Pod 1 - Nudging consumers to do good, Swedish style

How Systembolaget reaches ecological targets

Visiting Systembolaget’s impeccably displayed shops recently in Stockholm reminded me of how peaceful it is not to be bombarded with promotion and discount signs. It also reminded me of how important in-store organisation and displays are for shaping consumers’ buying preferences.

Systembolaget is government controlled and is the only retail store licenced to sell alcoholic beverages in Sweden. This monopoly status allows it to both listen carefully to what consumers want, but also to impact consumer preferences based on their own strategy and objectives.

One of the targets is to expand their organic, fairtrade and alcohol-free range. More precisely, Systembolaget wants sales of organic products to comprise 10 per cent of total sales by 2020, a target which has already been surpassed five years in advance for the wine category as the Head of Category Management Ulf Sjödin MW told me during my visit.

With the organic category struggling in other markets, how did Systembolaget achieve this ambitious goal? Is it just down to the fact that Swedes are more environmentally minded than their fellow drinkers in other countries?

The latter could be true, but it cannot be the only cause. Visiting Systembolaget reminded me of the excellent book by Thaler and Sunstein titled “Nudge: Improving Decisions about Health, Wealth and Happiness” where the authors argue the importance of context and displays. As in the book, during this visit I noticed that the first area you see when entering the shop is the organic section (alongside the other category they want to grow: alcohol-free wines). This prime positioning has three effects:

1- Raising awareness: having organic wines by the store door allows consumers to get used to the concept

2- Normalising consumption: as opposed to in other markets, where organic wines are almost hidden in a corner or sold at different channels altogether and having them prominently displayed as ‘signals of normality’ so they are not seen as niche, but on par with any other choice in the shop

3- Facilitating choice: the third main benefit of the display is that they are more likely to be chosen just because they are easier to pick; imagine being in a hurry and picking the first wine you find (and in Sweden this wine might very well be organic)

This focus on what may be considered to be a niche categories doesn’t seem to be harming total wine growth in Sweden either, as consumption has been growing at a healthy 2% per year since 2009 (Source: The IWSR 2014).

Author: Juan Park

Email: Juan@wineintelligence.com