CHICAGO โ Consumer interest in sustainability is becoming an increasingly important factor when choosing a brand, according to new research from data and analytics solution provider NIQ (formerly NielsenIQ). The companyโs โGreen Divideโ report, which examined consumer preferences, attitudes and behaviors around sustainability, found that 70% of consumers say sustainability is now more important to them when selecting products than it was two years ago.
When asked to choose the single biggest component behind their purchasing decisions, price remains paramount at 18.1%. Environmental friendliness and sustainability have continued to elevate in importance, though, now at 11.2%, ranking just behind safety and hygiene (13.1%), healthier options (13%) and equal with trusted/familiar brands (11.2%).
The growing perception environmental issues are impacting consumer health is partially responsible for the increased focus on sustainability, said Sherry Frey, vice president of total wellness at NIQ.
โTheyโre actually telling us โIโm being physically impacted by weather events, by droughts, by floods, I think the environment is affecting my health,โโ Ms. Frey said. โConsumers are going to prioritize their health and the health of the planet to help others as well.โ
Data from market researcher HealthFocus International identified a similar trend, with 74% of consumers in North America indicating the health of the environment is โextremely importantโ or โimportantโ to their overall health.
โPeople used to make choices separately about the environment and separately about their health,โ said Julie Johnson, general manager of HealthFocus. โNow that connection is definite, and they connect what they are eating with those choices at the shelf.โ
Younger consumers also are placing a larger emphasis on sustainability than previous generations. For instance, one study from FMI โ The Food Industry Association found that 45% of Gen Z and millennials shop with sustainability in mind, compared to only 14% of baby boomers. Similarly, research from global intelligence company Morning Consult showed more than two-thirds of Gen Z respondents cite sustainability having some impact on their food and beverage choices, and 32% said it has a major impact versus 17% of baby boomers who felt it has a major impact.
โWe are anticipating that sustainability is going to keep accelerating because you just have so many young people that say they care,โ Ms. Frey said.
With an uptick in sustainability product claims, NIQ additionally studied which claims are popular among consumers.
โThereโs been just an explosion of claims in the store, weโve had over 100 claims around sustainability, and every month thereโs something new popping up,โ Ms. Frey said. โCertain words like โenvironmentally friendlyโ tend to index higher for those people that tie their health and the planet together.โ
Claims like โresponsibly sourcedโ and โzero waste,โ also had universal appeal, but others were unlikely to resonate in specific demographics. Carbon claims, for example, are particularly polarizing for consumers who donโt prioritize sustainability or have low awareness of climate issues. Ms. Frey said that leaning into the nuances of packaging language can avoid this polarization while signaling the same environmental benefits, such as replacing carbon claims with soil health ones.
Increased interest in sustainability has not directly translated into more consumers living sustainable lifestyles. NIQ identified limited product choice as one of the barriers to living sustainably, along with price. More than 40% of consumers said cost was a key barrier, but 65% also said they are willing to choose a sustainable option if it costs more. The market researcher expects the price parity to decline in the coming years, as more products enter the space and erode the price premiums driven by unique claims, Ms. Frey said.
โToday, most consumers realize it is necessary to pay a price premium of some sort for sustainable products,โ said Nicole Corbett, vice president of global thought leadership at NIQ. โBut, as regulatory mandates dictate transparency, it will be more difficult to justify price premiums as consumer expectations shift to a new baseline.
โSustainability will no longer be a โluxuryโ or differentiated offer soon. Pricing will need to adapt as sustainability becomes the norm that all products must adhere to.โ
