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Sustainable Selections: How Socially Responsible Companies Are Turning a Profit
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Sustainable Selections: How Socially Responsible Companies Are Turning a Profit

In a world of choice, the reasons we purchase one product over another can be driven by a multitude of factors. A recent Nielsen global online survey found that consumers are increasingly willing to pay more for socially responsible products. In fact, 66% of respondents say they’re willing to pay more for products and services that come from companies who are committed to positive social and environmental impact, up from 55% in 2014 and 50% in 2013.

As concerns about the environment and corporate sustainability continue to build momentum around the world, understanding the connection between sentiment and purchasing actions has never been more important. In fact, a 2014 Nielsen retail sales analysis showed that brands with a demonstrated commitment to sustainability grew over 4%, while those without saw less than 1% growth. So what does social and environmental commitment look like to the global consumer, and more specifically what are the most effective ways for companies to resonate with their beliefs? To gain better insight into how consumers show they care, Nielsen polled 30,000 consumers in 60 countries across the globe and asked them to indicate what factors had the most influence on their consumable purchasing habits of products like food, drinks, toiletries and over-the-counter-drugs. The most important factors among those surveyed included a mixture of company expectations and personal benefits, as the top answers were brand trust, natural ingredients and health and wellness benefits.

BRAND TRUST

Companies that hope to make a big impression with consumers need to know that brand trust topped the list of purchase influencers for more than half (62%) of global respondents surveyed.

“Brand trust and reputation are paramount,” says Carol Gstalder, senior vice president, reputation and public relations solutions, Nielsen. “An excellent reputation makes it far more likely a company will be welcomed into new communities; partner with the most respected non-profits working on issues consumers care about most; and be a go-to source for products and services. And what we know for sure is that sustainability is playing an increasingly significant role in consumer decision making.”

When it comes to sales intent, commitment to the environment has the power to sway product purchase for 45% of consumers surveyed. Additionally, commitment to social value (43%) and the consumer’s community (41%) are also important.

And the survey findings are more than just hot air, as retail data backs up the importance of these influencers and proves that consumers are putting their money where their mouths are. In 2014, 65% of total sales measured globally were generated by brands whose marketing conveyed commitment to social and/or environmental value.

“This indicates an opportunity for brands that have already built a high level of trust with consumers to evaluate where best to introduce sustainable products into the market to drive growth,” says Gstalder. “On the flip side, large global consumer brands that ignore sustainability increase reputational and business risk. This may give competitors of all sizes, the opportunity to build trust with the predominantly young, socially conscious consumers looking for products that align with their values.”

HEALTH AND WELLNESS

Beyond brand trust, consumers are looking for products that are both good for them and good for society. A product’s health and wellness benefits are influential purchase decision drivers for more than half of survey respondents (59%). Products made with fresh, natural and/or organic ingredients carry similar weight with consumers (57%). Finding opportunities to bridge the two is a powerful and effective way to connect with consumers.

Other findings include:

  • Consumers in Latin America, Asia, the Middle East and Africa are 23%-29% more willing to pay a premium for sustainable offerings than developed countries.
  • The percentage of measured sales that come from brands using a combination of product claims on packaging and integrated sustainability marketing promotions is much higher in developed markets than in developing countries.
  • Almost three out-of-four Millennial respondents are willing to pay more for sustainable offerings, up from approximately half in 2014.
  • Brands that use a claim plus marketing sustainability approach—including baby food (85%), coffee (78%), tea (61%) and snacks (60%)—comprise a majority of sales measured in these categories, respectively.

For more detail and insight, download Nielsen’s Global Corporate Sustainability Report.

About the Nielsen Global Survey

The Nielsen Global Survey of Corporate Social Responsibility and Sustainability was conducted Feb. 23-March 13, 2015, and polled online respondents in 60 countries who have made a baby care purchase in the past five years throughout Asia-Pacific, Europe, Latin America, the Middle East, Africa and North America. The sample has quotas based on age and sex for each country based on its Internet users and is weighted to be representative of Internet consumers. It has a margin of error of ±0.6%. This Nielsen survey is based only on the behavior of respondents with online access. Internet penetration rates vary by country. Nielsen uses a minimum reporting standard of 60% Internet penetration or an online population of 10 million for survey inclusion. The Nielsen Global Survey, which includes the Global Consumer Confidence Index, was established in 2005.

About the RETAIL SALES ANALYSIS

The findings from the retail sales information included in this report are collected from stores using electronic point-of-sale technology and/or teams of local field auditors. The data represents a cross-section of 1,319 brands among 13 categories (both consumable and non-consumable categories) across and average of 13 countries* for the 12-month period ending December 2014. On average, the brands measured in this study represent 73% of 2014 value sales (USD) in each country-category analyzed (private-label brands were not included). Stores within Nielsen’s worldwide retail network include grocery, convenience and discount retailers, who, through various cooperation arrangements, share their sales data with Nielsen.

*Argentina, Australia, Brazil, Chile, China, Colombia, Germany, India, Italy, Philippines, Russia, Singapore, South Korea, Thailand, U.K. and the U.S.