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. 'Global consumer-goods' brands that ignore sustainability increase reputational and business risk' Nielsen's research also found that 66 percent of consumers were willing to pay more for sustainable goods in comparison to 50 percent in 2013. 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. For this group, personal values are more important than personal benefits, such as cost or convenience. As companies look to break into new markets, they must understand that each market demands its own approach. She's vocal about the fact that it costs a lot more than shirts from a company like H&M specifically because she only uses sustainable goods and ethical practices when it comes to the workers. 28 Feb 2023 --- Sustainability factors are increasingly influencing the purchasing behavior of European consumers, according to a study published by crop nutrition company Yara International via IPSOS. 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. Simon-Kucher & Partners, Strategy & Marketing Consultants: Simon-Kucher & Partners is a global consulting firm specializing in TopLine Power. 2023 Nielsen Consumer LLC. Consumers are willing to pay more for greener products and want producers to provide better climate-related on-label packaging. "Our sustainability. Complete study findings are available upon request, including country splits. 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. Inherently skeptical, Millennials will punish companies on social media not deemed to be fully transparent as well as those that pay lip service to CSR and causes important to them. Those that had no such commitment grew less than 1%. Companies must invest, innovate and transform their business models now to protect their long-term profitability and viability. According to a recent survey, 73% of Gen Zers are willing to pay more for sustainable products. This is the result of a representative survey that we commissioned from INNOFACT. 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. 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. Looking at web sites for information on business and manufacturing practices. Consumers could note if they were willing to pay "a little" or "a lot" for each sustainability benefit. to incorporate the statistic into your presentation at any time. By comparison, 51% of Boomers (ages 50-64) said that they would pay a premium for sustainable products. 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 . Committing to sustainability might just pay off for consumer brands, according to the latest Nielsen Global Corporate Sustainability Report. In burgeoning sustainability markets, however, natural and organic are paving the way for more detailed and specific claims. In more than 90% of consumer packaged goods categories, sustainability-marketed products grew faster than their conventional counterparts. Nudge theory is used to understand how people think, make decisions and behave. The report, "Doing Well by Doing Good," found that most consumers are willing to pay more money for good and services that are sustainable. 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. (January 18, 2023). 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. Consumer brands that havent embraced sustainability are at risk on many fronts, says Gstalder. 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. Climate Explained is a collaboration between The Conversation, Stuff and the New Zealand Science Media Centre to answer your questions about climate change. But research continues to show few consumers who report positive attitudes toward eco-friendly products actually follow through with their wallets. We examined over 36 categories and more than 71,000 SKUs, which accounted for 40% of CPG dollar sales over the five-year period. Personal values indeed. 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. Wed suggest they follow the data. not how pretty the blush is. I recently spent $38 on a t-shirt from abrand I would trust with my life: Janne Robinson. Get in touch with us now. Get full access to all features within our Business Solutions. 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 help our clients achieve growth and profit targets by applying practical, evidence-based strategies. how much more are you willing to pay compared to regular goods) when purchasing the following categories? 74% would switch gasoline brands in the same situation. What is the Green List and how can it help protect the worlds natural wonders? 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. 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. In a study of 30,000 consumers across 60 countries, Nielsen found that nearly 2/3 of consumers globally are willing to pay more for sustainable goods and that is on the rise. 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. The views expressed in this article are those of the author alone and not the World Economic Forum. Call me a geek, but I do love a good research report! Social responsibility is a critical part of proactive reputation management. Learn more about how Statista can support your business. 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. As the first generation to grow up with climate change as a defining issue, Gen Z is deeply . 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. In 2015, brands who showed a commitment to sustainability saw sales grow more than 4% globally. There are several reasons for this. In fact, the majority (73%) of global consumers say they would definitely or probably change their consumption behavior to reduce their impact on the environment. That said, some of those categories saw high growth in sustainability-marketed products sanitary napkins and laundry care were among the highest, at 150%. For this reason, the demand for sustainable foods is growing in the market. Nielsen, an S&P 500 company, has operations in over 100 countries that cover more than 90% of the worlds population. Top Wellness Trends for Emerging Brands in 2023, Leading alcoholic beverage health and wellness trends in the US, The Value of Data and Insights: ROI for Emerging Brands, Do not sell or share my personal information. A majority (55%) of consumers are willing to spend extra money in order to purchase environmentally friendly products, though at differing amounts. A weekly update of the most important issues driving the global agenda. Millennials and Gen Z are becoming a force to be reckoned with as they continue to represent a larger share of the consumer demographic. Can changing your mindset change everything? Interestingly, of the people that are willing to pay a sustainability premium, the premium amount is lowest for Consumer goods (22 percent premium on average) it is highest for Financial services (27 percent premium on average). Deloitte. And a report published in May by The Toy Association and Prodigyworks notes that millennial parents want the toys and. Companies that are able to navigate the business of sustainability will be best positioned for future success.. Nielsen TV ads highlighting a companys commitment to positive social and/or environmental impact are influential in the path to purchase for 34% of global respondents. We used clothing brand Reformation as a case study of sorts and spoke with experts in consumer behavior and the fashion industry to better understand the sustainability movement, why consumers love it, and how more brands can do their part. For additional market-level insights, read or Unpacking the Sustainability Landscape report. 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). ", 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. Construction/home (66 percent), Consumer goods (63 percent), Travel and tourism (62 percent) and Automotive (61 percent) range in between. What is the World Economic Forum doing about the circular economy? Consumers also see themselves as the agents of change, implying that the call to action for companies to adapt has never been more urgent. 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