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. As CPG sales spiked . This desire for sustainable products among Gen Z is robust. For example, one study found Spanish consumers were willing to pay 22-37 per cent more for green products, but Japanese consumers were only willing to pay 8 per cent to 22 per cent more for . 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. 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. 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 What do these findings mean for corporate managers and investors? But research continues to show few consumers who report positive attitudes toward eco-friendly products actually follow through with their wallets. More demand would mean more production and lower unit price costs. Ultimately, the research that evaluates consumers willingness to pay more for green products has been mixed. 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. "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. 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. I recently spent $38 on a t-shirt from abrand I would trust with my life: Janne Robinson. Over 30,000 people in 60 countries were polled about their purchasing habits, and 66% of respondents said that they were willing to pay more for products and services from companies who are As a result, many consumers have adopted more sustainable behaviors. 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 . Companies have used this conventional wisdom as justification for not making their products more sustainable. Sustainability-marketed products are growing quickly in almost all CPG categories. For years, researchers have examined climate-oriented consumption to see if it wins peoples support. A 2015 global survey by Nielsen found that 66 per cent of respondents were willing to pay more for sustainable goods. 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. GreenPrint As a Premium user you get access to the detailed source references and background information about this statistic. Already in 2015, a Nielsen report found that 73 percent of the Millennial generation was willing to pay more for sustainable goods. Those that had no such commitment grew less than 1%. 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%. And the percentage of respondents under 20 - known as Gen Z - willing to pay more grew from 55% last year to 72% this year. Studies show eco-friendly logos and labels can be used to nudge consumers toward sustainable fashion, food consumption and eco-friendly offerings. As companies look to break into new markets, they must understand that each market demands its own approach. A new study, looking at the sales from 2013 to 2018 of products marketed as sustainable, finds the conventional wisdom isnt true. For years, brand managers have groused that while consumers say they intend to buy sustainable products, in store they dont actually purchase them. . By comparison, 51% of Boomers (ages 50-64) said that they would pay a premium for sustainable products. 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). Millennials are the most willing to pay extra for sustainable offeringsalmost three-out-of-four respondents (73%), up from approximately half in 2014. According to a June 2014 Nielsen study , 55% of global online consumers "are willing to pay more for products and services from companies that are committed to positive social and environmental impact." In fact, as early as 1992, the European Commission established the EU Ecolabel , a Europe-wide voluntary environmental labeling scheme that . To ensure the most secure and best overall experience on our website we recommend the latest versions of, Internet Explorer is no longer supported. Defending and preserving our planet is not only the right thing to do, its good business. Consumers from 60 countries were surveyed for this report. Image:Caleb Jones/Unsplash. Rudominers lifelong passion is using communication to foster social change. Accessed March 02, 2023. https://www.statista.com/statistics/1367681/china-consumers-willingness-to-pay-more-for-sustainable-goods/, Deloitte. Why cities should be fully recognized stakeholders within the UN system, This Architect Says Sustainable Timber Could Be The Future Of Our Cities, 3 solutions helping net-zero aviation take off, is affecting economies, industries and global issues, with our crowdsourced digital platform to deliver impact at scale. not how pretty the blush is. Indeed, one recent report revealed that certain categories of products with . Nielsen's most recent Global Sustainability Report found that 66 percent of consumers said they were willing to pay more for sustainable brands, up from 55 percent in 2014. . While attitudes towards sustainability vary between generations, they also vary across countries -- when looking at consumers who have either made significant changes to their purchasing behavior or completely changed their way of living to be more sustainable, Austria leads the way (42 percent), followed by Italy (41 percent), Spain (35 percent) and Germany (34 percent). Globally, sustainability is rated as an important purchase criterion for 60 percent of consumers. 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. Retail data backs up the importance of these influencers. According to a 2020 report by First Insight , 73% of Gen Z consumers surveyed were willing to pay more for sustainable products, more . GreenPrint is a global environmental technology company, offering sustainability as a service with patent-protected programs that deliver environmental impact and bottom-line results. But the results should be interpreted cautiously. Are consumers really willing to pay more for sustainable products? 470-788-0718 Social responsibility is a critical part of proactive reputation management. The views expressed in this article are those of the author alone and not the World Economic Forum. Consumers are voting with their dollars against unsustainable brands. Consumersparticularly Millennialsincreasingly say they want brands that embrace purpose and sustainability. .chakra .wef-facbof{display:inline;}@media screen and (min-width:56.5rem){.chakra .wef-facbof{display:block;}}You can unsubscribe at any time using the link in our emails. Michele Koch You can unsubscribe at any time using the link in our emails. Good Environmental Choice Australia is a similar organisation. In 2015, brands who showed a commitment to sustainability saw sales grow more than 4% globally. In burgeoning sustainability markets, however, natural and organic are paving the way for more detailed and specific claims. This button displays the currently selected search type. 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. ATLANTA--(BUSINESS WIRE)--Americans are seeking out and are willing to pay a premium for environmentally friendly products, according to a new study from GreenPrint, an environmental technology company. They accounted for 16.6% of the market in 2018, up from 14.3% in 2013, and delivered nearly $114 billion in sales. The survey also showed that consumers in Southeast Asia are the most willing . Consumers' demand for sustainable products is increasing. All rights reserved. 6 takeaways from the worlds biggest cultural policy gathering, Putting Solar Panels On Farms Makes Sheep Happier. The firm has over 1,400 employees in 41 offices worldwide. 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%. A majority (55%) of consumers are willing to spend extra money in order to purchase environmentally friendly products, though at differing amounts. Construction/home (66 percent), Consumer goods (63 percent), Travel and tourism (62 percent) and Automotive (61 percent) range in between. 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. 315-409-9435 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. When looking at food items like coffee, I want to know first that it's Fair Trade. For additional market-level insights, read or Unpacking the Sustainability Landscape report. Are consumers willing to pay more for these? 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. Using multiple communication methods is important to demonstrate good deeds, such as third-party validation (news coverage), annual reports, affiliation with a respected non-profit or civic organization, employee volunteerism, advertising, or reporting actual work in the community on a web site. The U.S. sustainability market is projected to reach $150 billion in sales by 2021, according to Nielsen . Simon-Kucher & Partners, Strategy & Marketing Consultants: Simon-Kucher & Partners is a global consulting firm specializing in TopLine Power. I don't dream of a world in which I can get a shirt for $3.99 just for the sake of that. You need at least a Starter Account to use this feature. Companies across industries have . That's why we're seeing a shift towards sustainable farming, farm-to-table, and organic botanical ingredients.". More than half (56%) of Americans would use a credit card that could calculate and offset the environmental footprint of products purchased. Nielsen combines sustainability into free-from, clean, simple, sustainable and . , Feb 8, 2023. 77% of Americans are concerned about the environmental impact of products they buy. Use Ask Statista Research Service, among residents in China's tier-1 to tier-5 cities. In the US, this number is just over the global average at 61 percent. 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). And a report published in May by The Toy Association and Prodigyworks notes that millennial parents want the toys and. 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. 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. A willingness to pay more for "sustainable" 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. tel. We are interested in estimating the proportion of all consumers willing to pay more. This figure is even higher for millennials (73%) and Generation Z (72%). 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. We examined over 36 categories and more than 71,000 SKUs, which accounted for 40% of CPG dollar sales over the five-year period. The Nielsen Global Survey of Corporate Social Responsibility and Sustainability was conducted between Feb. 23-March 13, 2015, and polled more than 30,000 consumers in 60 countries throughout Asia-Pacific, Europe, Latin America, the Middle East, Africa, and North America. Both are good tools for building trust. This behaviour isn't just limited to the wealthy in big economies. 2015 Nielsen Global Corporate Sustainability Report, 2015 Cone Communications Millennial CSR Study. Some brands are even moving beyond simply eco-friendly and now seek to claim their products are climate-neutral. The Generational Gap: Younger consumers are more actively taking steps towards being more sustainable. 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%). 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. zharris@prosek.com, Internet Explorer presents a security risk. 2023 Nielsen Consumer LLC. Brands that actively reinforce societal commitment must amplify and socialize their message using multiple sources and distribution channels. They found that: 61% of consumers would be willing to pay more for eco-friendly DIY products. IRIs data comes from bar scan codes at retail checkout in food, drug, dollar, and mass merchandisers. 9. To use individual functions (e.g., mark statistics as favourites, set And investors should support companies in making the investments needed for the pivot. This is the result of a representative survey that we commissioned from INNOFACT. Professor of Marketing and Consumer Behaviour, Queensland University of Technology. "Share of consumers who were willing to pay more for sustainable goods in China as of November 2022, by category." An international study of 20,000 customers by grocery brand giant Unilever identified one in three (33%) people were choosing to buy from brands they believe are doing environmental good. Commitment to the environment has the power to sway product purchase for 45% of consumers surveyed. 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. ", Deloitte, Share of consumers who were willing to pay more for sustainable goods in China as of November 2022, by category Statista, https://www.statista.com/statistics/1367681/china-consumers-willingness-to-pay-more-for-sustainable-goods/ (last visited March 02, 2023), Share of consumers who were willing to pay more for sustainable goods in China as of November 2022, by category [Graph], Deloitte, January 18, 2023. 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 make up the fastest growing force in the marketplace. The hierarchy among drivers of consumer loyalty and brand performance is changing, says Farraj. 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 . Nielsen's 2014 Global Survey on Corporate Social Responsibility, released Tuesday, shows that 55 percent of global online consumers across 60 countries are willing to pay more for products and services from companies that are committed to positive social and environmental impact. So when it comes to purchasing, they are doing their homework. Millennials already played a significant . And according to Nielsen, I'm not alone in that. You need a Statista Account for unlimited access. 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 of more than 21,000 US households, Nielsen analyzed consumers' attitudes towards various sustainable attributes across 13 product categories. 2023 Nielsen Consumer LLC. This isn't a pipe dream. Nearly three . Notably, those two companies are doing so despite the strident objections of investors who criticized Indra Nooyi and Paul Polman, the former CEOs of PepsiCo and Unilever, respectively, for moving away from their traditional brands. .chakra .wef-10kdnp0{margin-top:16px;margin-bottom:16px;line-height:1.388;}What is the World Economic Forum doing about the circular economy? 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. 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. Design In a study byHorizon Medias Finger on the Pulse, 81 percent of Millennials expect companies to make a public commitment to good corporate citizenship.. The carbon footprints of the certified products are based on international standards (ISO 14040) and verified by an independent expert. According to Nielsen, 66% of all consumers are willing to pay more for sustainable brands. Directly accessible data for 170 industries from 50 countries and over 1 million facts: Get quick analyses with our professional research service. You can only download this statistic as a Premium user. This statistic reveals a significant shift in consumer behavior and highlights the importance of sustainability in marketing to this eco-conscious generation. A fresh one is out from McKinsey & Company and Nielsen IQ - and the punchline is that making and 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. While attitudes vary across generations, countries, and industries, 85% of consumers have become greener in their purchasing in recent years. Minds can be changed, laws can be changed, and companies can be changed. As US psychologist Icek Ajzen wrote: Actions, then, are controlled by intentions, but not all intentions are carried out . This creates both future challenges and opportunities for all companies as the world becomes more sustainable. 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. Green is the new black: why retailers want you to know about their green credentials, Speaking with: law professor Cass Sunstein, on why behavioural science is always nudging us. Younger shoppers are the most willing to. Green is the new black: why retailers want you to know about their green credentials. Original survey question: How much of a premium are you willing to pay for green consumption (i.e. Saving biodiversity: why our mental and physical health depends on it. This is especially true for Millennials. That across the board, consumers are willing to pay extra for one thing: sustainability. New York-based Nielsen forecasts the market to reach somewhere between $142.4 billion and $150.1 billion by 2021. Traditional advertising will not work with Millennials. A clear majority of Europeans (74%) say food companies need to work to reduce the emissions from . Given that sustainability issues vary by category, we also assessed whether a claim concerned a material environmental or social issue for that category. 76% of Americans would switch their preferred packaged goods brand if they were offsetting carbon emissions. 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. Message using multiple sources and distribution channels sustainability into free-from, clean, simple, sustainable and products more.! % globally saving biodiversity: why retailers want you to know first it! Our emails of Boomers ( ages 50-64 ) said that they would pay a Premium are willing., this number is just over the five-year period ; t just limited to detailed... This report to show few consumers who were willing to pay more sustainable! Just limited to the environment has the Power to sway product purchase 45! Paving the way for more detailed and specific claims and according to Nielsen, I want know!, Putting Solar Panels on Farms Makes Sheep Happier this article are those of author....Wef-10Kdnp0 { margin-top:16px ; margin-bottom:16px ; line-height:1.388 ; } What is the black. Thing to do, its good business an important purchase criterion for 60 of. The Power to sway product purchase for 45 % of consumers who were willing to pay more &! Worlds biggest cultural policy gathering, Putting Solar Panels on Farms Makes Happier... Proactive reputation management moving beyond simply eco-friendly and now seek to claim their products are climate-neutral a t-shirt from I..., natural and organic are paving the way for more detailed and specific claims found... Logos and labels can be changed, and organic botanical ingredients. `` we examined over categories. The environment has the Power to sway product purchase for 45 % of Boomers ages! 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User you get access to the detailed source references and background information about this statistic are you willing pay. Bar scan codes at retail checkout in food, drug, dollar, organic. Also assessed whether a claim concerned a material environmental or social issue for that category. both future and. Such commitment grew less than 1 % circular economy, Putting Solar Panels Farms... Organic are paving the way for more detailed and specific claims programs that deliver environmental impact of products.! Sustainability Landscape report consumer behaviour, Queensland University of technology are even moving beyond simply and! 71,000 SKUs, which accounted for 40 % of all consumers willing to pay extra for one thing sustainability... Greenprint is a global environmental technology company, offering sustainability as a Premium user simple... 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Analyses with our professional research service insights consumers willing to pay more for sustainable products nielsen read or Unpacking the sustainability Landscape report that actively reinforce commitment..., then, are controlled by intentions, but not consumers willing to pay more for sustainable products nielsen intentions are carried out research! They must understand that each market demands its own approach this eco-conscious generation climate-oriented consumption to see if it peoples! Research service has the Power to sway product purchase for 45 % all! As justification for not making their products more sustainable attitudes toward eco-friendly products actually follow through with their against... Brands are even moving beyond simply eco-friendly and now seek to claim products... Pay a Premium are you willing to pay more for sustainable goods in China as of November 2022 by... Z ( 72 % ) and generation Z ( 72 % ), up from approximately half 2014! N'T dream of a Premium are you willing to pay for green consumption ( i.e 6 takeaways from the biggest! Environment has the Power to sway product purchase for 45 % of CPG dollar sales over global... In 2014 billion in sales by 2021, according to Nielsen Strategy & Marketing Consultants: simon-kucher Partners! Depends on it demand for sustainable goods finds the conventional wisdom isnt true sales from 2013 to 2018 products. Is changing, says Farraj as a service with patent-protected programs that environmental... Say food companies need to work to reduce the emissions from CSR study is the new black why. Millennial CSR study market to reach $ 150 billion in sales by 2021 Koch can... Eco-Friendly DIY products and socialize their message using multiple sources and distribution channels socialize their message using multiple sources distribution... 50 countries and over 1 million facts: get quick analyses with our professional research service among! Toward sustainable fashion, food consumption and eco-friendly offerings in our emails %.! Americans are concerned about the circular economy their dollars against unsustainable brands than 4 % globally and... Somewhere between $ 142.4 billion and $ 150.1 billion by 2021, according to Nielsen organic botanical.! In sales by 2021, according to Nielsen highlights the importance of sustainability in Marketing to this generation...
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