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Ecolabels
such as organic marks have many different functions, and different functions
for different actors. One main function is that it can communicate a rather
complex reality in a very simple way. To talk with economists, an organic mark
reduces transaction costs and information costs. Hundreds of different rules as
well as a whole system of verification are communicated through just one
symbol, a mark.
This
encapsulates both the strength and a weakness of the system. It is an enormous
strength to be able to convey so much meaning with just one symbol. Producers
and companies can get simple access to this meaning, this value, just by
adhering to the requirements and by paying a modest fee. Compare that with the
costs and efforts involved in building up your own trade mark and it is easy to
understand why they are attractive for many, in particular for smaller
producers who have not the muscle to create such an image through advertising.
But the same is also a weakness. Initially, it is in the interest of all actors
to increase the use of an ecolabel. For the labelling system itself the
benefits are obvious; they are both judged as successful and earn more money
with a greater uptake. For companies, it means that more consumers will be
aware of it. So it is a win for all companies having products with the mark. And
consumers will have more to chose from.
But after
that initial coherence, things are less harmonious. In a competitive market
place there is diminishing return of the use of an eco label, for a company,
the more products that carry it. Even consumers seem to react the same, or at
least parts of them. Once an alternative mark, such as organic, become common
and widespread it inevitably loses some of its hip factor, or its character of
being “alternative” or a challenge to the prevailing.
Farmers
and food processors that have had direct consumer relationship have mostly seen
less added value in the use of an organic mark and being certified; direct contact
with consumers serve more or less the same trust-building purpose. New
technologies are rapidly filling similar functions. With QR codes a lot of
information can be carried to the consumers, and through mobile phones they can
get a wealth of information directly from the producer.
Even smaller producers
can in this way communicate directly with consumers and give their products a
distinctive face. Through webcams mounted in the stable of dairy farmers,
people can see how farmers are managing their cows and their off spring.
Through internet services, consumers can rapidly compare products against set
criteria. And such rankings can also be compiled in services comparable to
Tripadvisor. Finally, social communities on the web are increasingly “helping”
people with similar preferences to find matching products. Algorithms of the
kinds used by Google and Facebook know more about your preferences than
yourself!
Quite
soon we might have an increase both in producer-own and consumer-own standards,
i.e. each can specify their criteria according to hundreds of parameters, and
they can be matched against each other. In this way there is no need to develop
special schemes for vegans who wants halal, organic, climate-friendly and
fairly traded products, or those who wants organic products to also be totally
free from additives. In a way, it represents more consumer power and more
choice. This development is a threat for standard setters and mark owners. It
also diminishes the relevance of organic regulations. For sure, it is too early
to count out the organic marks and organic regulations. They are likely to
continue to exist, but gradually be moved from the front of the pack to the
back. For certification bodies, there might still be a future in the
verification of claims or in the provision of systems for such verification.
However, it is perhaps more likely that novel solutions will be developed by
other parties than certification bodies stuck in old paradigms.
Published as the Leader # 130 of The Organic Standard
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