Macro factors and local variations

Sustainability matters have become increasingly important in the retail trade. For the grocery sector, this means increased demand for ethical and organic food, and greater awareness among customers regarding where food comes from and how it is produced.

ICA Gruppen operates in five very different markets; as a result, sustainability priorities vary between these markets. The differences present ICA with both challenges and opportunities. Maintaining a global, national and local perspective simultaneously allows changes to be made in the different markets while joint solutions are found at Group level. Priorities are based on ICA’s Good Business and the three key words of transparency, credibility and traceability.

ICA’s Good Business and the associated policies are shared by the entire Group and there are many similarities between the markets. One common denominator is that customers in all the countries are interested in locally produced food. In addition, customers in all ICA’s markets appreciate openness and honesty from retailers on sustainability matters.

ICA deals with the challenges that exist by working in a structured way on sustainability throughout the value chain and reporting quarterly on the Group’s sustainability work. For a further description of this, see Risks and opportunities.

Outside factors affect ICA

ICA also has to adapt to changes in the world around it. The business is affected by factors such as climate change, a growing population and international financial crises.

Climate change – Climate change and the over-exploitation of natural resources mean that there is a risk that many of the earth’s resources could run out or shift geographically, making it necessary to find alternatives to today’s products, production methods and sourcing structures. It is in the interests of the industry to ensure that raw materials and natural resources remain available in the future.

Population growth – The UN estimates that the world’s population will increase by one billion over the coming twelve years, reaching 8.1 billion in 2025. It is expected to increase by a further 1.5 billion in the subsequent 25 years, with the result that the global population is expected to reach 9.6 billion in 2050.

A global population increase of 2–3 billion in the coming 40 years represents an expected 70% increase in demand for food, according to UN-Water. This also places increased demands on natural resources such as water, land and energy.

Greater awareness among consumers – Increased awareness among customers concerning the choices they make as regards products and services is placing greater demands on the retail trade. Customers today are more aware of sustainability issues and are increasingly demanding greater traceability and better working conditions in production.

Globalisation – Increased globalisation means that events in other countries and on markets other than the home market have a greater impact. The recent international financial crises affected all the world’s markets.

A global market also imposes higher requirements – for example, as regards sourcing from producers in other countries.

Conflicts and unrest in the world also affect the grocery trade and the supply of products.


Local variation between markets

ICA’s sustainability work has a common foundation, but local variations in the markets where ICA operates affect how the work is actually done. There are several reasons for this.

Different markets: ICA Sweden is the leader in a mature market. In Norway, on the other hand, ICA Norway is working hard to turn around a negative long-term trend. In Estonia, Latvia and Lithuania, Rimi Baltic has a strong position in a market that has recovered quickly after previous financial crisis.

Differences in customer behaviour: Customer preferences tend to differ. In the Baltic countries, food prices are a critical issue – particularly since the recession. Swedish consumers are more interested in added value as organic, ethical, health and origin, while value for money is still important.

Differences in public opinion: Different topics garner different responses depending on local opinions in the country. In Sweden the major concerns are food waste, additives and greenhouse gas emissions. Norway has also seen growing awareness of the problem of food waste. Many Norwegians are interested in healthy living and nutrition, which is also a growing trend in the other countries. In the Baltic countries the main considerations and concerns are genetically modified food, locally produced food and littering.