SEAFOOD.COM NEWS [EDITORIAL COMMENT from Seafood.com News] by John Sackton - May 12, 2008 - New research on how consumers reward sustainability and ethical behavior has some very interesting implications for the seafood industry.
The Wall St. Journal set out to determine whether consumers will pay a premium for products produced in a sustainable, environmentally responsible manner. The premise that consumers will reward this behavior underlies the entire sustainable seafood movement from the Marine Stewardship Council to the Monterey Bay Aquarium and many others.
The research shows some surprising results -- that tend to strongly support the seafood industry's approach to sustainability, rather than the all or nothing approach of many NGO's.
More importantly, the research shows that while consumers will reward sustainability, they will punish unethical behavior even more.
First, the positive news for the seafood industry.
The Wall St. Journal story Does Being Ethical Pay? set up several social science experiments to estimate how much of a premium, if any, consumers would pay for products that were produced sustainably. The researchers used coffee and T-shirts as their test products.
They recruited a group of random adult coffee drinkers, and gave them information about a brand not sold in the U.S. 'After reading about the company and its coffee, the people told us the price they were willing to pay on an 11-point scale, from $5 to $15. The results? The mean price for the ethical group ($9.71 per pound) was significantly higher than that of the control group ($8.31) or the unethical group ($5.89).
Translated into percent, the mean price for those who understood the coffee was sustainably produced was 17% higher than a control group who had no information. For those who were told negative things about the brand, in terms of ethics, the mean price was 29% lower than the control.
The Journal than designed a follow up test. The recruited a group of subjects to purchase T-shirts, made with 100% organic, 50% organic, and 25% organic cotton, or with no organic cotton.
The results were
100% organic cotton . . . . . . . $21.21
50% organic cotton . . . . . . . . 20.44
25% organic cotton . . . . . . . . 20.72
Unethical behavior* . . . . . . . 17.33
Control (no information) . . . . 20.04
The researchers concluded that the premium consumers were willing to pay for a sustainable product was a matter of degree, not a simple yes or no. This suggests that for the seafood industry, there is a real benefit in the industry's approach of moving towards sustainability across a wide range of seafood products. It means that as the number of seafood products responsibly harvested grows, the industry as a whole can reap the benefits of being sustainable in the consumers mind.
What the research also suggests is that attacks on the industry, such as the Greenpeace effort to force supermarkets to remove certain fish from their stores based on sustainability criteria, does not resonate with consumers, since they are concerned about the overall direction of movement - not whether all products in a store meet 100% of one group's criteria or not.
The other part of this experiment provides a clear warning sign for seafood.
Although the industry has made great strides on increasing the amount of sustainably sourced seafood, both wild and farmed, the integrity of many seafood products has been slipping.
Although NFI began a campaign against illegal activities such as short weights, mis-labeling, and illegal product substitution, such practices continue to be rampant in our industry.
Some of the NFI members who have committed to 100% net weight have lost substantial business to less scrupulous operators.
Many consumers do not know how seafood is treated to keep it moist and fresh looking - whether through added brine or protein from drip loss or from treatment with carbon monoxide.
The same consumers who reward the seafood industry for moving towards more sustainable products would punish it severely if the industry was seen to be unethical, by cheating on product additives, treatments, weights and species substitution.
The Wall St. Journal test shows that when unethical behavior is publicized and known to consumers, they react very negatively and the value they are willing to pay for products in these circumstances drops drastically.
At the moment, the industry is on the positive side of the ledger. But there is a line not too far from present industry practices where consumers would punish the industry severely by turning away and devaluing products.
The recent attempt to tie illegal labor practices to the shrimp industry in Thailand and Bangladesh largely flopped, since there was no public evidence to back up the claims except for a Thai government raid on a single factory, and as a result, the story lacked legs. Furthermore, the shrimp exporting factories in
Thailand do meet national labor standards and are reviewed on their compliance.
In a different circumstance - such as the melamine in pet food scandal -- a story of unethical behavior could severely damage the industry.
To see the extent of the damage being risked, simply look at the value of the made in China brand for seafood products since the melamine scandal broke. In this case, unethical behavior on the part of a Chinese manufacturer was amplified by domestic critics opposed to the Chinese industry.
If the seafood industry had a similar lapse that exposed real harm, and its NGO critics took up the fight, the entire industry in the U.S could suffer the same fate as Chinese origin products.
Every company with a brand in the industry, or a large volume producer, should be terrified that unethical behavior by a competitor, supplier or co-packer could blow up the reputation of the entire industry.
Seafood is by and large riding a wave of popularity, and the effort of the NGO's to promote sustainable fishing and the industry's response have increased this popularity, not hurt it. But the Journal study has a timely warning: the same consumers that have driven the growth in seafood popularity could turn on the industry in a heart beat if they felt widespread unethical practices were rampant.
Today, can we honestly tell them they are not?