How is inflation impacting sustainable entrepreneurs?

Inflation rates and rising energy prices are skyrocketing. Inflation in Belgium, for example, was at 10.5% in August, according to Eurostat. Who are the victims? The Belgian consumers who are having to count their pennies, but also the sustainable entrepreneurs. And at a time when society urgently needs sustainable businesses to ensure the continuity of our planet.

The sustainable retail scene for both zero-waste food and eco-friendly clothing has always had to deal with higher costs because they opt for local production, fair wages and more sustainable materials. Now rising energy prices are adding to that and making it increasingly difficult, for those already struggling, to maintain a profitable business.

In addition, where does the scale tip? Where does consumers’ willingness to pay more for sustainable products stop in the face of their decreasing purchasing power? It’s hard to say but it’s obvious that this will be bringing them closer to that tipping point.

According to a 2018 study by ABN Amro, people in the Netherlands are willing to pay up to 12% more for sustainable products compared to non-sustainable ones. Whether they are willing to pay that same amount extra on top of the general increase in prices, however, remains to be seen.

Roundtable for sustainable entrepreneurs

COSH! is very sensitive to this ominous crisis and its consequences. The sustainable fashion platform that shows consumers the way to local sustainable shops brought together its members to gauge the mood and lift spirits with positive stories.

On 6 September, several shopkeepers candidly told their stories. Maya Van Treeck from the Groene Stadshut in Antwerp, which organises sustainable workshops and previously also had a shop in the workshop space, said her business is under pressure: “If I have to focus on making a profit, the fun is gone for me, I need to be able to express my creativity.”

Niki de Schryver, the founder and CEO of COSH! agrees with Maya’s story. She feels that tensions are rising among COSH! affiliated shops due to the rising inflation. “Entrepreneurship is about overcoming fears. But what if fear of the energy crisis is too great?”

Not all concerns in sustainable retail are due to the current crisis. The covid-19 pandemic, which made shopping on physical high streets quasi-impossible for a while, is also still fresh in entrepreneurs’ memory. This second crisis is making it very difficult for entrepreneurs to hold on to their belief in a sustainable future.

Zero-waste groceries

Zero-waste supermarkets are also finding that consumers are turning back to regular supermarkets as prices go up. Alexia Coppens, the founder of OHNE, a cooperative of zero-waste shops: “Now that people are allowed out again after heavy lockdowns, sustainably produced and (non-)packaged food indoors is no longer a priority for families on tighter budgets,” she says.

Benjamin Vermeir, owner of zero-waste shop Robuust in Antwerp, notes the same trend. “The increase in energy prices is still manageable for us at the moment because we do not consume much on our shop premises. However, it is always a challenge for us to make the business financially sustainable and to be able to pay out wages.”

Alexia Coppens of OHNE says she would like to see a VAT reduction on unprocessed food products. “Highly processed food is much cheaper per kilocalorie but often a lot unhealthier. This way, people are encouraged to make unhealthy choices. Instead, VAT should be reduced for fruit and vegetables, for example. Even better, a VAT reduction for organic products would have positive effects on public health. Zero-waste shops essentially sell low-processed, healthy products.” Alexia Coppens of OHNE.

Cost increases in fashion brands’ supply chains

Johanna Adriaens, founder of Ghent-based luxury fashion brand Ida&Volta has not yet raised the prices of her clothes, even though her energy costs have quintupled and the prices of the fabrics she uses, including Belgian linen, skyrocketed.

Despite this, she is also noticing that her customers’ buying behaviour has changed. Johanna: “Fewer and fewer customers buy Ida&Volta clothes directly from us.” Shops do continue to buy Ida&Volta: “retail has the power to support local brands.” Says Johanna.

Johanna is fortunately not yet seeing her clientele trickle down. “Our target group largely still has the freedom to choose quality and sustainable, local products.”

miokoo founder Kathleen Peers, who makes reusable menstrual lingerie, also reports increasing production , packaging and processing costs.

“In our industry, it remains very important to be optimally and cost-efficiently organised,” she says. Over the coming months, she will be looking at how this can be even better at miokoo.

Saving money with sustainable purchases

Many people associate the term “sustainable” with “expensive”. In practice, however, this is not always true. For example, sustainable products will last much longer, you can repair them or refill them – be it clothes, cosmetics or food in bulk.

Entrepreneur Anne Drake saved €5000 with her family of five in a year thanks to her eco-friendly lifestyle. She has since written two sustainable lifestyle books, opened a webshop and runs workshops to make zero-waste cleaning products and cosmetics, among other things. “The ingredients to make these products yourself are very cheap.” Says Anne. You can definitely take advantage of these then this winter. Discover more environmentally-friendly as well as money-saving tips here.

Kathleen Peers of Miokoo believes the power lies in consuming. “By cleverly investing in menstrual pants, you no longer have to buy disposable products and you’ll spend less money in the long run.” For such a product to last, it must be made to last. “Quality is going to save the world,” says Kathleen.

Annelies