4 Ways the Growing Vote-with-Your-Dollar Culture is Affecting Sustainable Ag Businesses
April 24, 2012 | Ro Kumar
The following is a guest post from Ro Kumar, the founder of LocalBlu—a blog covering urban farming and sustainability. Based in the Bay Area at UC Berkeley and Stanford, Ro is a passionate advocate for a cleaner planet with healthier people. Subscribe to Ro’s updates.
“We have to vote with our votes as well as our food dollars,” says leading food author, Michael Pollan. His words echo the sentiment of a growing number of consumers who are ‘dollar voting’— meaning they are using the power of their purchases to influence which companies continue to thrive in the marketplace. For example, a purchase of organic produce could be considered a vote in favor of organic farming (or a vote against chemical farming).
We can see that this movement is becoming more prominent simply by looking at the new types of businesses that are emerging. The dichotomy between for-profit businesses and not-for-profit NGOs has been blurred by the emergence of hybrid, socially-conscious, for-profit businesses. These entities combine the social and environmental goals of NGOs with the self-sustaining growth models of profitable companies. We once supported non-profits with our donations, but an increasing trend is to ‘vote’ for socially responsible for-profit companies with our dollars.
The growth of vote-with-your-dollar culture is especially relevant for businesses in the organic and sustainable agriculture industries because they deal with a particularly conscious and principled customer—the type of customer that takes the extra time to read ingredient labels and research a company’s background. As these consumers begin to place more importance on things like ethical business practices or high-quality ingredients, companies (especially startups) that want to stay afloat have to keep pace.
Here are 4 important ways that the growing ‘vote-with-your-dollar culture’ is affecting the sustainable agriculture industry:
- A Greater Focus on Beyond Organic. As the word Organic continues to blend into the mainstream, consumers at the forefront of the food movement are demanding food that stays more true to the core principles of sustainable agriculture. These consumers are voting with their dollars for food that is Beyond Organic. For example, food that is organic and also locally grown is beginning to come to the fore in a big way. Along with this, a greater focus on “knowing the farm” is developing. This year at the Natural Products Expo, some upcoming food products featured the farms from which each ingredient was sourced on the packaging label.
- The Rise of B-Corporations and Third-Party Certifications. Consumers want to see that extra bit of assurance that the company they are buying from has been evaluated. Look around the supermarket these days and you’ll notice that third party certification is a growing trend. More and more companies are being certified as B-Corporations, meaning they meet certain standards for social, environmental, and legal accountability. There are also certifications for biodegradable, compostable, fair trade, biobased, and of course organic products. Certifications like these have emerged because they build trust and help companies garner more dollar votes.
- More Social and Environmental Responsibility. Businesses are now competing for dollar votes by trying to behave better and do more “good.” Although we have to be wary of clever marketing jargon, we’re seeing increased percentages of profits given to charity, use of more sustainable farming practices, use of more sustainable manufacturing methods, use of more eco-friendly inputs, and more attention being paid to biodegradability and cradle-to-cradle products.
- New Socially-Conscious Business Models. More companies are figuring out innovative ways to build social responsibility into the their business model to present customers with a strong incentive to ‘dollar vote’ for them. Perhaps the best example of this is Back to the Roots, a company that sells grow-at-home mushroom kits made from recycled coffee grounds. Back to the Roots presents consumers with a unique selling proposition by offering a product that grows gourmet oyster mushrooms from a material that was previously discarded as waste. Models like these let consumers vote for a clean environment and healthy food with their dollars.