2016: The Year Business Goes Sustainable

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Professor Fred Lemke (pictured left) is Chair in Marketing and Sustainability at Newcastle University Business School. Professor Henry Petersen (right) is Assistant Professor of Strategy and Sustainability at University of Wisconsin, La Crosse, USA. They write for Blue & Green.

Traditionally, companies have focussed on achieving growth by selling more products to more customers. This business model has fuelled the returns demanded by shareholders, and it has worked well, while consumers have been more concerned with price than quality.

However, the focus on price and the pressure to reduce costs has created a downward spiral in quality and, in some instances, ethics. Recent scandals have prompted consumers to reconsider their preferences. Take the 2014 UK poultry dilemma as an example: customers enjoyed the lower prices until they learned that unhealthy poultry, travelling across a number of countries, avoided safety standards before ending up on the shelves for an unreasonably low price.

Consumers are also troubled that wealthy nations are flourishing at the expense of underdeveloped nations, and with little regard for nature. Customers are becoming increasingly concerned with their impact on the environment. They want to know more about the products they buy and where they come from.

2016 will be an interesting year for consumers and a challenging year for organisations. As the old saying goes “the bitterness of poor quality remains long, after the sweetness of low price is forgotten”.

This year’s 10 business trends are:

  1. 2016 will be the year when sustainable marketing will go mainstream, and businesses will devote more effort on understanding what customers are looking for in sustainable products.
  1. Businesses will begin to move away from profit by overconsumption (i.e. selling more and more of the same) and instead brands will market themselves philosophically as creating value for society. There will be an increase in partnerships as businesses work with other organisations that share their values.
  1. It will be a new era with marketing coming into its own through fundamental customer experiences and businesses will work with consumers to co-create sustainable value.
  1. Within the food sector, consumers will become more health orientated and expect to know where food comes from; vegetarian and vegan friendly brands will gain prominence due to promotion of the environmental benefits of low-meat diets.
  1. The supply chain will become a key business concern as brands see the reputational impact of supply chain partner behaviours.
  1. Transparent supply chains that adopt sustainability practices from start to finish will become the rule not the exception. Recycling will move up the supply chain, with UK businesses likely to follow the German example of recycling being conducted at the retailer stage so customers can simply leave packaging at the site.
  1. CSR will continue to trend as businesses recognise their role within society and adopt more creative means of generating wealth while also addressing societal problems.
  1. New technologies will surge ahead, in particular the clean tech sector, despite low oil prices.
  1. In this ever-advancing technological age, sustainable communities and cities will become a hot topic as more individuals rely on social sharing.
  1. Ultimately, this year significant numbers of consumers will start to vote with their feet and focus on businesses that offer truly sustainable products and experiences.