In terms of how much, Gen. Z (32 percent premium) and Millennials (31 percent premium) are willing to pay more than twice as big a premium as Baby Boomers (14 percent premium) and a third more relative to Gen. X (21 percent premium). 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). Good Environmental Choice Australia is a similar organisation. 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. That said, some of those categories saw high growth in sustainability-marketed products sanitary napkins and laundry care were among the highest, at 150%. 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. The study also found a large degree of mistrust about companies environmental claims. The relative importance of sustainability during the purchase process will continue to increase. It also found that 73% of global Millennials are willing to pay extra for sustainable offerings up from 50% in 2014. That across the board, consumers are willing to pay extra for one thing: sustainability. 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. 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. Chart. Sustainability-marketed products are growing quickly in almost all CPG categories. 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). All Rights Reserved. Voir les partenaires de TheConversation France. A new study, looking at the sales from 2013 to 2018 of products marketed as sustainable, finds the conventional wisdom isnt true. While the demand for such products remains low, the price remains high. TV ads highlighting a companys commitment to positive social and/or environmental impact are influential in the path to purchase for 34% of global respondents. When browsing beauty products, my first question is, "Is it cruelty-free?" 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. Simon-Kucher & Partners, Strategy & Marketing Consultants: Simon-Kucher & Partners is a global consulting firm specializing in TopLine Power. 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. 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. Are consumers willing to pay more for these? In fact, the majority (73%) of global consumers say they would definitely or probably change their consumption behavior to reduce their impact on the environment. And how can we encourage people to make good choices? 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. A balanced approach is key for brand communicators, with the emphasis on demonstrating good deeds versus self-serving promotion.. When expanded it provides a list of search options that will switch the search inputs to match the current selection. In 2015, Nielsen polled 30,000 consumers in 60 countries around the world. . 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. Minds can be changed, laws can be changed, and companies can be changed. 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%. Indeed, one recent report revealed that certain categories of products with . This is a relatively new perspective for consumers. In 1989, 67% of American consumers stated that they were willing to pay 5 - 10% more for sustainable products. 2023 Nielsen Consumer LLC. 43% of consumers want brands to be more aggressive about showing sustainable products on-site to further personalize their shopping experience. The top attributes that more than one-third of consumers were willing to pay more for included: cruelty free (31%), farm raised (32%), organic farming (33%) and environmentally friendly (33.5%). 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. lire aussi : 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. 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. Businesses must adapt to the times as consumers . 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. So when it comes to purchasing, they are doing their homework. Consumer brands that havent embraced sustainability are at risk on many fronts, says Gstalder. This page does not exist in [x], feel free to read the page you are currently on or go to the [x] homepage. What is the World Economic Forum doing about the circular economy? Prosek Partners As a Premium user you get access to background information and details about the release of this statistic. 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. 6 takeaways from the worlds biggest cultural policy gathering, Putting Solar Panels On Farms Makes Sheep Happier. Our eBook "What ESG means to you and your consumers in 2022" is designed to help Traditional advertising will not work with Millennials. 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. For this reason, the demand for sustainable foods is growing in the market. Companies must act now to avoid obsolescence in the future. 'Global consumer-goods' brands that ignore sustainability increase reputational and business risk' Nielsen's research also found that 66 percent of consumers were willing to pay more for sustainable goods in comparison to 50 percent in 2013. That across the board, consumers are willing to pay extra for one thing: sustainability. 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. Consumers' demand for sustainable products is increasing. All Rights Reserved. Academic research has consistently identified this gap between purchase intentions and behaviours. It is no secret that companies must be responsive to customer demands and expectations if they want to survive. While the survey respondents were answering questions . Instead, we focused on whether the marketing of a product as sustainable would drive purchases. 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. e-mail: rachel.pope@simon-kucher.com Millennials make up the fastest growing force in the marketplace. If you are an admin, please authenticate by logging in again. Younger shoppers are the most willing to. Consumer-goods brands that fail to take this into account will likely fall behind.. January 18, 2023. I don't dream of a world in which I can get a shirt for $3.99 just for the sake of that. zharris@prosek.com, Internet Explorer presents a security risk. 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). 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. 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. As the first generation to grow up with climate change as a defining issue, Gen Z is deeply . As companies look to break into new markets, they must understand that each market demands its own approach. 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. A new report reveals all. Interestingly, of the people that are willing to pay a sustainability premium, the premium amount is lowest for Consumer goods (22 percent premium on average) it is highest for Financial services (27 percent premium on average). And its no longer just wealthy suburbanites in major markets willing to open their wallets for sustainable offerings. 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. Droits d'auteur 20102023, The Conversation France (assoc. More than half (56%) of Americans would use a credit card that could calculate and offset the environmental footprint of products purchased. 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. In a free market economy, it is very difficult to force people to pay more for products. : (617) 231-4551 While companies are increasingly using environmental claims to appeal to consumers, they also attract greater scrutiny. As a result, e-commerce businesses that prioritize environmentally-friendly practices will likely see a competitive advantage. A majority (55%) of consumers are willing to spend extra money in order to purchase environmentally friendly products, though at differing amounts. Personal values indeed. We help our clients achieve growth and profit targets by applying practical, evidence-based strategies. Millennials want to know what companies are doing to make the world a better place. To ensure the most secure and best overall experience on our website, we recommend the latest versions of. According to the findings, 78% of people are more likely to purchase a product that is clearly labeled as environmentally friendly. We made no attempt to assess if products marketed as sustainable were, in fact, sustainable. For years, brand managers have groused that consumers say they intend to buy sustainable products but dont actually buy them. lire aussi : This statistic displays the share of consumers willing to pay extra for sustainable products in the Netherlands from 2014 to 2020. Can changing your mindset change everything? In burgeoning sustainability markets, however, natural and organic are paving the way for more detailed and specific claims. Climate-friendly defines products that reduce damage specifically to the climate. Others are working for or supporting organizations dedicated to social and environmental change. 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