Consumers are voting with their dollars against unsustainable brands. From procuring raw materials to shipping the final product, almost all steps of the manufacturing and production process of eco-friendly products cost more than traditional products. Are consumers really willing to pay more for sustainable products? 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. 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. Social responsibility is a critical part of proactive reputation management. (1) Background: The pressure that agricultural systems' intensive management exerts on the environment concerns society. Commitment to either social value or the consumers community are also important (each influencing 43% and 41% of respondents, respectively). A fresh one is out from McKinsey & Company and Nielsen IQ - and the punchline is that making and Third-party validation helps certify progress in the eyes of consumers, and the process of carbon offsetting which is easy to measure and communicate helps create tangible benchmarks. 1901), Lexpertise universitaire, lexigence journalistique. But in a increasingly interconnected world, it's starting to be normal to think critically about where things come from and whether the company you're supporting is a responsible corporate citizen. GreenPrint 74% would switch gasoline brands in the same situation. That across the board, consumers are willing to pay extra for one thing: sustainability. This page does not exist in [x], feel free to read the page you are currently on or go to the [x] homepage. Reports, such as Nielsen Insights , suggest the majority (73 percent) of people would change their consumption habits to reduce their impact on the environment, and almost half . Businesses that under-appreciate the need for CSR do so at their peril. January 18, 2023. For years, researchers have examined climate-oriented consumption to see if it wins peoples support. That said, some of those categories saw high growth in sustainability-marketed products sanitary napkins and laundry care were among the highest, at 150%. Meanwhile, fish and seafood dollars and units rose 8.7% and 2.7%, respectively, from 2017 to 2019, outpacing the growth of other proteins, including legumes, nuts and seeds. On the flip side, large global consumer-goods brands that ignore sustainability increase reputational and business risk. Im seeing quite a few climate-friendly products at the supermarket. The hierarchy among drivers of consumer loyalty and brand performance is changing, says Farraj. But the results should be interpreted cautiously. Topping the list of sustainability factors that influence purchasing for nearly two-of-three (62%) consumers globally: brand trust. As a Premium user you get access to the detailed source references and background information about this statistic. You need at least a Starter Account to use this feature. For years, researchers have examined climate-oriented consumption to see if it actually wins consumer support. What is the Green List and how can it help protect the worlds natural wonders? In 2018, that number had risen to about 85% . 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. To ensure the most secure and best overall experience on our website, we recommend the latest versions of. According to a survey conducted among Chinese adults in November 2022, around 66 percent of respondents stated that they were willing to pay more for sustainable goods. Studies show eco-friendly logos and labels can be used to nudge consumers toward sustainable fashion, food consumption and eco-friendly offerings. Create a free account and access your personalized content collection with our latest publications and analyses. : (617) 231-4551 Numberingmore than 80 millionstrong, Millennials already account for an estimated$1 trillionof U.S. current consumer spending. Millennials make up the fastest growing force in the marketplace. 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 offeringsalmost three-out-of-four respondents (73%) in the latest findings, up from approximately half in 2014. While this statistic is telling on its own, what's more telling is that 81% of those interviewed said that they planned to buy more sustainable products over the next five years.. And environmental consciousness isn't a new trend among consumers. 9. Prosek Partners This is a relatively new perspective for consumers. In other words, I'm willing to spend more (a lot more, in fact) to know that what I'm spending my money on is actually good for the earth and the people on it. . GreenPrint is a global environmental technology company, offering sustainability as a service with patent-protected programs that deliver environmental impact and bottom-line results. 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. Companies must invest, innovate and transform their business models now to protect their long-term profitability and viability. lire aussi : According to the findings, 78% of people are more likely to purchase a product that is clearly labeled as environmentally friendly. About a 3 minute read. Almost three quarters of the . For this group, personal values are more important than personal benefits, such as cost or convenience. 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. Younger shoppers are the most willing to. As the first generation to grow up with climate change as a defining issue, Gen Z is deeply . This likely depressed the growth numbers, as many brands have become more sustainable over time. Nudge theory is used to understand how people think, make decisions and behave. For instance, while the overall shampoo category saw declines of 3.4% over a year long period ending April 2018, natural shampoos, which own 11.2% of the value share, are steadily growing at 2.2%. New York-based Nielsen forecasts the market to reach somewhere between $142.4 billion and $150.1 billion by 2021. One-third of millennials often or exclusively use investment products that take ESG factors into account 19% of Gen Z, 16% of Gen X and 2% of baby boomers. I can attest to the fact that sustainability isn't just something I "sorta kinda" consider--it's one of the primary reasons I either buy or don't buy from consumer brands. 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%. In a free market economy, it is very difficult to force people to pay more for products. A new report reveals all. For further information please contact: Our analysis looked at products on-pack communication about their sustainability. Mr. Davis said of the survey: Companies must build trust and loyalty by clearly demonstrating that they share environmental goals with their customers. 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%. Get in touch with us now. Gary Mortimer ne travaille pas, ne conseille pas, ne possde pas de parts, ne reoit pas de fonds d'une organisation qui pourrait tirer profit de cet article, et n'a dclar aucune autre affiliation que son organisme de recherche. It can be used to help people improve their thinking and decisions. The views expressed in this article are those of the author alone and not the World Economic Forum. Small brands in this space are also attracting the bigger players attention Unilever has purchased brands with loyal followings such as Seventh Generation, Sundial Brands, and Pukka Herbs. Traditional advertising will not work with Millennials. Ultimately, the research that evaluates consumers willingness to pay more for green products has been mixed. Youths' greater sensitivity towards CSR issues is on display in another report, this one limited to US respondents. This shows that sustainability has been on consumers' minds for quite. The Nielsen Global Survey on Corporate Social Responsibility polled more than 29,000 Internet respondents in 58 countries. This is the result of a representative survey that we commissioned from INNOFACT. The Global Sustainability Study 2021 survey was conducted in July 2021 by Simon-Kucher & Partners, fielding through panel data provided by Dynata, an independent market research agency. In the US, this number is just over the global average at 61 percent. Businesses are in a bind. If you have a question youd like an expert to answer, please send it to climate.change@stuff.co.nz. , Feb 8, 2023. Minds can be changed, laws can be changed, and companies can be changed. In fact, almost half (41%) of consumers from around the world say that theyre highly willing to pay more for products that contain all-natural or organic ingredients. 43% of consumers want brands to be more aggressive about showing sustainable products on-site to further personalize their shopping experience. While 66 percent of global consumers are willing to pay. Nielsen, an S&P 500 company, has operations in over 100 countries that cover more than 90% of the worlds population. how much more are you willing to pay compared to regular goods) when purchasing the following categories? 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 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%. Overall, consumers identified . Eco-friendly isnt quite so broad and defines products or practices that do not harm the Earths environment. Why cities should be fully recognized stakeholders within the UN system, This Architect Says Sustainable Timber Could Be The Future Of Our Cities, 3 solutions helping net-zero aviation take off, is affecting economies, industries and global issues, with our crowdsourced digital platform to deliver impact at scale. Globally, willingness to pay for sustainable products or services is highest in US (42 percent), with these the US also representing the highest average premium (37 percent premium). BOSTON--(BUSINESS WIRE)--With COP26, the 2021 United Nations Climate Change Conference, just weeks away, a major study of more than 10,000 people across 17 countries shows that sustainability is becoming increasingly important in consumers purchasing decisions, especially as consumers see themselves, along with for profit companies, as the primary catalysts for change. All rights reserved. For more information, visit www.nielsen.com. In more than 90% of consumer packaged goods categories, sustainability-marketed products grew faster than their conventional counterparts. A survey of 51 retail senior-level . 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 didn't even According to Chicago-based Nielsen's 2019 "Protein Proliferation" report, 19% of consumers surveyed said that they intended to increase their consumption of meat and seafood more than any other protein group. It's not just a morally good idea, either; it's lucrative. The study also found a large degree of mistrust about companies environmental claims. 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. I don't dream of a world in which I can get a shirt for $3.99 just for the sake of that. Green is the new black: why retailers want you to know about their green credentials, Speaking with: law professor Cass Sunstein, on why behavioural science is always nudging us. Weve been on this journey for a while, but the clock is ticking and failure to think through the implications could have long-term consequences for traditional firms., Across industries and countries, sustainability is a significant purchase criterion -- though price and quality continue to dominate. You can only download this statistic as a Premium user. 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. When browsing beauty products, my first question is, "Is it cruelty-free?" Sustainability-marketed products are growing quickly in almost all CPG categories. Companies should be aware that consumers are increasingly voting with their dollars against unsustainable brands. Complete study findings are available upon request, including country splits. A new study, looking at the sales from 2013 to 2018 of products marketed as sustainable, finds the conventional wisdom isnt true. To use individual functions (e.g., mark statistics as favourites, set Products and services that are offered from socially responsible companies may be able to charge more, according to a report by Nielsen. A weekly update of the most important issues driving the global agenda. A clear majority of Europeans (74%) say food companies need to work to reduce the emissions from . 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. We made no attempt to assess if products marketed as sustainable were, in fact, sustainable. In 2015, Nielsen polled 30,000 consumers in 60 countries around the world. 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. 65% would be willing to spend up to 20% more on eco-friendly products. 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