Are consumers really willing to pay more for sustainable 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. Even toys can get the climate-friendly treatment. IRIs data comes from bar scan codes at retail checkout in food, drug, dollar, and mass merchandisers. An Inc. 5000 company and a member of 1% Percent for the Planet, GreenPrints turnkey offerings help companies meet sustainability goals while increasing brand value and customer loyalty making it easy for businesses to do well by doing good. Businesses must adapt to the times as consumers . This creates both future challenges and opportunities for all companies as the world becomes more sustainable. As soon as this statistic is updated, you will immediately be notified via e-mail. 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. One overwhelming conclusion of the report? While attitudes vary across generations, countries, and industries, 85% of consumers have become greener in their purchasing in recent years. 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. That across the board, consumers are willing to pay extra for one thing: sustainability. Companies across industries have . Mr Harrison says, however, that customers are becoming more canny. To ensure the most secure and best overall experience on our website we recommend the latest versions of, Internet Explorer is no longer supported. 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. 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. Climate-friendly defines products that reduce damage specifically to the climate. 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. About a 3 minute read. And as social media channels continue to burgeon, the voice of younger generations will only increase the demand for sustainability. In more than 90% of the CPG categories, sustainability-marketed products grew faster than their conventional counterparts. Vietnamese consumers are the most socially-conscious among Southeast Asians, with 86 percent expressing their willingness to pay extra for products and services from firms which are committed to positive social and environmental impact, a new Nielsen survey found. Simon-Kucher & Partners, Strategy & Marketing Consultants: Simon-Kucher & Partners is a global consulting firm specializing in TopLine Power. For this group, personal values are more important than personal benefits, such as cost or convenience. Marketers, operators, and merchants need to take the following steps: one, penetrate the right segment; two, unlock what motivates that segment to spend money; and three, act on strategies that build loyalty through ongoing consumer engagement. All Rights Reserved. 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. While companies are increasingly using environmental claims to appeal to consumers, they also attract greater scrutiny. not how pretty the blush is. Today, 50 percent of consumers rank sustainability as a top five value driver, said Dr. Andreas von der Gathen, co-CEO of Simon-Kucher. 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. For more details, review our .chakra .wef-12jlgmc{-webkit-transition:all 0.15s ease-out;transition:all 0.15s ease-out;cursor:pointer;-webkit-text-decoration:none;text-decoration:none;outline:none;color:inherit;font-weight:700;}.chakra .wef-12jlgmc:hover,.chakra .wef-12jlgmc[data-hover]{-webkit-text-decoration:underline;text-decoration:underline;}.chakra .wef-12jlgmc:focus,.chakra .wef-12jlgmc[data-focus]{box-shadow:0 0 0 3px rgba(168,203,251,0.5);}privacy policy. When expanded it provides a list of search options that will switch the search inputs to match the current selection. 75% of millennials are willing to pay extra for sustainable products.3Coffee cups, palm oil, and single-use plastics are some recent products to face public discussion, which leaves businesses rethinking both the sustainability of their materials and processes, and the environmental impact and recyclability of their products. GreenPrint is a global environmental technology company, offering sustainability as a service with patent-protected programs that deliver environmental impact and bottom-line results. When browsing beauty products, my first question is, "Is it cruelty-free?" New York-based Nielsen forecasts the market to reach somewhere between $142.4 billion and $150.1 billion by 2021. "Share of consumers who were willing to pay more for sustainable goods in China as of November 2022, by category." By 2021, consumers are expected to spend $150 billion on sustainable goods. 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. Most important, products marketed as sustainable grew 5.6 times faster than those that were not. Some brands are even moving beyond simply eco-friendly and now seek to claim their products are climate-neutral. Academic research has consistently identified this gap between purchase intentions and behaviours. Broadcasting sustainability would capture an untapped consumer base but also sow distrust, said Pete Davis, CEO and Co-Founder of GreenPrint. Consumersparticularly Millennialsincreasingly say they want brands that embrace purpose and sustainability. statistic alerts) please log in with your personal account. 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. When it comes to sales intent, commitment to the environment has the power to sway product purchase for 45% of consumers surveyed. It also found that 73% of global Millennials are willing to pay extra for sustainable offerings up from 50% in 2014. As economists say, as price lowers, our willingness and ability to buy an item increase. Saving biodiversity: why our mental and physical health depends on it. Its about exploring your trustworthy methods of communication, then selecting one that aligns with your objectives.. While the demand for such products remains low, the price remains high. Indeed, one recent report revealed that certain categories of products with . I recently spent $38 on a t-shirt from abrand I would trust with my life: Janne Robinson. 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. For years, brand managers have groused that consumers say they intend to buy sustainable products but dont actually buy them. 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. On average, more than a one third (34 percent) of the population is willing to pay more for sustainable products or services, and those willing to pay more would accept a 25 percent premium on average. 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. What do these findings mean for corporate managers and investors? Sustainability-marketed products are growing quickly in almost all CPG categories. 9. A majority of people have doubts when companies say they are environmentally friendly, with 53% of Americans never or only sometimes believing such claims. Wed suggest they follow the data. That across the board, consumers are willing to pay extra for one thing: sustainability. 74% would switch gasoline brands in the same situation. Green consumption includes more environmentally friendly raw materials, packaging and production methods, lower carbon emissions during transportation and use, and better protection for people involved in production and trade. Defending and preserving our planet is not only the right thing to do, its good business. A weekly update of the most important issues driving the global agenda. Get the full study Join Your Peers In a study of more than 21,000 US households, Nielsen analyzed consumers' attitudes towards various sustainable attributes across 13 product categories. This desire for sustainable products among Gen Z is robust. Millennials want to know what companies are doing to make the world a better place. This is especially true for Millennials. 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. The relative importance of sustainability during the purchase process will continue to increase. 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. By comparison, 51% of Boomers (ages 50-64) said that they would pay a premium for sustainable products. Seventh Generation, Sundial Brands, and Pukka Herbs. The study also found a large degree of mistrust about companies environmental claims. 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. Topping the list of sustainability factors that influence purchasing for nearly two-of-three (62%) consumers globally: brand trust. 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. Millennials already played a significant . 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.. zharris@prosek.com, Internet Explorer presents a security risk. Commitment to social and environmental responsibility is surpassing some of the more traditional influences for many consumers. We made no attempt to assess if products marketed as sustainable were, in fact, sustainable. 2023 Nielsen Consumer LLC. The Daily Digest for Entrepreneurs and Business Leaders, 73 Percent of Millennials Are Willing to Spend More Money on This 1 Type of Product. 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. 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. Consumer-goods brands that fail to take this into account will likely fall behind.. But the results should be interpreted cautiously. 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).. 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 . To ensure the most secure and best overall experience on our website, we recommend the latest versions of. A new study, looking at the sales from 2013 to 2018 of products marketed as sustainable, finds the conventional wisdom isnt true. 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%. Surface Studio vs iMac - Which Should You Pick? This page does not exist in [x], feel free to read the page you are currently on or go to the [x] homepage. In a study byHorizon Medias Finger on the Pulse, 81 percent of Millennials expect companies to make a public commitment to good corporate citizenship.. Accessed March 02, 2023. https://www.statista.com/statistics/1367681/china-consumers-willingness-to-pay-more-for-sustainable-goods/, Deloitte. Among millennials,. Please create an employee account to be able to mark statistics as favorites. Our analysis looked at products on-pack communication about their sustainability. 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. Millennials and Gen Z are becoming a force to be reckoned with as they continue to represent a larger share of the consumer demographic. But brands can nudge consumers towards more eco-friendly products. 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). 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. Queensland University of Technology apporte un financement en tant que membre adhrent de TheConversation AU. In one survey, 66% of all respondents, and 75% of millennial respondents, said they consider sustainability when making a purchase. Corporate leadership should no longer give brand managers a pass when they claim that there is no demand for sustainable products. 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%). Consumers care about sustainabilityand back it up with their wallets, Five Ws and one H to mastering your category, Consumer Outlook 2023: The unsettled state of global consumers, Communication led by service advisors helps drive satisfaction with aftersales process in India, Do not sell or share my personal information. 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. In 2018, that number had risen to about 85% . Available: https://www.statista.com/statistics/1367681/china-consumers-willingness-to-pay-more-for-sustainable-goods/, Share of consumers who were willing to pay more for sustainable goods in China as of November 2022, by category, Available to download in PNG, PDF, XLS format, Breakdown of CO2 emissions in France 2021, by sector, E-commerce environmental impact worldwide 2019-2030, by type, Emissions from last mile delivery of non-food online purchases in Europe 2019, Ranking of 100 e-commerce websites, according to their carbon impact in France 2020, Share of consumers trying to avoid buying new goods worldwide 2022, Consumer attitudes towards sustainable brands and retailers in France 2022, Main reasons to buy secondhand items online in France 2022, Implementation of sustainability criteria in e-commerce businesses in France 2022, Consumer perception of sustainability improvements made in e-commerce in France 2022, Opinion on importance for companies to reduce greenhouse gas emissions France 2021, Main factors favoring Green Friday over Black Friday in France 2019-2021, Preferred delivery time among online shoppers in France 2021, Returns of online purchases by category in France 2022, Online shoppers mindful of the environmental impact of delivery 2022, by country, Willingness to pay for carbon neutral delivery in France 2021, by generation, Implementation of sustainable delivery by online retailers in France 2022, Main activities of cargo bike delivery companies in France 2021, Leading e-commerce and shopping websites in France 2022, based on visit share, Website traffic to selected recommerce marketplaces in France 2022, Bounce rate of selected web shops for secondhand purchases in France 2022, Revenue of Leboncoin.fr in France 2015-2021, Marketplace revenue of Cdiscount.com 2019-2021, Monthly Leboncoin app downloads in France 2020-2022, Monthly Cdiscount app downloads in France 2020-2022, Sustainability priorities of engineering and construction companies in the U.S. 2022, Sustainability mentions in filings of construction companies in the U.S. 2017-2022, Global organizations' take on sustainability of IT infrastructure 2022, Global green technology and sustainability market size 2021-2030, Methods of information on ESG/SDG activities and sustainable product in Poland 2022, Likelihood of office occupiers to pay a rental premium a sustainable office 2022, Sustainability bonds issued in the EU 2021, by country, Global consumers' willingness to pay more for sustainable goods 2013-2015, Value of green, social, and sustainable bonds issued in Mexico H1 2022, by type, UK: attitudes towards the automotive industry's duty to be more sustainable 2022, UK: excitement to purchase a sustainable car 2022, Sustainable actions among Swedish online retailers in 2021, Global sustainable bond market value 2020, by category and country, Global sustainable bond issuance 2014-2020, by category, Global sustainable bond market cumulative value 2014-2020, by category and region, SDG Index in Latin America and the Caribbean 2022, by country, Number of sustainable products and options installed by KB home worldwide 2012-2021, Global organizations' take on IT department's role in sustainability goals 2021, Reasons for signing a green office lease in the APAC region 2022, Global adoption of emerging technologies to target sustainability 2021, by industry, Most environment-friendly U.S. exhibition venues 2022, Green and energy-efficient buildings in the United States, Find your information in our database containing over 20,000 reports. 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. Ryan Rudomineris a principal at R2 Strategic Consulting where he specializes in strategic communications, advocacy, and media relations. 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 . Studies show that people are geared towards using sustainable products more than others. 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. Millennials are the most willing to pay extra for sustainable offeringsalmost three-out-of-four respondents (73%), up from approximately half in 2014. The carbon footprints of the certified products are based on international standards (ISO 14040) and verified by an independent expert. Are you interested in testing our business solutions? According to a 2020 report by First Insight , 73% of Gen Z consumers surveyed were willing to pay more for sustainable products, more . 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. It is no secret that companies must be responsive to customer demands and expectations if they want to survive. Personal values indeed. A balanced approach is key for brand communicators, with the emphasis on demonstrating good deeds versus self-serving promotion.. Some more takeaways on consumer habits: More than 8 in 10 recycle and replace lightbulbs with energy-efficient options. When looking at food items like coffee, I want to know first that it's Fair Trade. 6 takeaways from the worlds biggest cultural policy gathering, Putting Solar Panels On Farms Makes Sheep Happier. Ultimately, the research that evaluates consumers willingness to pay more for green products has been mixed. Sixty-six percent of consumers say they are willing to pay more for sustainable brandsup from 55% in 2014 and 50% in 2013. Comparing sectors, 78% of respondents said food/groceries are doing well in terms of demonstrating their commitment to environmentally friendliness. 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. This indicates an opportunity for consumer-goods brands that have already built a high level of trust with consumers to evaluate where best to introduce sustainable products into the market to drive growth, says Carol Gstalder, senior vice president, Reputation & Public Relations Solutions, Nielsen. 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. So while not all consumers will pay more for green climate-friendly products despite the best of intentions, we can slowly nudge them to make better choices for the planet. A new report reveals all. Others are working for or supporting organizations dedicated to social and environmental change. 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. 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. Again, younger generations lead the way as higher shares of Generation Z (39 percent) and Millennials (42 percent) are willing to pay for sustainability compared to Gen. X (31 percent) and Baby Boomers (26 percent). This isn't a pipe dream. 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 . In its 2015 Nielsen Global Corporate Sustainability Report, Nielson found that "66% of global consumers say they're 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. Consumers from 60 countries were surveyed for this report. According to our Consumers Buy The Change They Wish To See in The World report, we found that natural and organic ingredients and certifications serve as the entry level point for nearly every market when it comes to sustainability attributes consumers are searching for. The future for CPG, and increasingly for other categories such as apparel, is sustainable. 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. They are willing to rethink their buying habits to incorporate environmental and social product benefits into their buying decisions. While the survey respondents were answering questions . Then you can access your favorite statistics via the star in the header. Those earning $20,000 or less are actually 5% more willing than those with incomes greater than $50,000 to pay more for products and services that come from companies who are committed to positive social and environmental impact (68% vs. 63%). The U.S. sustainability market is projected to reach $150 billion in sales by 2021, according to Nielsen . 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. 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). Im seeing quite a few climate-friendly products at the supermarket. In 2014, less than 30 . . Climate Explained is a collaboration between The Conversation, Stuff and the New Zealand Science Media Centre to answer your questions about climate change. In Taiwan, for example, where 88% of surveyed consumers said that it is extremely or very important that companies implement programs to improve the environment, there is evidence of a growing trend in natural in personal care. Looking at web sites for information on business and manufacturing practices. To ensure consistent and accurate representation of the U.S. general population 18 years of age and older, data was weighted by the following variables: sex, age, geographic region, race/ethnicity, and education. According to the findings, 78% of people are more likely to purchase a product that is clearly labeled as environmentally friendly. Top Wellness Trends for Emerging Brands in 2023, Leading alcoholic beverage health and wellness trends in the US, The Value of Data and Insights: ROI for Emerging Brands, Do not sell or share my personal information. 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. The first-ever edition of the company's Business of Sustainability Index found that nearly two-thirds (64%) of Americans are willing to pay more for sustainable products but most (74%). 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. 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. 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. A survey of 51 retail senior-level . 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).
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