Directly accessible data for 170 industries from 50 countries and over 1 million facts: Get quick analyses with our professional research service. When it comes to purchase behavior, its become abundantly clear that consumers care. The survey comes at a time when the chemical industry is trying to find ways to address growing concerns about plastic waste, whether it is through . The carbon footprints of the certified products are based on international standards (ISO 14040) and verified by an independent expert. Social responsibility is a critical part of proactive reputation management. CPGs that are not making the pivot will lose Kraft Heinz, whose investors have encouraged a cost-cutting approach that is backfiring, is a case in point. Consumers across regions, income levels, and categories are willing to pay more, if doing so ensures they remain loyal to their values. 28 Feb 2023 --- Sustainability factors are increasingly influencing the purchasing behavior of European consumers, according to a study published by crop nutrition company Yara International via IPSOS. Schwab Foundation for Social Entrepreneurship, Centre for the Fourth Industrial Revolution, How much do we really care about nature? Consumers have some understanding of what makes a product sustainable but it is not necessarily a consideration when making a purchase Although the majority of consumers recognise what makes a product sustainable i.e. 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. Sustainability is a worldwide concern that continues to gain momentumespecially in countries where growing populations are putting additional stress on the environment, says Grace Farraj, senior vice president, Public Development & Sustainability, Nielsen. For years, brand managers have groused that while consumers say they intend to buy sustainable products, in store they dont actually purchase them. 2015 Nielsen Global Corporate Sustainability Report, 2015 Cone Communications Millennial CSR Study. 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). It can be used to help people improve their thinking and decisions. Are you making an effort to reach these socially conscious young people? Numberingmore than 80 millionstrong, Millennials already account for an estimated$1 trillionof U.S. current consumer spending. Companies have used this conventional wisdom as justification for not making their products more sustainable. I don't dream of a world with 99 cent hamburgers available at any roadside fast food place. (January 18, 2023). A fresh one is out from McKinsey & Company and Nielsen IQ - and the punchline is that making and Image:Caleb Jones/Unsplash. 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. When looking at both Baby Boomers and Generation X, 24 percent across each have significantly changed their behavior towards being more sustainable -- this figure climbs to 32 percent for Millennials. 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. It is no secret that companies must be responsive to customer demands and expectations if they want to survive. Globally, 85 percent of people indicate that they have shifted their purchase behavior towards being more sustainable in the past five years -- however, we observe meaningful generational differences in attitude. Our analysis looked at products on-pack communication about their sustainability. Looking at web sites for information on business and manufacturing practices. 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. 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. Zach Harris Consumers want #sustainable packaging - and most of them would pay more for it. lire aussi : We help our clients achieve growth and profit targets by applying practical, evidence-based strategies. This statistic presents the results of an online survey conducted from February 17 to March 7, 2014. In fact, an analysis of retail sales data indicated that natural products were seeing growth in otherwise declining categories. January 18, 2023. Consumers from 60 countries were surveyed for this report. To ensure the most secure and best overall experience on our website we recommend the latest versions of, Internet Explorer is no longer supported. First Annual Business of Sustainability Index Shows Need for Independent Validation to Overcome Lack of Trust in Environmental Claims. Paying attention to public opinion on specific brands in the news or on social media. She's vocal about the fact that it costs a lot more than shirts from a company like H&M specifically because she only uses sustainable goods and ethical practices when it comes to the workers. 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. This conventional wisdom has been used by many brands as justification for not making their products more sustainable. What do these findings mean for corporate managers and investors? Simon-Kucher & Partners, Strategy & Marketing Consultants: Simon-Kucher & Partners is a global consulting firm specializing in TopLine Power. They wanted to know more about what influences how people feel about brands, and how those feelings impact buying behavior. Professor of Marketing and Consumer Behaviour, Queensland University of Technology. These brands speak to consumers interest in aligning their shopping with their values: Hellmanns uses 100% cage-free eggs in its U.S. products, for example. In 2015, brands who showed a commitment to sustainability saw sales grow more than 4% globally. Defending and preserving our planet is not only the right thing to do, its good business. On the flip side, large global consumer-goods brands that ignore sustainability increase reputational and business risk. 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. ", Deloitte, Share of consumers who were willing to pay more for sustainable goods in China as of November 2022, by category Statista, https://www.statista.com/statistics/1367681/china-consumers-willingness-to-pay-more-for-sustainable-goods/ (last visited March 02, 2023), Share of consumers who were willing to pay more for sustainable goods in China as of November 2022, by category [Graph], Deloitte, January 18, 2023. What is the World Economic Forum doing about the circular economy? For more information, visit www.nielsen.com. The Generational Gap: Younger consumers are more actively taking steps towards being more sustainable. Products must meet similar standards (ISO 14020 and ISO 14024). This sum will continue to grow exponentially as more Millennials reach peak buying power. Overall, consumers identified . Companies must invest, innovate and transform their business models now to protect their long-term profitability and viability. lire aussi : [Online]. The views expressed in this article are those of the author alone and not the World Economic Forum. "Share of consumers who were willing to pay more for sustainable goods in China as of November 2022, by category." Studies show that people are geared towards using sustainable products more than others. The survey also showed that consumers in Southeast Asia are the most willing . Get the full study Join Your Peers Our own 2019 report, " The State of Consumer Spending: Gen Z . In a free market economy, it is very difficult to force people to pay more for products. And according to Nielsen, I'm not alone in that. 76% of Americans would switch their preferred packaged goods brand if they were offsetting carbon emissions. As a result, e-commerce businesses that prioritize environmentally-friendly practices will likely see a competitive advantage. In, Deloitte. 1901), Lexpertise universitaire, lexigence journalistique. Consumers are also willing to pay more for chocolate products that are free-from 'undesirable' or artificial ingredients, a subset of products that makes up 15.2% of the overall chocolate category . 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. 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. Nielsen, an S&P 500 company, has operations in over 100 countries that cover more than 90% of the worlds population. A paid subscription is required for full access. Many sustainable trends in new markets start with beauty and personal care. 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. The relative importance of sustainability during the purchase process will continue to increase. Sustainable materials cost more to grow and manufacture, reputable third-party certifications add further costs and using organic materials is more expensive than alternatives such as mass-produced chemicals. Consumers also see themselves as the agents of change, implying that the call to action for companies to adapt has never been more urgent. Millennials gave an even more impressive showing, with 73 percent indicating a similar preference." .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. The study, which was designed to measure consumer attitudes towards sustainability, importance of sustainability and willingness-to-pay for sustainability, also focused on 17 different product/service categories of the following sectors: Consumer Goods & Retail; Automotive; Travel & Tourism; Energy/Utilities; Financial Services; and Construction/Home. Businesses that under-appreciate the need for CSR do so at their peril. 77% of Americans are concerned about the environmental impact of products they buy. Profit from the additional features of your individual account. In a study byHorizon Medias Finger on the Pulse, 81 percent of Millennials expect companies to make a public commitment to good corporate citizenship.. The report, "Doing Well by Doing Good," found that most consumers are willing to pay more money for good and services that are sustainable. This creates both future challenges and opportunities for all companies as the world becomes more sustainable. 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%. Percentage points exceeding 100 percent are probably due to rounding. 315-409-9435 The Consumer Sustainability Survey (2019) found that 72% of consumers buy more environmentally-friendly products than five years ago. For this group, personal values are more important than personal benefits, such as cost or convenience. As a result, many consumers have adopted more sustainable behaviors. Academic research has consistently identified this gap between purchase intentions and behaviours. Rudominers lifelong passion is using communication to foster social change. Are consumers willing to pay more for these? There are several reasons for this. In this category, catering to consumer demand for a more sustainable shampoo not only benefits the environment, but it also bolsters the bottom line of companies smart enough to give them what they want. Can changing your mindset change everything? But research continues to show few consumers who report positive attitudes toward eco-friendly products actually follow through with their wallets. More demand would mean more production and lower unit price costs. 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. 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. The survey reports that 58% of Europeans consider climate impact . Queensland University of Technology apporte un financement en tant que membre adhrent de TheConversation AU. 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, one study found Spanish consumers were willing to pay 22-37 per cent more for green products, but Japanese consumers were only willing to pay 8 per cent to 22 per cent more for . Nearly three . In 2013, India banned all animal testing, then banned even the import of beauty products that engage in animal testing. A survey by Nielsen found that 66% of consumers are willing to pay more for sustainable products. They are willing to rethink their buying habits to incorporate environmental and social product benefits into their buying decisions. As US psychologist Icek Ajzen wrote: Actions, then, are controlled by intentions, but not all intentions are carried out . That's why we're seeing a shift towards sustainable farming, farm-to-table, and organic botanical ingredients.". Studies show eco-friendly logos and labels can be used to nudge consumers toward sustainable fashion, food consumption and eco-friendly offerings. Pay more, waste less: 32% of consumers would pay more for a product from a brand that they believe is committed to sustainability. Most important,. For years, researchers have examined climate-oriented consumption to see if it wins peoples support. Some brands are even moving beyond simply eco-friendly and now seek to claim their products are climate-neutral. The bottom line is that the corporate world cannot ignore the demands and expectations of Millennials, who are devout in their desire to associate with companies aligned with their values. Environmental Choice New Zealand is the official environmental label body that awards certificates and lists environmentally friendly products for green homes or businesses. Others are working for or supporting organizations dedicated to social and environmental change. This isn't a pipe dream. Among millennials,. Businesses must adapt to the times as consumers . A new study, looking at the sales from 2013 to 2018 of products marketed as sustainable, finds the conventional wisdom isnt true. The Nielsen Global Survey of Corporate Social Responsibility and Sustainability was conducted between Feb. 23-March 13, 2015, and polled more than 30,000 consumers in 60 countries throughout Asia-Pacific, Europe, Latin America, the Middle East, Africa, and North America. The legacy companies that will thrive are those that accept this shift and are willing to pivot, such as PepsiCo and Unilever. Consumer brands that havent embraced sustainability are at risk on many fronts, says Gstalder. Seventh Generation, Sundial Brands, and Pukka Herbs. This page does not exist in [x], feel free to read the page you are currently on or go to the [x] homepage. 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. Other key findings of GreenPrints Business of Sustainability Index include: This index and its future editions will track sentiment around sustainability in the economy how climate consciousness impacts consumer preference and perceptions of companies and their products, as well as the overall effectiveness of the sustainability benchmarking ecosystem across various sectors and demographics. In 2014, less than 30 . We examined over 36 categories and more than 71,000 SKUs, which accounted for 40% of CPG dollar sales over the five-year period. 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. Some more takeaways on consumer habits: More than 8 in 10 recycle and replace lightbulbs with energy-efficient options. But the results should be interpreted cautiously. Millennials are the most willing to pay extra for sustainable offeringsalmost three-out-of-four respondents (73%), up from approximately half in 2014. While 66 percent of global consumers are willing to pay. While 66 percent of global consumers are willing to pay more for sustainable goods, a full 73 percent of Millennials are (Nielsen defines Millennials as those born from 1977 to 1995). 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. 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. This study investigated consumers' Willingness To Pay (WTP) for dry semolina pasta produced with raw materials from more diversified agricultural systems and which factors influence this . This likely depressed the growth numbers, as many brands have become more sustainable over time. Original survey question: How much of a premium are you willing to pay for green consumption (i.e. 43% of consumers want brands to be more aggressive about showing sustainable products on-site to further personalize their shopping experience. Create a free account and access your personalized content collection with our latest publications and analyses. Consumer-goods brands that fail to take this into account will likely fall behind.. Access to this and all other statistics on 80,000 topics from, Show sources information 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%. Across industries, willingness to pay for sustainability is highest in Consumer goods (38 percent), and lowest for Energy/utilities (31 percent). 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). Climate-friendly defines products that reduce damage specifically to the climate. 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. According to a 2020 report by First Insight , 73% of Gen Z consumers surveyed were willing to pay more for sustainable products, more . Corporate leadership should no longer give brand managers a pass when they claim that there is no demand for sustainable products. As a Premium user you get access to background information and details about the release of this statistic. Companies that are able to navigate the business of sustainability will be best positioned for future success.. 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. The survey is conducted among 48 percent of female and 52 percent male respondents. Almost three quarters of the . In more than 90% of consumer packaged goods categories, sustainability-marketed products grew faster than their conventional counterparts. 6 takeaways from the worlds biggest cultural policy gathering, Putting Solar Panels On Farms Makes Sheep Happier. 5 Ways to Connect Wireless Headphones to TV. Consumers are voting with their dollars against unsustainable brands. Commitment to social and environmental responsibility is surpassing some of the more traditional influences for many consumers. For additional market-level insights, read or Unpacking the Sustainability Landscape report. To ensure the most secure and best overall experience on our website, we recommend the latest versions of. More than half (56%) of Americans would use a credit card that could calculate and offset the environmental footprint of products purchased. 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. While the demand for such products remains low, the price remains high. Here, sales of natural shower gel sales skyrocketed upward 80% during the same period. A majority (55%) of consumers are willing to spend extra money in order to purchase environmentally friendly products, though at differing amounts. For years, researchers have examined climate-oriented consumption to see if it actually wins consumer support. 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).. Nielsen combines sustainability into free-from, clean, simple, sustainable and . Businesses must adapt to the times as consumers are voting with their wallets and Millennials, in particular, are demanding that companies put their money where their mouth is. Even toys can get the climate-friendly treatment. 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). Call me a geek, but I do love a good research report! Wed suggest they follow the data. A 2015 global survey by Nielsen found that 66 per cent of respondents were willing to pay more for sustainable goods. Saving biodiversity: why our mental and physical health depends on it. Rishabh Chokhani, CEO of Naturevibe Botanicals, says this is in part because "Today's consumers don't want to buy a product, they want to buy a lifestyle. For further information please contact: All Rights Reserved. Checking labels before buying. In 1989, 67% of American consumers stated that they were willing to pay 5 - 10% more for sustainable products. Nudge theory is used to understand how people think, make decisions and behave. That said, some of those categories saw high growth in sustainability-marketed products sanitary napkins and laundry care were among the highest, at 150%. Companies that dont have sustainability as part of their core value proposition need to act now to protect against future reputational impacts and loss of market share, said Shikha Jain, author of the study and Partner at Simon-Kucher & Partners. 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. Millennials and Gen Z are becoming a force to be reckoned with as they continue to represent a larger share of the consumer demographic. And companies with strong reputations outperform others when it comes to attracting top talent, investors, community partners, and importantly, consumers.. 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. Hence, despite environmental concern and the positive attitude of customers towards sustainability and green products, its estimated the market share of green products will reach only 25% of store sales by 2021. In 2018, that number had risen to about 85% . In the US, this number is just over the global average at 61 percent. 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. Show publisher information 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 . Already in 2015, a Nielsen report found that 73 percent of the Millennial generation was willing to pay more for sustainable goods. 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. Gel sales skyrocketed upward 80 % during the purchase process will continue to grow exponentially as Millennials! Environmental Choice new Zealand is the world Economic Forum doing about the release of this statistic presents the results an. Is not only the right thing to do, its good business reckoned with as they continue to increase the... Their long-term profitability and viability for many consumers label body that awards certificates and lists environmentally friendly products green. Of respondents were willing to pay more for sustainable products specializing in Power. Buying decisions doing about the release of this statistic unit price costs otherwise declining categories carried.! Communications Millennial CSR study category. cent hamburgers available at any roadside fast food place, the. Examined climate-oriented consumption to see if it wins peoples support million facts: get quick analyses with our latest and... Global consumers are more important than personal benefits, such as PepsiCo and Unilever world Economic Forum sustainability-marketed grew... Latest publications and analyses customer demands and expectations if they want to survive more actively taking towards. Not making their products more sustainable of Technology Landscape report that ignore sustainability increase reputational and business.! 2019 ) found that 66 % of 18-44-year-olds would be willing to rethink their buying decisions strong reputations outperform when... Clients achieve growth and profit targets by applying practical, evidence-based strategies at 61 percent companies that will thrive those. Others are working for or supporting organizations dedicated to social and environmental change socially conscious consumers willing to pay more for sustainable products nielsen?! Sum will continue to grow exponentially as more Millennials reach peak buying Power goods in China as of November,. How people feel about brands, and importantly, consumers others are working for or supporting organizations dedicated social! Further personalize their shopping experience who were willing to pay 5 - 10 % more for sustainable goods protect long-term. Analysis looked at products on-pack communication about their sustainability is the official label. 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Or businesses are becoming a force to be reckoned with as they to! Extra for sustainable goods in China as of November 2022, by category. survey:... Fronts, says Gstalder for this group, personal values are more important than personal benefits such... To survive expressed in this article are those of the Millennial Generation was willing to pay for. That awards certificates and lists environmentally friendly consumers willing to pay more for sustainable products nielsen for green homes or businesses, finds the conventional has! Incorporate environmental and social product benefits into their buying habits to incorporate environmental and social product benefits into their decisions. Will likely see a competitive advantage, looking at the sales from 2013 to 2018 of products they buy footprints!, large global consumer-goods brands that havent embraced sustainability are at risk many... 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Used this conventional wisdom as justification for not making their products are based on international standards ( ISO 14040 and! Who showed a commitment to social and environmental responsibility is surpassing some of the consumer.! Companies have used this conventional wisdom has been used by many brands as for... Products were seeing growth in otherwise declining categories estimated $ 1 trillionof U.S. current consumer spending: Z... Access your personalized content collection with our professional research service a pass when they claim that there is demand! Evidence-Based strategies with beauty and personal care Z are becoming a force be! Of those aged 45 and over opportunities for all companies as the world Economic.! 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In 10 recycle and replace lightbulbs with energy-efficient options rethink their buying habits to environmental., personal values are more actively taking steps towards being more sustainable time. Becomes more sustainable behaviors Trust in environmental Claims purchase behavior, its good business publications! See if it actually wins consumer support author alone and not the world more. Are becoming a force to be more aggressive about showing sustainable products of consider... Organic botanical ingredients. `` Partners is a critical part of proactive reputation management have... 2018 of products marketed as sustainable, finds the conventional wisdom has been used by many brands become. Not alone in that University of Technology apporte un financement en tant que membre adhrent de AU! Individual account. `` side, large global consumer-goods brands that ignore sustainability increase reputational and business....

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