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Consumer Preferences Continue to Shift Toward Sustainability, Market Research Shows

Julia Wilson headshotWords by Julia Wilson
Investment & Markets
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Sustainability is no longer a niche function of big companies with a reputation to protect.

This isn’t news to anyone monitoring this year’s headlines thus far. What’s remarkable, though, is the role that everyday consumers have in pushing sustainability into the mainstream.

Brands large and small—from startups to centuries-old stalwarts, from brick-and-mortar to online natives—have collectively come to recognize the market potential that sustainability represents, not just as a business imperative but also as a market requirement originating with savvy consumers. And no matter if you’re a consumer-facing manufacturer, retailer, media company or supplier, transparency rules the day.

Consumers care about sustainability


According to a recent survey conducted by Nielsen, 81 percent of global consumers say it's extremely or very important for companies to implement programs to improve the environment. Consumers in many emerging markets feel even more strongly about this, with India (97 percent) and Colombia (96 percent) at the top.

And it’s not just about what consumers say is important for companies to do—73 percent of respondents said they would either definitely or probably change their consumption habits to reduce their impact on the environment, while 38 percent said they would pay higher-than-average prices for products made with sustainable materials.

Sustainability is clearly important to consumers. But what one says and what one does at the point of purchase or e-commerce checkout are often different.

Consumers vote with their wallets when it comes to their sustainability preferences, just like any other attribute. But they aren’t consistent in their behavior—what they care about varies widely by category and claim. That’s where Nielsen's recent research into consumer purchase behavior comes in. In another recent report, we found that products with sustainability claims in three categories grew twice as fast as the total category dollar growth for each. Chocolate (+16 percent vs. +5 percent), coffee (+1 percent vs. -1 percent) and bath products (+14 percent vs. +1 percent) with certain sustainability claims grew faster in sales compared to their total categories.

Whether you’re a brand manager, marketer or sustainability professional, it’s up to you to invest in the relevant sustainability aspects for your business to make sure you deliver on consumer expectations.

Sustainability at the shelf


The popularity of natural products is surging as consumers grow more conscious about what they put into their bodies and the effect these products have on our broader world. Increasingly, this focus on prioritizing what’s both “healthy for me” and “healthy for we”—the planet, other people, one’s local community—is contributing to consumer interest in product and ingredient transparency.

Take Taiwan as an example. A recent analysis of Nielsen retail sales data in Taiwan indicated that natural products were seeing growth in otherwise declining categories. For instance, while the overall shampoo category saw declines of 3.4 percent, there was a 2.2 percent growth in the natural shampoo category. In a category with an 11.2 percent value share, catering to consumer demand for a more sustainable shampoo not only benefits the environment, but also the bottom line of companies smart enough to give these shoppers what they want. Similar sentiments can be seen in the sales figures for shower gel, where the overall category saw a decline of 0.8 percent, but natural shower gel experienced a whopping 80 percent growth, in a category with 10.3 percent value share.

Not all sustainability trends are so easy to spot. For example, the consumers who seek out hormone-free eggs at the supermarket might not also prioritize clean ingredients in their pasta sauce. Tailored insights are the key to uncovering what sustainability trends mean for a specific business, consumer segment or product category.

For example, why did 68 percent of U.S. survey respondents say it is extremely or very important that companies implement programs to improve the environment, a figure that’s 13 percent lower than the global response? There is compelling evidence to suggest that, as consumers grow more sophisticated about sustainability, their concerns become increasingly niche—which creates a more competitive landscape.

In developed markets, “natural” simply doesn’t cut it. Companies that speak to specificities and avoid generalities stand to benefit greatly. For instance, recent Nielsen Product Insider figures for animal welfare claims showed that “farm raised” and “farmed seafood” categories saw declines of 19 percent and 4 percent, respectively, while their more specific counterparts—“grass fed” (+24 percent), “free range” (+22 percent) and “dolphin safe” (+4 percent)—saw major growth.

What does sustainability mean today?


Our collective definition of sustainability has continued to expand and evolve over time. No longer relegated to environmental considerations, sustainability can be inclusive of everything from recyclable packaging, to water and air pollution, to responsible business and supply chain practices—and plenty more.

Depending on your industry, geography and consumer base, there are specific sustainability indicators that are of greatest relevance to your particular business. Make sure your teams have a clear understanding of what these are and how all functions work together to ensure that sustainability is infused throughout your journey, from brainstorming a new product all the way through to its placement on the shelf.

This is an opportunity to build trust and engage with your customers and other stakeholder groups to enable a positive long-term relationship and mutually-beneficial dialogue between consumers and your brand. To that end, your sustainability strategy should be real, multi-dimensional, and ultimately create value for the world through your business practices, operations, supply chain and products.

For most brands, sustainability is no longer an optional exercise, but rather a call-to-action that consumers expect all companies to hear—and quickly. Consider the recent movement to go strawless. What started as an announcement from one company quickly grew into a cavalcade of companies adding their voices to the chorus. Today, a still-growing group of companies like Starbucks, Marriott, American Airlines and Disney have committed to ban plastic straws. A single pledge quickly grew into a sustainability movement, with consumers’ changing preferences at the heart of the story.

Call to action


Time is of the essence, and increased action and activation on the part of consumers and companies is needed—now. As Scientific American recently reported, there are only 60 more years of farming left if soil degradation continues around the world. The negative effects of climate change and business practices that deplete our resources, rather than regenerate them, are real. In our increasingly resource-constrained world, it’s critical that all companies do their part across the triple bottom line of people, planet and profits.

Ensuring the sustainability of your company’s products to meet consumer demand is one critical piece to enabling—and growing—our sustainable future.

Julia Wilson headshotJulia Wilson

Julia Wilson is Director of Global Responsibility & Sustainability at Nielsen, where she is responsible for its global environmental, social and governance (ESG) strategy, ongoing stakeholder engagement, and external reporting. She was a recipient of City & State NY’s “Responsible 100” for 2017.

Read more stories by Julia Wilson