Mid-East grocery produce shopper

Finding Success Through Sustainability

CPG, FMCG & Retail | 17-05-2019

Corporate responsibility and sustainability strategies can take many different forms depending on the individual retail sector, but one thing is clear: consumers are using their spending power to influence the change they want to see on environmental issues.

A recent Nielsen study on sustainability revealed that 81% of global respondents felt strongly that companies should help improve the environment. This passion for corporate responsibility is shared across gender lines and generations. Millennials, Gen Z and Gen X are the most supportive, but their older counterparts aren’t far behind.

Furthermore, the majority (73%) of consumers said they would definitely or probably change their consumption habits to reduce their impact on the environment. And nearly half (46%) surveyed said they would be willing to forgo a brand name in order to buy environmentally-friendly products.

In Australia, environmental issues are a major concern to 77% of households. These consumers actively engage in “green” activities, such as recycling and the reduction of single-use plastics and plastic bags. In fact, there has already been a 33% reduction in plastic waste since banning plastic bags in some states.

Retailers communicating sustainability attributes are also realising the opportunity it has to increase growth and profit. Nielsen’s Changing Consumer Prosperity study reveals that the majority of Australian consumers are either highly or somewhat willing to pay more for products that are environmentally friendly or sustainable (62%), contain organic or all-natural ingredients (59%), or carry social responsibility claims (55%).

OPPORTUNITY AND APPROACH

Sustainability isn’t a trend retailers can side-step. Sooner or later, whether through government regulation, sheer force of nature, or public outcry, retailers will need to respond. And connecting sustainability factors to how it impacts consumers is the key.

It’s important to remember that in a market like Australia where the concept of sustainability is somewhat established, consumers are becoming more aware of the impacts of pollution and are demanding stronger, more aggressive action from their favourite brands and the government. For instance, in grocery products where “organic”, “natural” and “artificial-free” are becoming commonplace terms, consumers are starting to ask “what do you mean?” and are looking for more clarity in these claims.

Recommendations to help your brand win in sustainability:

  • Understand the impact of ingredients and the level of scrutiny that consumers apply to the products they purchase. 
  • Consider the link between what’s healthy for the environment and healthy for the consumer. 
  • Communicate the benefits in your marketing and incorporate the applicable sustainability claims on packaging. 
  • Support your sustainability strategy with the right marketing, promotions and distribution.
  • Understand that consumers and their expectations will continue to evolve, so keep a pulse on your marketing and fine-tune your messaging in-flight.

In the longer term, it’s important to invest in product development, testing and research. As the market becomes more crowded, it’ll take more to stand out. Seek to build and grow your sustainability strategy to encompass every part of the business. And build a roadmap for product enhancements based on customer feedback and internal R&D: whether it's shifting to more sustainability-focused suppliers, reducing your use of packaging materials, or changing the ingredient line-up across your portfolio.

Lastly, don’t forget sustainability is intricately linked with corporate reputation and authenticity. Any false claims or sloppy vendor management can result in a major scandal and damage a brand’s reputation.

Tagged:  HEALTHY EATING  |  MILLENNIALS  |  BRAND MARKETING  |  SHOPPER  |  CONSUMER  |  CPG AND RETAIL  |  GREEN  |  GROCERY

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