1. Customer expectations and behaviour trends in regard to biodiversity preservation, social responsibility, fair trade … What strategies and practices to address these changes? Michel Gutsatz [email_address] October 14 th 2009

2. “ It is important for all of us to understand that there are a number of issues facing the world that will profoundly affect our lives and our company. I am talking to you about issues like international trade, climate change, water shortages, social and economic inequities, infrastructure and foreign oil. Wal-Mart can take a leadership role, get out in front of the future, and make a difference that is good for our business and the world. Leadership is not about looking over your shoulder and living in the past. It is about looking over the horizon and envisioning the future” Lee Scott, CEO Wal Mart, January 23 2008

4. Our framework

5. MEGA TREND 1 Growing anxiety… COMPLEXITY LONGEVITY SWINE FLU AIDS CLIMATE CHANGE POLLUTION

6. New threats: a growing concern … Risks on my health Food: conservatives and artificial flavors, allergens, trans fats,… Beauty: parabens, phtalates, etc… UV rays Quality of water Quality of air Diffusion of germs AIDS Risks on nature Global warming Cloning Risks on biodiversity Nanotechnologies Bioengineering Pollution Catastrophes September 11 and terrorism Tankers sinking: Erika – Exxon Valdez Financial crisis Tchernobyl The Asian tsunami Hurricanes (Katrina…) Uncontrollable change Unemployment Relocations and closures of sites The retroactivity of some laws New laws and rules Medias Medias

7. New sanitary threats : from AIDS to obesity Complexity of the world we live in: We do not understand Environmental risks : depletion of resources… … consumers need to be reassured Ideals disappear : find a meaning to life MEDICALISATION OF FOOD Banning GMOs COSMETICS “ WITHOUT” In search of zero risk TRANSPARENCY Make information understandable In search of references ORGANICS Natural ingredients SUSTAINABLE DEVELOPMENT Osmosis with nature In search of an ideal BRANDS w ith a meaning GREEN LIVING A positive collective ideal A CRAVE FOR REASSURANCE

12. MEGA TREND 5 The need for sensations - leading « a full rich life »

13. Emotions and feeling are a growing dimension of the new individual/consumer...

15. A NEW POSITIVE COLLECTIVE IDEAL

17. For the first time in many years a new collective positive ideal is shared globally – by executives Source: McKinsey – 3000 global executives, 2007

18. A new collective positive ideal is shared globally – by Millenials (ages 10-25)

19. A new collective positive ideal is shared globally – by consumers (UK) Source: The Cooperative Bank, Ethical Consumerism Report 2008

20. This new collective ideal is called GREEN LIVING Green Living : way beyond basic “green”, a way of life at the service of an ideal that will drive a new ethics of consumption A new positive collective ideal is back

21. The new individual is holistic & in osmosis with the planet

22. This new ideal is structured in 3 concentric circles ME My Health My beauty My emotions My well-being US My children The Planet My friends My country OTHERS Animals Third World countries Other people It all starts here…. Egoistic motives are better predictors of purchase of organic products than are altruistic motives

24. Green Living is structured along 3 levels of expectations OTHERS Ethical Trade CSR - Biodiversity “ Free range” Protection of endangered species ME Nutrition Organics Spas, Vacations US Protecting the planet Recycling Local production

25. Green Living: consumers will have different concerns and levels of involvement Source: The Hartman Group, 2007 “ Periphery” Concerned primarily by “Me” By price By convenience: accessibility & functionality Follow family advice “ Medium involvement” Concerned by “Me” & “Us” By price By their experiences By the knowledge they have of brands & products Follow expert advice LOHAS Concerned by “Me”, “ Us” & “Others” By authenticity & values By transparency By production methods By packaging Holistic vision of the world Follow peer advice

29. The last major barrier is confusion and inconsistency SUSTAINABLE RESPONSIBLE CSR

32. The Dole Organic case www.doleorganic.com

34. Education

36. Trust in business has fallen dramatically since the early 1980s (UK)

44. Many companies are actively involved in sustainable initiatives

45. .. But consumers are NOT aware of these green initiatives Source: MIT Sloane Management« The Sustainability Initiative », 2009

49. A 4-step framework The broad & « basic » stakes Public relations Compliance with regulations Capturing cost efficiencies Short Term Long Term Company specific Shared Time horizon of sustainability effort Good business practices Transparency Supply chain productivity Capturing competitive advantage Product redesign New market entry New organizational models Game-changing innovations Reframed business models Partnerships with external stakeholders

50. THANK YOU! www.michelgutsatz.com