by Marc Gunther
February 13 2008: 9:38 AM EST
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Britain catches the foodie bug

Concerns about the environment, fair trade and health are changing the way that the U.K. eats.

By Marc Gunther, senior writer

Shoppers outside London's massive Whole Foods emporium are part of an increasingly food-conscious British public.

LONDON (Fortune) -- Walk into a London supermarket, read the label on a bag of Walker's crisps - that's what the British call potato chips - and you will learn that 75 grams of carbon dioxide were emitted when making the 34.5-gram package. What does that mean? I have no idea. Nor do most Brits.

But carbon labels on potato chips are just one sign of how food shopping is changing in the U.K. Increasingly, shoppers want to know where their food comes from, and whether it was produced in ways that are good for the planet, for farmers and workers, and even for animals.

Consider: Supermarket chains including giant Tesco, which is now expanding into the United States, and posh Marks & Spencer promise to buy from local farmers, to reduce their carbon footprint and promote recycling. Celebrity chef Jamie Oliver has provoked a national debate over the treatment of "battery chickens," meaning chickens crammed side-by-side into cages on factory farms. The British government has asked retailers to develop "eco-labels" measuring the environmental impact of what they sell.

U.S. companies are getting into the act, too. Those Walker's crisps? They're made by a unit of Pepsico, which is working with a nonprofit group called Business for Social Responsibility to study eco-labels for the U.S. market. And Whole Foods Market (WFMI, Fortune 500), the Austin, Texas-based chain, has opened a vast, three-story emporium in London that sells "products that support your values while supporting the earth."

The food industry is responding to pressures from environmentalists, consumers and British farmers of beef, sheep and pigs. Stores now promote meats and cheese made in Britain, which are shipped fewer miles, and therefore may generate fewer greenhouse gases than imported food. "It is encouraging that supermarkets are now falling over each other to paint themselves as the 'greenest', the 'most sustainable', or even the 'most responsible'," Peter Kendall, the head of Britain's National Farmers Union, said recently.

Tesco, Britain's biggest chain, is a pace-setter. It has established eight buying offices around the country to work with local farmers, who say they need higher prices to sustain local agriculture. It has set out to measure the carbon emissions created by more than 70,000 products it sells, so that shoppers compare the carbon footprint of their porridge mix or shortbread as easily as they now compare price and nutrition. The chain offers a "Green Clubcard" that rewards customers who reuse carrier bags, foregoing plastic and paper.

"The message from our customers is that they want to be empowered to make more sustainable choices," said Sir Terry Leahy, Tesco's chief executive, in the firm's latest corporate responsibility report. "They are ready for a revolution in green consumption."

Sally Uren, director of the business program at Fortune for the Future, a London NGO, says the sustainable food movement is being driven both by companies concerned about their reputations and ethically-minded shoppers. "Consumers are asking a lot of questions about organic, fair trade and climate change," Uren says. Her group works with U.S. firms including Pepsico (PEP, Fortune 500), Cargill and Pret a Manger, a chain of take-out shops in which McDonald's (MCD, Fortune 500) holds a 33% stake.

London's new Whole Foods Market is so vast that maps and guide are available. Shoppers can mix their own muesli, grind their own nut butters, or choose from 40 varieties of house-made sausage. An dining area offers a sushi bar, an oyster bar and a tapas bar. Employees wear organic cotton shirts, packaging is made of compostable sugar cane, and orders can be delivered via motor scooters powered by renewable energy.

None of this comes cheap. A chocolate brownie cost $3. Belgian fruit-flavored beers are priced at $6 a bottle. An organic whole chicken cost an eye-popping $28, perhaps because it was well treated very well before being slaughtered. Whole Foods has an "Animal Welfare Rating Programme" that allows shoppers to "easily understand how the meats they are buying were raised and treated."

Not surprisingly, all this fussiness over food has prompted a backlash. When Jamie Oliver and Hugh Fearnley-Whittingstall, another TV chef, got teary-eyed over the fate of ill-treated poultry, and urged shoppers to spend more money for chickens that have lived better-quality lives, one newspaper columnist told the millionaire chefs to "bite hard on a lemon and get over it."

"Poor little emoting boy chickies!" wrote Jan Moir in the Daily Telegraph. "When human beings have to live in high-rise coops and patients in hospitals are crammed into mixed-sex wards, I can't get too upset over the quality of life of our nation's poultry, even if Jamie Oliver is howling into his hankie over the fate of Hetty Hen."

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