The rise of sustainable disruptors and increasing consumer awareness will all serve to drive the expectation for affordable sustainable alternatives.. 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. It's not just a morally good idea, either; it's lucrative. 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%. 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. By 2021, consumers are expected to spend $150 billion on sustainable goods. Prosek Partners 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%. A balanced approach is key for brand communicators, with the emphasis on demonstrating good deeds versus self-serving promotion.. Original survey question: How much of a premium are you willing to pay for green consumption (i.e. I recently spent $38 on a t-shirt from abrand I would trust with my life: Janne Robinson. The report, "Doing Well by Doing Good," found that most consumers are willing to pay more money for good and services that are sustainable. 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 . January 18, 2023. 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. Sustainability sentiment is particularly consistent across income levels. Professor of Marketing and Consumer Behaviour, Queensland University of Technology. Our eBook "What ESG means to you and your consumers in 2022" is designed to help The best of the best: the portal for top lists & rankings: Strategy and business building for the data-driven economy: Industry-specific and extensively researched technical data (partially from exclusive partnerships). 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. 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. For this group, personal values are more important than personal benefits, such as cost or convenience. 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. We made no attempt to assess if products marketed as sustainable were, in fact, sustainable. 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. And as social media channels continue to burgeon, the voice of younger generations will only increase the demand for sustainability. Looking at web sites for information on business and manufacturing practices. 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%). 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%). tel. Its hard to ignore the siren call to protect the planet. 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. This conventional wisdom has been used by many brands as justification for not making their products more sustainable. Environmental Choice New Zealand is the official environmental label body that awards certificates and lists environmentally friendly products for green homes or businesses. 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 . But brands can nudge consumers towards more eco-friendly products. 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. lire aussi : Both are good tools for building trust. 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. The shift in consumer buying, where more consumers are willing to pay more for environmentally conscious products, underscores the need for manufacturing companies to enhance their commitment to responsible business practices using technologies that support more sustainable product design and development. Georgetown University School of Continuing Studies. 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. Millennials already played a significant . Simple economies of scale also impact on price. To ensure the most secure and best overall experience on our website we recommend the latest versions of, Internet Explorer is no longer supported. Nielsen combines sustainability into free-from, clean, simple, sustainable and . Are you making an effort to reach these socially conscious young people? Personal values indeed. The Nielsen Global Survey on Corporate Social Responsibility polled more than 29,000 Internet respondents in 58 countries. Conveying CSR efforts to Millennials requires authenticity, and a unique approach as Millennials grew up with the Internet and want their voices heard. 50% of CPG growth from 2013 to 2018 came from sustainability-marketed products. Globally, sustainability is rated as an important purchase criterion for 60 percent of consumers. Our analysis looked at products on-pack communication about their sustainability. Chart. It is no secret that companies must be responsive to customer demands and expectations if they want to survive. 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. Percentage points exceeding 100 percent are probably due to rounding. 5 Ways to Connect Wireless Headphones to TV. 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. Businesses must adapt to the times as consumers . 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. Commercial research says 46% of consumers are more inclined to buy a product if it is eco-friendly. Please do not hesitate to contact me. 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. 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. Climate-friendly defines products that reduce damage specifically to the climate. Most important,. 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. Commercial research says 46% of consumers are more inclined to buy a product if it is eco-friendly. It can be done. 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.". 315-409-9435 In fact, an analysis of retail sales data indicated that natural products were seeing growth in otherwise declining categories. According to a recent survey, 73% of Gen Zers are willing to pay more for sustainable products. 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. Topping the list of sustainability factors that influence purchasing for nearly two-of-three (62%) consumers globally: brand trust. The rise in the percentage of respondents under 20, also known as Generation Z, who are willing to pay more was equally strongfrom 55% of total respondents in 2014 to 72% in 2015. 9. They found that: 61% of consumers would be willing to pay more for eco-friendly DIY products. This figure is even higher for millennials (73%) and Generation Z (72%). One overwhelming conclusion of the report? We help our clients achieve growth and profit targets by applying practical, evidence-based strategies. 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. Accessed March 02, 2023. https://www.statista.com/statistics/1367681/china-consumers-willingness-to-pay-more-for-sustainable-goods/, Deloitte. In China, 41% of consumers say that they want eco-friendly products. Its about exploring your trustworthy methods of communication, then selecting one that aligns with your objectives.. 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. This sum will continue to grow exponentially as more Millennials reach peak buying power. 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. Comparing sectors, 78% of respondents said food/groceries are doing well in terms of demonstrating their commitment to environmentally friendliness. Nudge theory is used to understand how people think, make decisions and behave. If you have a question youd like an expert to answer, please send it to climate.change@stuff.co.nz. To ensure the most secure and best overall experience on our website, we recommend the latest versions of. A paid subscription is required for full access. As a Premium user you get access to the detailed source references and background information about this statistic. , Feb 8, 2023. Nielsen reported in 2014 that half of young consumers were willing to pay more for sustainable products. Companies have used this conventional wisdom as justification for not making their products more sustainable. As soon as this statistic is updated, you will immediately be notified via e-mail. 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). Says Gstalder: While marketing good deeds is encouraged and expected by consumers, authenticity and credibility are essential. 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. For years, brand managers have groused that consumers say they intend to buy sustainable products but dont actually buy them. 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. e-mail: rachel.pope@simon-kucher.com The carbon footprints of the certified products are based on international standards (ISO 14040) and verified by an independent expert. In 2014, less than 30 . The future for CPG, and increasingly for other categories such as apparel, is sustainable. About a 3 minute read. For years, researchers have examined climate-oriented consumption to see if it wins peoples support. More than half (56%) of Americans would use a credit card that could calculate and offset the environmental footprint of products purchased. While the demand for such products remains low, the price remains high. Statista. All Rights Reserved. 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. As companies look to break into new markets, they must understand that each market demands its own approach. Design 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. 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. As economists say, as price lowers, our willingness and ability to buy an item increase. Sixty-six percent of consumers say they are willing to pay more for sustainable brandsup from 55% in 2014 and 50% in 2013. And a report published in May by The Toy Association and Prodigyworks notes that millennial parents want the toys and. Access to this and all other statistics on 80,000 topics from, Show sources information For years, researchers have examined climate-oriented consumption to see if it actually wins consumer support. In 1989, 67% of American consumers stated that they were willing to pay 5 - 10% more for sustainable products. 76% of Americans would switch their preferred packaged goods brand if they were offsetting carbon emissions. 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. 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 . 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. Show publisher information Companies should be aware that consumers are increasingly voting with their dollars against unsustainable brands. 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. The relative importance of sustainability during the purchase process will continue to increase. More demand would mean more production and lower unit price costs. 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. All Rights Reserved. "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. (January 18, 2023). What is the Green List and how can it help protect the worlds natural wonders? Many sustainable trends in new markets start with beauty and personal care. lire aussi : The survey is conducted among 48 percent of female and 52 percent male respondents. Sixty-six percent of global respondents say they are willing to pay more for sustainable goods, up from 55% in 2014 (and 50% in 2013). Im seeing quite a few climate-friendly products at the supermarket. On Earth Day 2020, the organisation Climate Neutral an independent non-profit organisation working to decrease global carbon emissions confirmed 103 brands had completed its certification process in 2020 and 50 other brands were still in the process. Some of the necessary transformation can be accomplished by reinventing legacy products, as Unilever has shown with its sustainable living brands, now delivering 70% of its turnover growth. This shows that sustainability has been on consumers' minds for quite. Tech is close behind at 74%, while gas stations and convenience stores rank lower at 51% and 54% respectively. In the US, this number is just over the global average at 61 percent. 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. In more than 90% of consumer packaged goods categories, sustainability-marketed products grew faster than their conventional counterparts. The Consumer Sustainability Survey (2019) found that 72% of consumers buy more environmentally-friendly products than five years ago. 6 takeaways from the worlds biggest cultural policy gathering, Putting Solar Panels On Farms Makes Sheep Happier. While attitudes vary across generations, countries, and industries, 85% of consumers have become greener in their purchasing in recent years. Across industries, willingness to pay for sustainability is highest in Consumer goods (38 percent), and lowest for Energy/utilities (31 percent). This statistic presents the results of an online survey conducted from February 17 to March 7, 2014. 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. Ryan Rudomineris a principal at R2 Strategic Consulting where he specializes in strategic communications, advocacy, and media relations. So it appears that some categories that are behind in sustainability-marketed product share are making up for lost time. 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. Sustainability-Marketed product share are making up for lost time i recently spent $ 38 on t-shirt... Want to survive how much of a premium are you willing to pay for green (! To ensure the most secure and best overall experience on our website, we recommend the latest versions.... 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