Adding values

Live8 and the G8 summit have seen an unprecedented level of pressure on the world's leaders for social change. Chris Brook-Carter wonders how this will affect the drinks industry as it markets to a new, ethically-motivated youth.

Not since the 1960s has Europe's youth appeared quite as keen to be involved in ethical and social change as today. The swathes of teenagers sporting charity bands around their wrists, the huge interest in and sheer scale of last weekend's Live8 concerts, and the popular pressure mounting on G8 leaders to act on climate change and poverty are evidence of that. Aren't they?

Whether it is fox hunting in the UK or the Iraq War in Italy and France, the days of Generation X - characterised by political and social apathy - are long gone, it seems. Today, young adult consumers (18-24 year olds), particularly in Europe, are increasingly viewed as being anti-branding, anti-capitalist and issue-led.

It was interesting, then, that during the weekend of Live8, probably the largest collective call for change the world has ever seen, a report from industry analyst Datamonitor warned consumer goods companies to take this seemingly powerful drive towards ethical consumerism with a large pinch of salt. In short, Datamonitor's latest research claims that there is a huge discrepancy between what young adults do, and what they claim to do.

"Young Adults claim they care about ethical causes, and don't buy brands to look cool," said John Band, consumer market analyst at Datamonitor and author of the report. "On the contrary, they are actually reluctant to spend money on ethical products and are far more motivated by branding than the population as a whole. The only area that they seem to be consistent in is going out and making themselves look good."

This is no small matter. Datamonitor estimates that Europe's young adults have a combined annual spend in the region of €287bn. It also believes that those that regard young adults as a core market have even embarked on changing their corporate behaviour in a bid to capture a portion of that spend.

But Datamonitor's survey of 3,200 consumers across France, Germany, Holland, Italy, Spain, Sweden, the UK and the US found that European young adults are 7.5% less likely than people in general to say that it is important to choose brands that match their attitudes and outlook on life.

Furthermore, according to Datamonitor's survey, when asked if they would be willing to pay extra, European young adults appear less likely than the population as a whole to be willing to pay higher prices for ethically-produced goods (14.6% less likely), or for environmentally-friendly energy products (3.6% less likely in Europe).

"There's a problem in marketing ethical products and services to young people," says Band. "Most ethical products, although worthy, are rarely particularly cutting-edge or cool." For example, organic produce is associated strongly with middle-aged, middle-to-high-income consumers, and packaged organic products also tend to be targeted at these specific consumer groups.

Should drinks companies therefore eschew moral issues altogether when marketing to youth, and, in ignoring what they say on ethics, ultimately give them what they want - brands with cool credibility?

There is certainly plenty of evidence to suggest this should be the case. The world's largest drinks brand, Coca-Cola, has had a shocking time of late in the media for its ethical track record. It has stood accused of human rights violations in Colombia and environmental crimes in India. However, there is no sign whatsoever that, as a result, its reputation has suffered amongst the young adult populations of Western Europe to any significant extent.

In alcohol, brands such as WKD and Smirnoff Ice are purposefully marketed from a politically incorrect base. "Clear as your conscience", Smirnoff Ice cheekily states, while WKD panders to consumers' "WKD side". Certainly there is no suggestion that young consumers are after anything more homespun.

All that said, however, it was interesting to see statistics from another consumer research group, the ID Factor, that showed that nearly half of today's consumers admit to buying from companies despite having doubts about their ethics.

Apparently, this is primarily because they believe they have few alternatives.
The survey said that "functional" factors such as quality, price and convenience still dominate, but consumers would rather make purchase decisions based on corporate reputation. The problem, though, was that many consumers still believed that "all companies are the same."

This poses the question of whether young adults choose not to spend ethically because they are being offered no real choice in the marketplace.

If a drinks brand could harness the momentum surrounding ethical causes whilst maintaining brand credibility with the young - while keeping all other factors such as price and convenience equal - could it make an impact in the market? The niche success and publicity that surrounded the launch of "Islamic Cola" brands, such as Mecca Cola, in France and the UK during the height of the Middle East's troubles suggests it is a route at least worth investigating.

Where marketers need to be wary, however, is in distinguishing between a genuine change in priorities among the young and a shift in fashion. It may be an unfairly cynical view to take but young consumers might be as shallow and fashion-led as ever but ethical causes are now hip, and they are simply following the trend.

But even if this is the case drinks companies have surely been slow off the mark. That may be no bad thing, however, given the potential pitfalls in getting an ethical marketing message wrong. Before jumping on any bandwagon it is worth making sure that it's really going somewhere and jumping on this bandwagon could be a high-risk game. "A man who moralises is usually a hypocrite," Oscar Wilde once said. If drinks companies are to harness what is, without doubt, a powerful movement, then it must be worth bearing those words in mind.

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