Businesses must adapt to the times as consumers . That's why we're seeing a shift towards sustainable farming, farm-to-table, and organic botanical ingredients.". 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. This isn't a pipe dream. Nature is worth $44 trillion to the global economy, according to a recent World Economic Forum estimate. Reports such as Nielsen Insights suggest the majority (73%) of consumers would change their consumption habits to reduce their impact on the environment, and almost half (46%) would switch to environmentally friendly products. To ensure the most secure and best overall experience on our website we recommend the latest versions of, Internet Explorer is no longer supported. A 2015 global survey by Nielsen found that 66 per cent of respondents were willing to pay more for sustainable goods. The survey was fielded from February 15 to February 16, 2021 among a demographically balanced nationally representative sample of 1,017 U.S. adults 18 years of age and older. In fact, an analysis of retail sales data indicated that natural products were seeing growth in otherwise declining categories. statistic alerts) please log in with your personal account. COLORADO SPRINGS, US (ICIS)-Consumers are willing to pay more for sustainable products that can be recycled or reused, according to a new survey of 6,000 people worldwide by consultancy Accenture. The future for CPG, and increasingly for other categories such as apparel, is sustainable. Companies across industries have . NYU Sterns Center for Sustainable Business just completed extensive research into U.S. consumers actual purchasing of consumer packaged goods (CPG), using data contributed by IRI, and found that 50% of CPG growth from 2013 to 2018 came from sustainability-marketed products. If you are an admin, please authenticate by logging in again. For the US, 22 percent of consumers indicate major changes to the behavior, but that number jumps to 55 percent when including those who say theyve at least made some modest changes. Toilet tissue, facial tissue, milk, yogurt, coffee, salty snacks, and bottled juices were among those with the highest share in their category (more than 18%), while laundry care, floor cleaner, and chocolate candy had less than a 5% share. This statistic displays the share of consumers willing to pay extra for sustainable products in the Netherlands from 2014 to 2020. Create a free account and access your personalized content collection with our latest publications and analyses. Are consumers really willing to pay more for sustainable products? 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. While 66 percent of global consumers are willing to pay. 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). We are interested in estimating the proportion of all consumers willing to pay more. 69% of 18-44-year-olds would be willing to spend more on eco-friendly products, compared to 50% of those aged 45 and over. Others are working for or supporting organizations dedicated to social and environmental change. 43% of consumers want brands to be more aggressive about showing sustainable products on-site to further personalize their shopping experience. While the demand for such products remains low, the price remains high. For years, brand managers have groused that consumers say they intend to buy sustainable products but dont actually buy them. In 2015, brands who showed a commitment to sustainability saw sales grow more than 4% globally. In more than 90% of the CPG categories, sustainability-marketed products grew faster than their conventional counterparts. Our own 2019 report, " The State of Consumer Spending: Gen Z . Complete study findings are available upon request, including country splits. As a Premium user you get access to background information and details about the release of this statistic. The legacy companies that will thrive are those that accept this shift and are willing to pivot, such as PepsiCo and Unilever. For example, plant-based is not a material issue in cereals, as most are plant-based; it is in detergents, where it means toxic chemicals are not used. Looking at web sites for information on business and manufacturing practices. In, Deloitte. Globally, sustainability is rated as an important purchase criterion for 60 percent of consumers. A 2015 global online survey by Nielsen reflected Brabeck-Letmathe's comments, with research showing that 66 percent of the 30,000-plus respondents said they would be willing to pay extra for . I don't dream of a world with 99 cent hamburgers available at any roadside fast food place. Profit from the additional features of your individual account. A survey of 51 retail senior-level . We see the impact of similar sentiment around shower gel, a category where naturals own 10.3% of the value share, and the overall category saw sales decline 0.8%. ATLANTA--(BUSINESS WIRE)--Americans are seeking out and are willing to pay a premium for environmentally friendly products, according to a new study from GreenPrint, an environmental technology company. Given that sustainability issues vary by category, we also assessed whether a claim concerned a material environmental or social issue for that category. In the US, this number is just over the global average at 61 percent. Commitment to the environment has the power to sway product purchase for 45% of consumers surveyed. But brands can nudge consumers towards more eco-friendly products. Businesses are in a bind. It can be done. A substantial portion of consumers are currently willing to pay for sustainability, demonstrating that there is a market for mission-driven green companies and why we see a rise in sustainable companies around the world. And according to Nielsen, I'm not alone in that. More than half (56%) of Americans would use a credit card that could calculate and offset the environmental footprint of products purchased. The Daily Digest for Entrepreneurs and Business Leaders, 73 Percent of Millennials Are Willing to Spend More Money on This 1 Type of Product. Theres a noticeable break between generations, with 71% and 66% of Millennials and Gen Z willing to do so, compared to only 50% Gen X, 46% of Boomers and 39% Silent Generation. 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. Most important,. As economists say, as price lowers, our willingness and ability to buy an item increase. Consumers could note if they were willing to pay "a little" or "a lot" for each sustainability benefit. Broadcasting sustainability would capture an untapped consumer base but also sow distrust, said Pete Davis, CEO and Co-Founder of GreenPrint. "Despite the fact that Millennials are coming of age in one of the most difficult economic climates in the past 100 years, they continue to be most willing to pay extra for sustainable offerings--almost three-out-of-four respondents," says Nielsen. Nielsen, an S&P 500 company, has operations in over 100 countries that cover more than 90% of the worlds population. A majority of people have doubts when companies say they are environmentally friendly, with 53% of Americans never or only sometimes believing such claims. A majority (55%) of consumers are willing to spend extra money in order to purchase environmentally friendly products, though at differing amounts. Ultimately, the research that evaluates consumers willingness to pay more for green products has been mixed. When it comes to purchase behavior, its become abundantly clear that consumers care. People want to feel that whatever they are buying aligns with their personal values. Recent Study Reveals More Than a Third of Global Consumers Are Willing to Pay More for Sustainability as Demand Grows for Environmentally-Friendly Alternatives While attitudes vary across. Millennials represent the consumer market of the future, and it behooves corporations to read the tea leaves. Tech is close behind at 74%, while gas stations and convenience stores rank lower at 51% and 54% respectively. Consumer brands that havent embraced sustainability are at risk on many fronts, says Gstalder. This desire for sustainable products among Gen Z is robust. Register in seconds and access exclusive features. Im seeing quite a few climate-friendly products at the supermarket. 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. Instead, we focused on whether the marketing of a product as sustainable would drive purchases. Green is the new black: why retailers want you to know about their green credentials. As a result, many consumers have adopted more sustainable behaviors. This behaviour isn't just limited to the wealthy in big economies. 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.. She's a strong young feminist poet, an inspiration, and I trust her product because she was open about how she sourced the materials for it. 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. It is no secret that companies must be responsive to customer demands and expectations if they want to survive. To use individual functions (e.g., mark statistics as favourites, set Inherently skeptical, Millennials will punish companies on social media not deemed to be fully transparent as well as those that pay lip service to CSR and causes important to them. For example, one study found Spanish consumers were willing to pay 2237% more for green products, but Japanese consumers were only willing to pay 822% more for green products. "Consumers are really seeking to purchase products that help them stay true to their values and what they consider matters most to them," said Parker. On a global scale, the percentage of consumers willing to pay a premium for. 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. Pay more, waste less: 32% of consumers would pay more for a product from a brand that they believe is committed to sustainability. Retail data backs up the importance of these influencers. According to the2015 Cone Communications Millennial CSR Study, More than nine-in-10 Millennials would switch brands to one associated with a cause (91% vs. 85% U.S. average), and two-thirds use social media to engage around CSR (66% vs. 53% U.S. average)., The study also finds that Millennials say they are prepared to make personal sacrifices to make an impact on issues they care about, whether thats paying more for a product (70 percent vs. 66 percent US average), sharing products rather than buying (66 percent vs. 56 percent) or taking a pay cut to work for a responsible company (62 percent vs. 56 percent).. 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. In its2015 Nielsen Global Corporate Sustainability Report, Nielson found that 66% of global consumers say they are willing to pay more for sustainable brands up 55% from 2014. It also found that 73% of global Millennials are willing to pay extra for sustainable offerings up from 50% in 2014. While companies are increasingly using environmental claims to appeal to consumers, they also attract greater scrutiny. not how pretty the blush is. This sum will continue to grow exponentially as more Millennials reach peak buying power. 66% of survey respondents are willing to pay more for sustainable goods, up from 55% in 2014, and 50% in 2013 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%. 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. For this group, personal values are more important than personal benefits, such as cost or convenience. In one survey, 66% of all respondents, and 75% of millennial respondents, said they consider sustainability when making a purchase. Studies show that people are geared towards using sustainable products more than others. Nielsen's most recent Global Sustainability Report found that 66 percent of consumers said they were willing to pay more for sustainable brands, up from 55 percent in 2014. . Its hard to ignore the siren call to protect the planet. Products that we deemed sustainability-marketed in 2018 were considered sustainability-marketed in 2013 too, as we were unable to examine 2013 packaging for all products. While attitudes vary across generations, countries, and industries, 85% of consumers have become greener in their purchasing in recent years. To ensure the most secure and best overall experience on our website we recommend the latest versions of, Internet Explorer is no longer supported. Traditional advertising will not work with Millennials. .chakra .wef-facbof{display:inline;}@media screen and (min-width:56.5rem){.chakra .wef-facbof{display:block;}}You can unsubscribe at any time using the link in our emails. Personal values indeed. Question: Socially conscious Consumers In March 2015, a Nielsen global online survey "found that consumers are increasingly willing to pay more for socially responsible products. And investors should support companies in making the investments needed for the pivot. This is especially true for Millennials. 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. Prosek Partners This page does not exist in [x], feel free to read the page you are currently on or go to the [x] homepage. Yes, meat will cost more and won't as widely available, but farm animalsshould all have real lives and humane deaths (and stop emitting so much methane into the atmosphere). The Nielsen Global Survey on Corporate Social Responsibility polled more than 29,000 Internet respondents in 58 countries. Wed suggest they follow the data. As a result, e-commerce businesses that prioritize environmentally-friendly practices will likely see a competitive advantage. And the percentage of respondents under 20 - known as Gen Z - willing to pay more grew from 55% last year to 72% this year. A Global Corporate Sustainability Report published by Nielsen indicates that, "globally, 66 percent of consumers are willing to spend more on a product if it comes from a sustainable brand. About three in four Millennials (74 percent) and Generation Z consumers (72 percent) are willing to pay more for sustainable products and services, according to The Nielsen Company. Please do not hesitate to contact me. Consumer concern about the environment does not readily translate into the purchase of environmentally friendly products. In a study of 30,000 consumers across 60 countries, Nielsen found that nearly 2/3 of consumers globally are willing to pay more for sustainable goods and that is on the rise. A fresh one is out from McKinsey & Company and Nielsen IQ - and the punchline is that making and Sustainability sentiment is particularly consistent across income levels. e-mail: [email protected] Carbon dioxide emissions in France 1970-2021, Share of e-commerce GHG emissions worldwide 2020, by source, Leading e-commerce delivery methods used in France 2021, Average product return rates among digital shoppers in Europe 2021. 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%. However, as demand grows for sustainable products and they become the expectation rather than the exception, sustainability will become table stakes and hygiene factors, said Jain. Eco-friendly isnt quite so broad and defines products or practices that do not harm the Earths environment. Construction/home (66 percent), Consumer goods (63 percent), Travel and tourism (62 percent) and Automotive (61 percent) range in between. 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. I'm willing to pay significantly more to support quality products and human rights, and put my money where my mouth is when it comes to creatingthe world in which I want to live. For fifteen years, Rudominer has operated on the front lines and behind the scenes of numerous communications campaigns, providing strategic counsel to public officials, corporations, trade associations, and non-profits. According to a recent survey, 73% of Gen Zers are willing to pay more for sustainable products. Seventh Generation, Sundial Brands, and Pukka Herbs. 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