliers into the supply chain;

improve and develop great quality and range of local products at competitive prices and provide

small producers a national platform by increasing access to national and regional markets.

9. Do Government-mandated actions and sanctions need to be in place to encourage

Ethical Consumerism?

The retailers feel that more can be done by the government with regards to the local

manufacturing sector and reducing the amount goods that are imported. They want to empower

South African people to grow their own produce.

It seems that government supports imports when they really should be encouraging farming and

manufacturing locally.

It was also mentioned that we need to ensure that we continue to support small businesses in

South Africa as well as supporting our African neighbours.

10. Is it necessary to have the following in place to encourage ethical consumerism:

Labelling, and certifications (“Fair Trade,” “Organic,” “Natural,” “Vegan”)

Labelling requirements are in place but some retailers indicated that they felt labelling was

inconsistent across the board. Many consumers are reading the labels before buying a product. It

is also important to have labels and certifications for the consumer as some of the consumers are

having health issues, food allergies and intolerances. Vegan and gluten-free labelling on products

exists, for example, but there is no guarantee for the customer that these products are vegan or

gluten-free as it is difficult to control and monitor every product.

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11. Do we need to form consumer groups monitor ethical consumerism (“vigilante

consumers”)?

There is a consumer body in existence, called TOPIC. It is a consumer-led organisation that tests

the authenticity of product labels. They invite consumers to nominate a product and its label claim

to be investigated.

There is also the Consumer Goods Council that investigates claims made by consumers about

products they have purchased of consumed.

12. Are there cultural and social influences (norms)

Yes, demographics are very important and you will find in popular centres like Pavilion and The

Bluff, customers are enquiring about nutritional value and healthier living. Especially in the black

community word of mouth has a major influence on consumer behaviour in terms of what they

believe is good or not.

Earnings are a 50/50 conversation e.g. minimum earners will try to get the best for what they can

afford. High earners are the ones you should watch out for as they are buying for convenience,

purchasing the top of the range products and they are looking for quality. It’s also a status

element; they need to provide the best for their kids in terms of quality, nutrition etc. Single

younger people earning good salaries are buying more frequently and want to have healthy meals

that can be put into a microwave. So we are seeing a change in consumer behaviour being

influenced by social circumstances.

We have definitely seen a trend with the younger consumer for better quality products that are

more readily available. These consumers know what they want including the brand, the price and

the ingredients in the products. We have also seen an increase in the demand for sugar free food

and food with minimal carbohydrates; this is often referred to as Banting friendly food.

7. Results of interviews with the informal retailers

The spaza shops were all based in Pretoria, in Shoshanguve, Mabopane and Attridgeville. Only two

of the seven spaza shops that we interviewed were registered as formal business entities.

Our first observation for these interviews was that the shops were all foreign owned, mostly by

Pakistani nationals; none were South African owned.

Another observation was that food was placed on the floors in all these spaza shops, despite the

unhygienic conditions. We asked the shop owners about the legislation for food hygiene and food

safety and whether or not they felt they complied with the relevant legislation. The answers were

unanimous; they all mentioned that they were not aware of any laws around food handling, packaging

or labelling.

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With regards to the purchasing of their products for resale, they buy their products from wholesalers

and their fresh produce is bought from the Pretoria market in Marabastad.

None of the informal retailers are involved in the production process as they buy their products

already packaged to sell. They also buy bulk quantities and repackage in their spaza shops. This is

done mainly with products such as sugar, salt and tea bags. Most of their customers buy in small

quantities; hence the need to repackage it themselves in the quantities that are required. They do not

adhere to the regulations with regards to packaging, labeling or expiry dates.

When asked about whether they think their customers are concerned about how they handle the food

that they sell, they replied that customers do not really get to feel or touch the merchandise as they do

not come into the spaza shop, but rather purchase through small windows due to security concerns.

They all indicated that they do their best to ensure that their food is not contaminated and is safe for

consumption.

In general, ethical consumerism is not top of mind for these informal retailers as their customer base

relies on the spaza shops selling affordable food on demand. The consumers want affordable food

that is readily available. No demands have been made for ethically sourced or produced products. It is

therefore not something that is followed and there are no plans to start doing so either.

9. Results from interviews with the Crop Farmers

There are many challenges that the crop farmers face:

The first challenge is transportation: 73% of producers in Limpopo use their own transport to move

supplies for distribution. This is costly and difficult to factor into the cost of produce and the suppliers

of the organic supplements required for production is often too far from farm. The route to market

seems to be dominated by Woolworths and as a result, the majority of the produce (60% - 70%) can

only be sold to the retail giant. This leaves very little latitude for the negotiation of prices. The sale

price to Woolworths is almost at production cost to the farmers which means very small profit margins

for the farmers.

The second challenge is packaging, the farmers are not satisfied with Westfalia Packers (as produce

not adequately protected). Woolworths’ packaging raises the value of the produce, but the benefit

does not filter back to the farmers. The current infrastructure does not allow for in-house packaging of

produce and they have to rely on third parties.

The third challenge is basic information sharing. There is insufficient knowledge being passed on to

the consumer about what the production process entails.

The last challenge is the costs of production. Organic farming takes longer to yield the same results

as commercial farming. As a result, selling prices have to be higher in order to off-set the delayed

returns.

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10. Results of the meeting with the department of Agriculture

We met with Dr. Graham Leask, Veterinary public for the Western Cape. His area of responsibility is

Regulators of the Meat Safety Act (which controls all abattoirs and meat production facilities) in

ensuring that the meat offered to the consumer is safe for consumption. He discussed some of the

key challenges faced by the meat industry in South Africa.

The challenges that he identified were at various stages in the food chain. Regulation ends with the

slaughtered meat carcasses, it does not go beyond the abattoir. There are monitoring measures in

place but they not been changed or modified extensively since they were first put in place. The

abattoirs are limited as to how much can be slaughtered per day. This is dependent on size, capacity,

facility, staff component, and what they can manage overall.

There are 64 abattoirs in the Western Cape, with 8 government inspectors to oversee them. These

are currently split between red meat, white meat, and specialist abattoirs, due the differences in the

types of equipment used and processes followed.

The management of abattoirs is no longer state controlled, but largely privately owned and managed.

Most abattoir owners are also livestock raisers as it’s more cost effective. The prime reason for the

ownership of abattoirs is to service its own livestock.

In the past, farmers would pay a fee to the abattoir owners for the animals to be cut up, and would

then be responsible for the selling of the meat, hide, and disposal of the rest of the animal. Now the

abattoir owners buy the livestock from farmers to process, and are responsible for what happens to

the carcasses afterwards. There is no regulation of the cost of livestock or the processed carcass. It is

a free market. Farmers can decide how to price their livestock. Abattoir owners pay fees to regulatory

bodies. In addition, they are responsible for their own independent inspector on site to ensure the

adherence to rules and regulations (who cannot be part of the salaried personnel). Livestock farmers

who practice “free-ranging” take a lot longer to get their cattle to the same weight as commercial

farmers, as what they eat is not controlled. It eats what it gets. As a result, these farmers are forced to

increase the cost of these animals to ensure their long-sustained costs. The cost of livestock is also

increased in the event of a drought or some natural disaster that affects the quality and quantity of

livestock produced, therefore insurance premiums are very expensive, and it costs too much to insure

a farm enterprise adequately.

12. Results from interview with Nastascha Harduth

Nastascha Harduth, Director at Werksman Attorneys, said that “South Africa wastes a lot of food.

Research suggests that between 9 and 10 million tonnes of food waste is generated annually. This is

equal to about 30% of the local agricultural production in South Africa. Waste occurs at all levels of

the food system – in fields, commercial kitchens, manufacturing plants, warehouses, markets,

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schools, and restaurants. The bulk of this waste is, however, generated in the pre-consumer stages of

the supply chain.”11

She continued: “The South African Government recognises that certain organisations are dependent

upon the generosity of the public and to encourage that generosity, a tax deduction is allowed for

certain donations made by taxpayers. A taxpayer making a bona fide donation in cash or of property

in kind to a section 18A-approved PBO, is entitled to a tax deduction limited to the value of 10% of the

donor taxpayer's taxable income”.

“In addition, donations by or to a PBO are exempt from donations tax in terms of section 56(1)(h) of

the ITA 16. Notwithstanding the tax incentive and the obvious civic responsibility to donate surplus

food and despite the tax incentive that accompanies it, food recovery efforts are often stymied by

potential food donors’ fear of being sued.”

There is other legislation in place to protect the consumers and encourage ethical consumerism like

the Consumer Protection Act, The National Credit Act and The Foodstuffs, Cosmetics and

Disinfectants Act.

13. Results from our international immersion

Ghana:

More food is sold via informal traders than in shops, this informal sector dominates retail business as

they contribute about 75% to 90% of the retail market. People eat a lot of fresh fruit, vegetables, eggs

and meat/fish products that were readily available from the markets and on the side of the road.

Consumers did not seem to be concerned about the quality of food they consumed. After the visit to

Makola market in Accra, we noticed the way the food was being sold on the streets and the way it

was displayed – there was no packaging, ingredient labels or sell buy dates on any of the food

products in the markets, most products are not even covered, yet this did not seem to worry the local

people.

We also learned from His Excellency Kwesi Ahoi that Ghanaians in general have a different approach

to food - if a portion of a fruit is rotting or if bread becomes mouldy, a Ghanaian will cut off that piece

and consume the rest. This is the reason that packaging and labelling is less important to the

consumer and the vendors in that country. South Africa in his opinion has a very high standard of

packaging and labelling but this also adds to the cost of the product.

India:

The small informal retail businesses (Kirana stores) dominate the market.

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Harduth, Nastascha, 2016, Legislation Discussion Paper: Food Donations as a Mechanism to Limit Food

Waste, Food Insecurity and Malnutrition

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People are very much aware of what they eat due to traditional reasons. They have a green and red

sticker system to allow consumers to easily identify food which is vegetarian or meat.

Our visit to Big Bazaar indicated that there is a demand for organic products in certain areas which

shows that consumers are becoming educated about ethical food standards and food production. This

is still an emerging trend and the retailer is providing for it by accommodating these products in its

own merchandising area with display bays.

Supermarket Wala's CEO Damorda Mall has a different approach to Ethical Consumerism. The

company invests in recycling methods like using its plastic shopping bags and milk sachets to

manufacture benches which are donated to schools etc. Whilst the CEO manages ethical

consumerism and sustainability at a company strategy level, he believes that the customer will make

a purchasing decision on an unethically produced product if the price is cheaper.

Homemade food is consumed by most families - three meals a day. They are even delivered

throughout Mumbai in Tiffin tins by the Dabbawalla.

Recycling is very prevalent throughout Mumbai – tetra packs, plastic bottles and containers. There is

a big industry in the Dharavi slum. Nothing is wasted and there seems to be very little excess (nothing

is wasted) in this community. Very few plastic carrier bags are used in the supermarkets for the

packing of customer’s groceries.

The United States of America:

This is the most evolved economy and the people who we spoke with seemed to know what they

want and have enough information or access to the information of what they consume. Being the

most evolved economy the US certainly has high standards when it comes to food. In New York,

restaurants are graded for standards of cleanliness, hygiene, etc. This indicates the level of policy and

procedures to safeguard consumers across the retail food industry is well controlled. We noticed that

food labelling is on all packaged food, but not the food sold on the street by vendors.

We met with the Consulate General of South Africa who also raised issues around the kind of food

products sold in the country – organic, free range, etc. The same was confirmed through various

conversations while at Pennsylvania State University. It is therefore clear that people have access to

information and are able to make informed choices about their food. In Professor Meg Meloy's

presentation she confirmed that very little research has been done on ethical consumerism since

2004, and she gave us some valuable insights into why companies should engage. We also learnt the

importance of the following concepts and the direction we should take with our ALP, like why

companies should engage with their consumers, the importance of transparency, raising awareness

of ethical consumerism, which mechanisms need to be in place to encourage ethical consumerism,

rewarding firms actively engaging in ethical consumerism and nudging better behaviours.

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12. Suggestions

Here are some suggestions for the various parts of the value chain:

12.1 Inputs:

• Regulation of abattoirs

• More government inspectors need to be appointed for regulation purposes (allocate more

people and finances in order to facilitate this)

• Implement cost-sharing between farmers

• Inter-change and transfer of knowledge and skills

• The capital outlay of the facilities could be subsidised to ease the burden of cost on

owners

• Some form of regulation of the cost of livestock or the processed carcass must be put in

place to make sure that the market benefits all who work in it

• The Competition Board to be given more power in implementing and enforcing pricing

between players

12.2 Production:

• Livestock farmers need to acknowledge that we live in an area that is drought-prone. They

must therefore farm accordingly. We need to develop water-wise farms with adequate

irrigation that is sourced from non-potable water.

• Dept. of Agriculture, Forestry and Fisheries (DAFF) to finalize the legislation on organic

production and provide clear guidelines on operating parameters

• Small Enterprise Development Agency (SEDA) to coordinate mentorship and other training

required for all stakeholders

• Government should provide the tax incentives to organic farmers to buffer the deferred

income

• Provide educational support on how to maximise production quality while minimising costs

and losses

12.3 Processing:

• National Agricultural Marketing Council (NAMC) to coordinate a feasibility study on in-

house packaging

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• Facilitation for the provision of infrastructure for every farm to have the option of in-house

packaging

12.4 Distribution:

• Across the industry, the cold chain management system needs to be improved and be

more efficient; this will prevent food from spoiling and also limit the need for preservatives

to be added.

12.5 Marketing:

• Brine actually improves the texture of the meat (it makes it more tender). Better marketing

to be done to educate consumers about the injecting of brine into the poultry as to reasons

why this is being done. The injection of brine was never meant to be a deceitful exercise.

Free-range chickens (or any poultry that is allowed some movement) actually develop

tough skin, muscles and sinews. If the brine will result in 30% shrinkage, the consumer

must be aware of it.

• Marketing bodies for farmers such as the Red Meat Abattoirs Association that will work

together with the general media to educate the public about what are real issues and what

are not.

• Have better and bolder in-store signage to communicate to the customer and educate

them on what is on the shelves. Shelf talkers and point of sale material can be used

effectively to do this.

12.6 Retail:

• Provide access to an in-store health advisor or nutritionist to guide customers about a

healthy eating plan. In food stores, this could help consumers make informed choices

about the food they purchase.

• Wholesalers must become more vigilant in being able to know what gets sold on to

customers from spaza shops.

12.7 Consumers:

• Offer consumers the dot sticker system like in India – any food purchased with a green dot

indicates that it is completely vegetarian and anything with a red dot sticker indicates the

product is meat. We could then offer additional colour stickers like blue for Halaal, pink for

gluten free, etc. This will assist the consumers to know what they are purchasing simply by

looking at the stickers on the packaging.

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• Educate the consumers. The education department could include ethical consumerism in

the school curriculum as part of the Life Orientation syllabus. Also retailers can educate

their consumers with marketing and in-store point of sale information.

13. Business Case and implementation

Business Problem:

'The cost of food wastage in South Africa in 2012 was around R61.5 billion per annum and in 2016

amounts to R79.5 billion. For every 5% of wasted food that is recovered an additional 195 000 people

can be fed every day for a year. This has massive impact on the poor and indigent people in South

Africa.” 12This also affects the retailers as this food is dumped, therefore wasted.

Section 61 of the Consumer Protection Act 68 of 2008 (CPA) provides for strict liability in that each of

the producer, importer, distributor or retailer of a particular product is strictly liable for any harm

caused where that product was unsafe, had a product failure, defect or hazard or was provided with

inadequate instructions or warnings in relation to any hazard arising from or associated with the use

of the product. Each of the producers, importers, distributors and retailer of the product is jointly and

severally liable. In terms of section 61 of the CPA, consumers no longer have to prove negligence on

the part of the supplier of a product that has caused harm.

The imposition of strict liability, and the potential magnitude of damage awards and settlements

associated with foodborne illness claims, prevent or limit the amount of food donated by producers

and retailers.

Currently, there is no legislation in place to prevent food wastage by encouraging individuals and

companies to donate food.

Therefore, our recommendation is for retailers to help lobby to get the clause of section 61 of the

Consumer Protection Act changed and remove the strict no fault liability for donors.

Benefits to the general population:

• It will reduce food waste in South Africa.

• It will put South Africa on par with other first world and developing countries with regards

to the international legislative tendencies.

• It will reduce the amount of food that is dumped on landfills thereby reducing the smell

and health risks associated with this.

12

Harduth, Nastascha, 2016, Legislation Discussion Paper: Food Donations as a Mechanism to Limit Food Waste, Food Insecurity and

Malnutrition

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Benefits to poor and indigent people:

• Food that would normally be dumped, but is perfectly safe to eat, can now be given to the

poor and indigent people in South Africa.

• It will reduce the amount children suffering from malnutrition.

• It will reduce stunted growth in children.

Benefits to the Government:

• It will play a small role in achieving the goals set out in the National Development Plan

2030 by helping to eliminate poverty and reduce inequality by 2030. To achieve the

objectives of broader social security coverage, the NDP proposes a commitment "to

household food and nutrition security involving public and private-sector action".

Benefits to the environment:

• It will reduce the environmental impact of food wastage. “Every ton of food waste is

responsible for 4.5 tons of CO2 equivalent emitted to the atmosphere”13

Benefits to the economy:

• It will reduce the monetary cost of food wastage: “The cost of food wastage in South

Africa in 2012 was in the order of R61.5 billion per annum; equivalent to 2.1% of South

Africa’s gross domestic product at the time.”14

• “Taking the figure of R1 191 of food consumed within a month by a middle income earner

in 201015 (and applying an inflation increase of 42.5% over 6 years from 2010 to 2016),

for every five percent of wasted food that is recovered an additional 195 000 people can

be fed per annum.16

13

The Food We Waste,

http://collections.europarchive.org/tna/20100907111047/http:/wrap.org.uk/downloads/summary_v21.0218b6a2.5460.pdf

14 http://researchspace.csir.co.za/dspace/bitstream/10204/8367/1/Oelofse1_2014.pdf, (The Vision Zero Waste Handbook ) visited August

2016; and http://www.sciencedirect.com/science/article/pii/S0956053X13003401 (Elsevier: Waste Management 33 (2013) 2493–2500, Costs of food waste along the value chain: Evidence from South Africa)

15

http://www.sciencedirect.com/science/article/pii/S0956053X12001766 (Elsevier: Waste Management 32 (2012) 2147–2153, The costs of

household food waste in South Africa ), visited September 2016. In this paper the nutritional requirement of between 1500 and 2300 calories per person per day was taken as the norm to build the purchasing profile for high, middle and low income earners. Subject to the basic nutritional requirements referred to, based on average 2010 prices, the aggregated value of these consumption profiles was R1618 per month for high income earners, R1191 per month for middle income earners and R777 per month for low income earners.

16

R79.5 billion in food waste per annum times 5% of food recovered equals R3.975 billion, and if R3.975 billion is divided by R20,362.80

(being R1,696.90 times twelve) of food consumed per annum by a low income earner equals an additional 195,208 people fed

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Benefits to the education of children in South Africa:

• It will improve the quality of education for children suffering from malnutrition, as these

children will have a delayed start to schooling and will struggle to focus whilst in the

classroom.

• It will reduce the number of children who are going to school hungry.

• It will enable food recovery – this food can be donated to the NGOs who in turn will use it

to feed millions of children of school going age.

Benefits for the retailer:

• The retailer will receive a 10% tax incentive for all food donations.

• The retailer will earn Corporate Social Investment points for the Broad Based Black Economic

Empowerment (BBBEE) scorecard.

• The retailer will save money – the money that would have been spent paying for the food to

be dumped will no longer be necessary. This will amount to a huge savings on an annual

basis

• There is no cost to the retailer – it will not cost anything for people to talk about this issue.

Also, Werksman’s Attorneys will absorb any legal costs that might be associated with this

process.

• This is an opportunity to make a positive impact, as well as change the lives of millions of

South Africans.

The next steps:

In an effort to make this a successful endeavour it would be prudent for all retailers and stakeholder

affiliated to the W&R SETA to support the recommendations to curb food wastage in South Africa by

lobbying for the partial amendment by limiting civil and criminal liability of good-faith food donors in

the event of the donated food causing harm to its recipient.

The key stakeholders in this process will be government (who need to approve the change in

legislation), importers, manufacturers, wholesalers, retailers (who are responsible for donating the

surplus foods and NGOs (who receive the surplus food.

A committee will need to be formed to include the relevant qualified stakeholders from each

organization. Werksmans attorneys have agreed for their seminar room to be used for all round table

discussions at no cost to the retailers.

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The most critical resource required from the committee will be the time necessary to follow the

drafting of the legislation and the time that it will take for this change in legislation to be passed by

government.

The benefits to all involved, retailers, affiliated association's and the people of South Africa will far

outlive the time invested in pursuing the eradication of food wastage.

13. Conclusion

Ethical consumerism is a journey for all people in South Africa. It requires awareness and education.

Retailers can partner with the W&RSETA and have an influence on how children are educated in

schools and at home, about consumption and sustainability. The more we know, the more we can

make the necessary changes to improve how we live and how can live in the future.

After researching the topic of ethical consumerism, it is evident that although it affects every

consumer in one way or another, it can be a costly exercise for retailers to change or develop

policies to promote ethical consumerism that will be relevant to all their consumers. As our research

has shown, not all consumers are necessarily concerned about ethical consumerism.

It is, however, imperative for retailers to lobby for the approval of a new piece of legislation that will

limit any liability of donors who donate wholesome food in good faith; and/or who donate food that

may be deficient in one form or another (e.g. it has reached its best before date) to a NGO that can

test that the donated food is still wholesome and if necessary reconstitute it (where possible) prior to

distribution to the needy.

The new legislation will be in line with Good Samaritan laws that are currently in effect in other

countries like the UK, Canada, USA, Panama and Italy.

We do not want to amend section 61 of the Consumer Protection Act, as it is an important clause

that is necessary to protect consumers. This section provides for so called “no fault” liability of the

importer, manufacturer, wholesaler, and retailer of unsafe, defective, failed or hazardous goods, or

where inadequate instructions or warnings have been provided.

The new legislation will eventually have to be revised by a portfolio committee, then be presented to

parliament as a Bill, and if enacted by parliament, it will have to be approved to by the President.

This could take months if not years to happen, but unless the retailers help to lobby, this process

might not happen at all.

Oxfam has calculated that 13 million South Africans go to bed hungry every night. That is just about

twice the size of the population of the Eastern Cape, and more than 25% of the total South African

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population.17 This scenario can be changed and the lives of millions of South Africans can be

improved, not to mention the positive impact it will have on the economy and the education of

children; once children are no longer hungry, they are able to learn, as they can concentrate and

focus on what they are being taught. You can’t teach a hungry child.

17

https://www.dailymaverick.co.za/opinionista/2015-09-03-food-waste-south-africas-shameful-secret/#.WHzj7dJ97cs

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13. References

Littler, Jo. (2011). Radical Consumption: Shopping for Change in Contemporary Culture. Berkshire,

UK: Open University Press.

Payne, Jacqueline. (2012).”Ethical Consumerism and Conservatism - Hand In Glove." Heinz Voices.

The Heinz Journal, 26 January, 2012.

Pimentel, D., & Levitan, L. (1986). Pesticides: amounts applied and amounts reaching pests.

Bioscience, 36(2), 86-91.

Sarker, S. A., & Lupa, Z. S. (2016). Ethical Consumerism as a prerequisite to the development of

Eco-tourism: Evaluating Consumption Pattern of the Bangladeshi Traveler, The Cost and

Management. Vol 44 #2 (March – April 2016).

Thornton, Linda Fisher. (2012). "What Does Ethical Consumerism Mean for Business?" Leading in

Context. Leading in Context, 10 October 2010.

http://www.mytopbusinessideas.com/

Justin Smith, Group Head of Sustainability at Woolworths Holdings

Denzil Colbert, owner of Pick ‘n Pay, Lenasia

Dr. Graham Leask, Veterinary public for the Western Cape

Nastascha Harduth, Director at Werksmans Attorneys

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14. Annexures

14.1 Recognised Regulatory bodies

Country Regulator Purpose

South Africa

Foodstuffs, Cosmetics and

Disinfectants Act

Control of the sale, manufacture

and importation of foodstuff,

cosmetics and disinfectants and

to provide for incidental matters.

Food Labelling Regulations To align the regulations in SA with

new scientific evidence, current

trends and international

guidelines, close loopholes, and

enable customers to make more

informed choices

Regulations Relating to

Foodstuffs for Infants and

Young Children

Prohibit promotional practices in

respect of infant and follow-up

formulae for special dietary or

medical purposes; marketed or

otherwise represented as suitable

for infants or young children

United Kingdom

Ethical Trade Initiative An alliance of companies, trade

unions and voluntary

organisations that work in

partnership to improve the

working lives of people across the

globe who make or grow

consumer goods

Ethical Consumer

Research Association

Promotes universal human rights,

environmental sustainability, as

well as animal welfare.

USA Federal Food, Drug and

Cosmetics Act

Authorises the setting of tolerance

levels or maximum residue limits

for pesticides residues in foods.

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14.2 Consumer Questionnaires - via survey monkey and face to face

Consumer questionnaire – for research assignment

1. Do you care about the nutritional value of the food that you eat?

� � � � yes no sometimes Not sure

2. How much knowledge do you have about where your food comes from?

� � � � a lot a little none Never thought

about it

3. Do you know what ethical consumerism means?

� � � Yes no Not sure

4. Do you understand what the following terms mean? (please tick the terms you

understand)

� � � � � Organic Free Range Green GMO Carbon Footprint

5. Do you care where your food comes from? (country of origin)

� � � Yes no Not really

6. Do you care how your food is produced?

� � �

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Yes no Not really

7. Please apply a rating to the following considerations. (place rating of 1 to 5 next to each –

1 being least important and 5 being very important).

Price

Ingredients

Brand

Visual appeal

How it is produced

Where it is produced

Nutritional values

8. Which of the following is important to you when buying food? (please tick)

What chemicals and pesticides are used in the production

What hormones are found in meat and dairy products

What preservatives are added

Products are free range or organic

The antibiotics found in your meat and dairy products

Genetically engineered crops

Gender:

Female Male

Age:

Less than 25 25 - 34 35-55 More than 55

Monthly Salary:

Less than R5000 R5000 – R9 999 R10 000 – R29 000 More than R30 000

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14.3 Stakeholder Interview Form - was used for interviews with the retailers

Stakeholder Interview Form

1. The UN guidelines for consumer protection (2003) list the following

• Protection of consumers from hazards to their health and safety.

• Promotion and protection of the economic interests of consumers.

• Access to adequate information to enable consumers to make informed decisions.

• Consumer education on the environmental, social and economic impacts of their choices.

• Availability of effective consumer redress.

• Freedom to form consumer groups to present their views in decision making processes affecting them.

• Promotion of sustainable consumption patterns.

1. Is your company meeting these guidelines? and why/how?

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2. There are three stages in Ethical Consumerism:

First stage: value for money, basic product information and labelling, and consumer education to make

informed choices.

Second stage: product safety (e.g., preservatives, additives like colour) and corporate accountability.

Third stage: a marriage of environmentalism and citizenship; typically focus on (a) animal welfare (i.e. product

testing, animal cruelty, “cage-free”); (b) the environment (i.e., resource use, carbon footprint, waste); and (c)

human rights/working conditions and fair-trade.

2.1 How can retailers make it more affordable for consumers in the first stage?

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2.2 How can retailers make improvements in the second stage?

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2.3 What responsibility do retailers have for the 3rd

stage? Why?

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3. Do you think your customers care about Ethical Consumerism? Do you think it affects their buying

patterns or their spending in your store?

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4. Do you think that retailers should engage with consumers about Ethical consumerism?

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5. Do you think that retailers need to be transparent with consumers? Why?

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6. Is Fairtrade an important factor when selecting products for your store?

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7. Do you think we need any of the following to be place to encourage Ethical Consumerism?

7.1 Government mandated actions and sanctions

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7.2 Labelling and certifications (“Fair Trade,” “Organic,” “Natural,” “Vegan”)

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7.3 Consumer groups designed to monitor (“vigilante consumers”)

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7.4 Cultural and social influences (norms)

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14.4. Top 10 unethical marketing practices

i) False, exaggerated, or unverified claims

Some marketers use false statements, exaggerated benefits, or make unverifiable claims about

their offers. This is common in the weight loss industry, where marketers convince potential

buyers that a particular product can help them shed so-and-so pounds within two weeks without

exercise or dieting.

ii) Distortion of facts to mislead or confuse potential buyers

A typical example is when a food processing company claims that its products are sugar-free or

calorie-free when indeed they contain sugar or calories. Such a company is only trying to mislead

potential buyers, since they are unlikely to buy the products if it is made known that they contain

sugar or calories.

iii) Concealing dark sides or side effects of products

This unethical marketing practice is rife in the natural remedies industry, where most

manufacturers deceive potential buyers that their products have no side effects because they are

“made from natural products”. But in reality, most of these products have been found to have side

effects, especially when used over a long period. In fact, there’s no product without side effects—

it’s just that the side effects might be unknown. It has found to be better to say, “There are no

known side effects” as opposed to “there are no side effects“.

iv) Bad-mouthing rival products

Emphasizing the dark sides of a rival’s products in a bid to turn potential customers towards your

own products is another common but unethical marketing practice. Rather than resort to this bad

strategy, a retailer should emphasize on those aspects that make its offer stand out from the rest

of the pack.

v) Using women as sex symbols for advertising

It is not uncommon for even reputable brands to resort to using a half-naked lady to attract

attention to the product. While it might be intuitive to use models in adverts for beauty products

and cosmetics, having half-naked models in adverts other products not strongly related to women

is both nonsensical and unethical.

vi) Using fear tactics

Claims such as “limited-time offer”, are rife in the marketing industry and only serve to prompt the

potential buyer to make a decision on the spot.

vii) Plagiarism of marketing messages

Some business owners and salespersons engage in using the exact marketing messages of their

competitors to market their own products or services. Creativity is a huge part of marketing, and

Page | 44

using other businesses’ marketing messages just passes you off as being creatively bankrupt and

fraudulent.

viii) Exploitation

This is charging for much more than the actual value of a product or service. For marketing efforts

to remain with ethical limits; the prices of your offers must be equal to or less than the value they

give the buyer. If the value is less than the cost, it is unethical.

ix) Demeaning references to races, age, sex, or religion

Ethical marketing must be devoid of all forms of discrimination. If your marketing messages

contain lines that place people of certain age range, sex, religion, nationality, or race at a higher

level than others, then you are crossing the bounds of ethical marketing.

x) Spamming

Spamming is when unsolicited emails are sent to potential customers, encouraging them to make

purchases. This is the commonest unethical marketing practice done online. The number of time

you send such emails doesn’t matter. Whether you send them once, or on occasions, or

frequently, you remain a spammer.

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14.5 Graphs of Consumer Research

Yes No Sometimes Not sure Total

117 8 35 0 160

A lot A

little None

Never thought about it Total

49 89 12 10 160

73%

5%

22%

0%

Yes

No

Sometimes

Not sure

0% 10% 20% 30% 40% 50% 60% 70% 80%

DO YOU CARE ABOUT THE NUTRITIONAL

VALUE IN THE FOOD THAT YOU EAT?

31%

56%

8%

6%

0% 10% 20% 30% 40% 50% 60%

A lot

A little

None

Never thought about it

HOW MUCH KNOWLEDGE DO YOU HAVE

ABOUT WHERE YOUR FOOD COMES …

Page | 46

Yes No Not sure Total

110 27 23 160

Organic Free range Green GMO

Carbon Footprint

156 148 117 97 127

69%

17%

14%

0% 10% 20% 30% 40% 50% 60% 70% 80%

1

DO YOU KNOW WHAT ETHICAL

CONSUMERISM MEANS?

98%

93%

73%

61%

79%

0% 20% 40% 60% 80% 100% 120%

Organic

Free range

Green

GMO

Carbon Footprint

DO YOU UNDERSTAND WHAT THE

FOLLOWING TERMS MEAN?

Page | 47

Yes No Not Really Total

102 17 41 160

Yes No Not really Total

132 4 24 160

64%

11%

26%

Yes

No

Not Really

0% 10% 20% 30% 40% 50% 60% 70%

DO YOU CARE WHERE YOUR FOOD COMES

FROM?

Series1

83%

3%

15%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90%

Yes

No

Not really

DO YOU CARE HOW YOUR FOOD IS

PRODUCED?

Page | 48

Rank Consideration

# of respondents

(most important)

1 Ingredients 110

2 Visual apeal 94

3 Nutritional Value 90

4 Price 72

5 How It is produced 67

6 Where it is produced 61

7 Brand 44

What chemicals & pesticides are used in its production 127

What preservatives are added 126

What hormones are found in meat and dairy products 124

The antibiotics in your meat and dairy products 115

Products are free range or organic 109

Genetic engineered crops 100

44

61

67

72

90

94

110

0 20 40 60 80 100 120

Brand

How It is produced

Nutritional Value

Ingredients

WHAT IS THE MOST IMPORTANT

CONSIDERATION WHEN SHOPPING?

127

126

124

115

109

100

0 20 40 60 80 100 120 140

What chemicals & pesticides are used in its production

What preservatives are added

What hormones are found in meat and dairy products

The antibiotics in your meat and dairy products

Products are free range or organic

Genetic engineered crops

WHICH OF THE FOLLOWING IS

IMPORTANT TO YOU WHEN BUYING

FOOD?

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