So when it comes to purchasing, they are doing their homework. Feb 28, 2023. Create a free account and access your personalized content collection with our latest publications and analyses. This is the result of a representative survey that we commissioned from INNOFACT. And companies with strong reputations outperform others when it comes to attracting top talent, investors, community partners, and importantly, consumers.. Simple economies of scale also impact on price. 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. In 1989, 67% of American consumers stated that they were willing to pay 5 - 10% more for sustainable products. On the flip side, large global consumer-goods brands that ignore sustainability increase reputational and business risk. 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. The U.S. sustainability market is projected to reach $150 billion in sales by 2021, according to Nielsen . 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. To ensure the most secure and best overall experience on our website, we recommend the latest versions of. lire aussi : Statista. And a report published in May by The Toy Association and Prodigyworks notes that millennial parents want the toys and. An online survey of more than 1,000 consumers took place in July and found 68% of respondents said they were willing to pay more for sustainable products. "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 offerings--almost three-out-of-four respondents," says Nielsen. The report, "Doing Well by Doing Good," found that most consumers are willing to pay more money for good and services that are sustainable. When looking at food items like coffee, I want to know first that it's Fair Trade. Academic research has consistently identified this gap between purchase intentions and behaviours. 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. 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. All these terms are used in labelling to make us feel good if we buy products claimed to minimise harm to the planet and the environment. Voir les partenaires de TheConversation France. 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). Commitment to social and environmental responsibility is surpassing some of the more traditional influences for many consumers. Mr. Davis said of the survey: Companies must build trust and loyalty by clearly demonstrating that they share environmental goals with their customers. 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. Even toys can get the climate-friendly treatment. As companies look to break into new markets, they must understand that each market demands its own approach. 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. 2023 Nielsen Consumer LLC. The carbon footprints of the certified products are based on international standards (ISO 14040) and verified by an independent expert. 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. 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. Original survey question: How much of a premium are you willing to pay for green consumption (i.e. This figure is even higher for millennials (73%) and Generation Z (72%). For this reason, the demand for sustainable foods is growing in the market. 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. Nature is worth $44 trillion to the global economy, according to a recent World Economic Forum estimate. 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. That across the board, consumers are willing to pay extra for one thing: sustainability. The study surveyed 10,281 consumers across 17 countries: USA (N=1,062), Germany (N=1,022), Denmark (N=771), Sweden (N=757), Brazil (N=539), China (N=516), Japan (N=516), Spain (N=515), Switzerland (N=514), UK (N=513), Australia (N=510), Austria (N=510), France (N=510), the Netherlands (N=510), Norway (N=506), Italy (N=506), UAE (N=504), including representative quotas set for age, gender, living area, education level, employment status & income level. Brands can bring their CSR efforts to life through authentic storytelling. 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%). Some brands are even moving beyond simply eco-friendly and now seek to claim their products are climate-neutral. 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. A new study, looking at the sales from 2013 to 2018 of products marketed as sustainable, finds the conventional wisdom isnt true. e-mail: rachel.pope@simon-kucher.com 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%). A new report reveals all. And according to Nielsen, I'm not alone in that. how much more are you willing to pay compared to regular goods) when purchasing the following categories? 470-788-0718 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. 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. 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. , Feb 8, 2023. "Share of consumers who were willing to pay more for sustainable goods in China as of November 2022, by category." The firm has over 1,400 employees in 41 offices worldwide. Indeed, one recent report revealed that certain categories of products with . The views expressed in this article are those of the author alone and not the World Economic Forum. 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. Saving biodiversity: why our mental and physical health depends on it. 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. In 2018, that number had risen to about 85% . www.simon-kucher.com, Internet Explorer presents a security risk. 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. lire aussi : 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. This is especially true for Millennials. Conveying CSR efforts to Millennials requires authenticity, and a unique approach as Millennials grew up with the Internet and want their voices heard. Companies that are able to navigate the business of sustainability will be best positioned for future success.. Some more takeaways on consumer habits: More than 8 in 10 recycle and replace lightbulbs with energy-efficient options. 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 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. Nielsen reported in 2014 that half of young consumers were willing to pay more for sustainable products. 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. Show publisher information Defending and preserving our planet is not only the right thing to do, its good business. Eco-friendly isnt quite so broad and defines products or practices that do not harm the Earths environment. In a study byHorizon Medias Finger on the Pulse, 81 percent of Millennials expect companies to make a public commitment to good corporate citizenship.. All rights reserved. I dream of a world in which clothing is more expensive across the board, but there are no more sweatshops anywhere, and no more slash-and-burn. 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. January 18, 2023. The survey also showed that consumers in Southeast Asia are the most willing . 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. By almost any measure, Millennials place a premium on corporate social responsibility (CSR) efforts. Georgetown University School of Continuing Studies. This statistic displays the share of consumers willing to pay extra for sustainable products in the Netherlands from 2014 to 2020. 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. 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. Businesses that under-appreciate the need for CSR do so at their peril. To ensure the most secure and best overall experience on our website we recommend the latest versions of, Internet Explorer is no longer supported. 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. But nearly 60% are unwilling to pay more money for that eco-friendly product. A majority (55%) of consumers are willing to spend extra money in order to purchase environmentally friendly products, though at differing amounts. There are several reasons for this. We are interested in estimating the proportion of all consumers willing to pay more. 43% of consumers want brands to be more aggressive about showing sustainable products on-site to further personalize their shopping experience. This button displays the currently selected search type. 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. GreenPrint is a global environmental technology company, offering sustainability as a service with patent-protected programs that deliver environmental impact and bottom-line results. 75% of Millennials are willing to pay more for an environmentally sustainable product, compared to 63% of Gen Z, 64% of Gen X, and 57% of Boomers. It can be used to help people improve their thinking and decisions. 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. For years, researchers have examined climate-oriented consumption to see if it actually wins consumer support. 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. Millennials are the most willing to pay extra for sustainable offeringsalmost three-out-of-four respondents (73%), up from approximately half in 2014. Our analysis looked at products on-pack communication about their sustainability. In fact, an analysis of retail sales data indicated that natural products were seeing growth in otherwise declining categories. 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. Companies across industries have . As soon as this statistic is updated, you will immediately be notified via e-mail. On a global scale, the percentage of consumers willing to pay a premium for. 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. In 2015, brands who showed a commitment to sustainability saw sales grow more than 4% globally. Please do not hesitate to contact me. They wanted to know more about what influences how people feel about brands, and how those feelings impact buying behavior. And as social media channels continue to burgeon, the voice of younger generations will only increase the demand for sustainability. Consumers want #sustainable packaging - and most of them would pay more for it. In a free market economy, it is very difficult to force people to pay more for products. Commercial research says 46% of consumers are more inclined to buy a product if it is eco-friendly. Are consumers willing to pay more for these? They expect a two-way, open dialogue with companies and their brands. In burgeoning sustainability markets, however, natural and organic are paving the way for more detailed and specific claims. GreenPrint, A Public Benefit Corporation, is on pace to offset over 30 million metric tons of carbon by 2025. Currently, you are using a shared account. Globally, sustainability is rated as an important purchase criterion for 60 percent of consumers. But the results should be interpreted cautiously. We examined over 36 categories and more than 71,000 SKUs, which accounted for 40% of CPG dollar sales over the five-year period. That said, some of those categories saw high growth in sustainability-marketed products sanitary napkins and laundry care were among the highest, at 150%. 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. Many sustainable trends in new markets start with beauty and personal care. In 2015, Nielsen polled 30,000 consumers in 60 countries around the world. They accounted for 16.6% of the market in 2018, up from 14.3% in 2013, and delivered nearly $114 billion in sales. Tech is close behind at 74%, while gas stations and convenience stores rank lower at 51% and 54% respectively. Consumers are willing to pay more for greener products and want producers to provide better climate-related on-label packaging. Corporate leadership should no longer give brand managers a pass when they claim that there is no demand for sustainable products. Already in 2015, a Nielsen report found that 73 percent of the Millennial generation was willing to pay more for sustainable goods. This statistic reveals a significant shift in consumer behavior and highlights the importance of sustainability in marketing to this eco-conscious generation. Consumer concern about the environment does not readily translate into the purchase of environmentally friendly products. And investors should support companies in making the investments needed for the pivot. 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. 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. This statistic presents the results of an online survey conducted from February 17 to March 7, 2014. It can be done. 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%. tel. This desire for sustainable products among Gen Z is robust. 6 takeaways from the worlds biggest cultural policy gathering, Putting Solar Panels On Farms Makes Sheep Happier. 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