Academic research has consistently identified this gap between purchase intentions and behaviours. This figure is even higher for millennials (73%) and Generation Z (72%). The Generational Gap: Younger consumers are more actively taking steps towards being more sustainable. And its no longer just wealthy suburbanites in major markets willing to open their wallets for sustainable offerings. In 2014, 65% of total sales of consumer goods measured globally were generated by brands whose marketing conveyed commitment to social and/or environmental value. You need a Statista Account for unlimited access. A 2014 Nielsen study found that 55 percent of global consumers are so passionate about the planet and its people that they're willing to pay more for products and services provided by. The survey reports that 58% of Europeans consider climate impact . This isn't a pipe dream. Products with a sustainability claim have continued to drive growth amid the pandemic, according to a new report from IRI and the NYU Stern Center for Sustainable Business. Companies across industries have . According to market research firm Nielsen, just 22% of the world's consumers were willing to pay more for an eco-friendly product in 2011, despite the fact 83% thought it was important. michele@greenprintcorp.com Topping the list of sustainability factors that influence purchasing for nearly two-of-three (62%) consumers globally: brand trust. Using multiple communication methods is important to demonstrate good deeds, such as third-party validation (news coverage), annual reports, affiliation with a respected non-profit or civic organization, employee volunteerism, advertising, or reporting actual work in the community on a web site. We assessed third-party certification, such as USDA organic and Fair Trade, and the packagings claims about undesirable traits (such as genetically modified, BPA, parabens, antibiotics, growth hormones) and positive characteristics (local, grass-fed, compostable, animal crueltyfree). A fresh one is out from McKinsey & Company and Nielsen IQ - and the punchline is that making and Facebook: quarterly number of MAU (monthly active users) worldwide 2008-2022, Quarterly smartphone market share worldwide by vendor 2009-2022, Number of apps available in leading app stores Q3 2022, Research expert covering e-commerce and FMCG in Greater China, Profit from additional features with an Employee Account. We used clothing brand Reformation as a case study of sorts and spoke with experts in consumer behavior and the fashion industry to better understand the sustainability movement, why consumers love it, and how more brands can do their part. For this reason, the demand for sustainable foods is growing in the market. But nearly 60% are unwilling to pay more money for that eco-friendly product.. Original survey question: How much of a premium are you willing to pay for green consumption (i.e. Companies that are able to navigate the business of sustainability will be best positioned for future success.. The Global Sustainability Study 2021*, conducted by global strategy and pricing consultancy Simon-Kucher & Partners, reveals significant global paradigm shifts in how consumers view sustainability and the associated generational differences in willingness to pay for sustainable products and services. Michele Koch The rise in the percentage of respondents under 20, also known as Generation Z, who are willing to pay more was equally strongfrom 55% of total respondents in 2014 to 72% in 2015. In fact, an analysis of retail sales data indicated that natural products were seeing growth in otherwise declining categories. Many sustainable trends in new markets start with beauty and personal care. According to a recent survey, 73% of Gen Zers are willing to pay more for sustainable products. Millennials are the most willing to pay extra for sustainable offeringsalmost three-out-of-four respondents (73%), up from approximately half in 2014. statistic alerts) please log in with your personal account. More demand would mean more production and lower unit price costs. We help our clients achieve growth and profit targets by applying practical, evidence-based strategies. Nearly three . Millennials and Gen Z are becoming a force to be reckoned with as they continue to represent a larger share of the consumer demographic. An international study of 20,000 customers by grocery brand giant Unilever identified one in three (33%) people were choosing to buy from brands they believe are doing environmental good. Directly accessible data for 170 industries from 50 countries and over 1 million facts: Get quick analyses with our professional research service. 315-409-9435 Products that had a sustainability claim on-pack accounted for 16.6% of the market in 2018, up from 14.3% in 2013, and delivered nearly $114 billion in sales, up 29% from 2013. But the results should be interpreted cautiously. Broadcasting sustainability would capture an untapped consumer base but also sow distrust, said Pete Davis, CEO and Co-Founder of GreenPrint. Statista. Conveying CSR efforts to Millennials requires authenticity, and a unique approach as Millennials grew up with the Internet and want their voices heard. Companies should be aware that consumers are increasingly voting with their dollars against unsustainable brands. In 2014, less than 30 . Nudge theory is used to understand how people think, make decisions and behave. Given the evidence that consumer tastes are changing, an attitude of Why mess with a recipe that has worked well over the last 40 years? is the wrong one to take. Fifty percent of global consumers are willing to pay more for goods and services from companies that have implemented programs to give back to society, according to a new study from Nielsen. While companies are increasingly using environmental claims to appeal to consumers, they also attract greater scrutiny. Good Environmental Choice Australia is a similar organisation. The study also found a large degree of mistrust about companies environmental claims. Consumers' demand for sustainable products is increasing. Consumers from 60 countries were surveyed for this report. World Economic Forum articles may be republished in accordance with the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International Public License, and in accordance with our Terms of Use. Nielsen, an S&P 500 company, has operations in over 100 countries that cover more than 90% of the worlds population. Nature is worth $44 trillion to the global economy, according to a recent World Economic Forum estimate. Consumers expect more than ever from the brands they buy and increasingly are rewarding companies whose services and products are both good for them and good for society. This conventional wisdom has been used by many brands as justification for not making their products more sustainable. 75% of Millennials are willing to pay more for an environmentally sustainable product, compared to 63% of Gen Z, 64% of Gen X, and 57% of Boomers. While attitudes vary across generations, countries, and industries, 85% of consumers have become greener in their purchasing in recent years. I dream of a world in which all factory farms are destroyed. As economists say, as price lowers, our willingness and ability to buy an item increase. . Most important,. This sum will continue to grow exponentially as more Millennials reach peak buying power. Some more takeaways on consumer habits: More than 8 in 10 recycle and replace lightbulbs with energy-efficient options. People want to feel that whatever they are buying aligns with their personal values. For years, brand managers have groused that while consumers say they intend to buy sustainable products, in store they dont actually purchase them. By 2021, consumers are expected to spend $150 billion on sustainable goods. 2015 Nielsen Global Corporate Sustainability Report, 2015 Cone Communications Millennial CSR Study. Products and services that are offered from socially responsible companies may be able to charge more, according to a report by Nielsen. Simon-Kucher & Partners, Strategy & Marketing Consultants: Simon-Kucher & Partners is a global consulting firm specializing in TopLine Power. It is no secret that companies must be responsive to customer demands and expectations if they want to survive. Prosek Partners Show publisher information To use individual functions (e.g., mark statistics as favourites, set You can only download this statistic as a Premium user. And according to Nielsen, I'm not alone in that. This creates both future challenges and opportunities for all companies as the world becomes more sustainable. Shoppers once selected grocery products based simply on price or brand, but now attributes such as climate-friendly or eco-friendly are part of the consideration. Are consumers really willing to pay more for sustainable products? 470-788-0718 Percentage points exceeding 100 percent are probably due to rounding. IRIs data comes from bar scan codes at retail checkout in food, drug, dollar, and mass merchandisers. But brands can nudge consumers towards more eco-friendly products. Environmental Choice New Zealand is the official environmental label body that awards certificates and lists environmentally friendly products for green homes or businesses. You can unsubscribe at any time using the link in our emails. When it comes to sales intent, commitment to the environment has the power to sway product purchase for 45% of consumers surveyed. Get full access to all features within our Business Solutions. Please create an employee account to be able to mark statistics as favorites. In the past year alone, sales of consumer goods from brands with a demonstrated commitment to sustainability have grown more than 4% globally, while those without grew less than 1%. Even toys can get the climate-friendly treatment. They found that: 61% of consumers would be willing to pay more for eco-friendly DIY products. From there, it becomes more specific and fragmented. All rights reserved. Im seeing quite a few climate-friendly products at the supermarket. This may give competitors of all sizes, the opportunity to build trust with the predominantly young, socially- conscious consumer looking for products that align with their values.. All Rights Reserved. Consumers are voting with their dollars against unsustainable brands. 2023 Nielsen Consumer LLC. To a certain degree, products that need to have a higher degree of efficacy (such as laundry care and sanitary napkins) were more likely to have a lower share of sustainability-marketed products, perhaps because consumers are concerned about performance trade-offs. tel. In 2018, that number had risen to about 85% . I don't want to support companies that don't care about how the animals and/or workers are treated, and I do want to support those that do. The relative importance of sustainability during the purchase process will continue to increase. They wanted to know more about what influences how people feel about brands, and how those feelings impact buying behavior. The latest IAG New Zealand Ipsos poll found almost four out of five people (79%) say climate change is an important issue for them, the same number as last years poll. Corporate leadership should no longer give brand managers a pass when they claim that there is no demand for sustainable products. While the demand for such products remains low, the price remains high. I don't dream of a world full of cheap lip gloss that was tested on animals; I dream of one in which that kind of beauty product is illegal everywhere, period. Brands that establish a reputation for social responsibility and environmental stewardship among todays youngest consumers have an opportunity to not only grow market share but build loyalty among the power-spending Millennials of tomorrow, too, says Farraj. The first-ever edition of the companys Business of Sustainability Index found that nearly two-thirds (64%) of Americans are willing to pay more for sustainable products but most (74%) dont know how to identify them. Businesses must adapt to the times as consumers . A willingness to pay more for "sustainable" products. Its hard to ignore the siren call to protect the planet. While attitudes towards sustainability vary between generations, they also vary across countries -- when looking at consumers who have either made significant changes to their purchasing behavior or completely changed their way of living to be more sustainable, Austria leads the way (42 percent), followed by Italy (41 percent), Spain (35 percent) and Germany (34 percent). For additional market-level insights, read or Unpacking the Sustainability Landscape report. Attitudes towards sustainability also vary by industry when measuring its importance as a purchase criterion, from 74 percent in Energy/utilities to 44 percent in Financial services. Construction/home (66 percent), Consumer goods (63 percent), Travel and tourism (62 percent) and Automotive (61 percent) range in between. Are consumers willing to pay more for these? Concerned about allegations of greenwashing claiming a product is green when its not many brands are turning to organisations such as Climate Neutral, Foundation Myclimate and members of the Global Ecolabelling Network to legitimise their claims. Among the 66% of global respondents willing to pay more, over 50% of them are influenced by key sustainability factors, such as a product being made from fresh, natural and/or organic ingredients (69%), a company being environmentally friendly (58%), and company being known for its commitment to social value (56%); sales and coupons didnt even make the top five. This is the result of a representative survey that we commissioned from INNOFACT. : (617) 231-4551 Most important, products marketed as sustainable grew 5.6 times faster than those that were not. Brands that actively reinforce societal commitment must amplify and socialize their message using multiple sources and distribution channels. January 18, 2023. This is especially true for Millennials. While the survey respondents were answering questions . 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