In fact, almost half (41%) of consumers from around the world say that they're highly willing to pay more for products that contain all-natural or organic ingredients. World Economic Forum articles may be republished in accordance with the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International Public License, and in accordance with our Terms of Use. lire aussi : 76% of Americans would switch their preferred packaged goods brand if they were offsetting carbon emissions. This is especially true for Millennials. Can changing your mindset change everything? Ryan Rudomineris a principal at R2 Strategic Consulting where he specializes in strategic communications, advocacy, and media relations. As a Premium user you get access to background information and details about the release of this statistic. crivez un article et rejoignez une communaut de plus de 160 400 universitaires et chercheurs de 4 572 institutions. 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%). 77% of Americans are concerned about the environmental impact of products they buy. According to market research firm Nielsen, just 22% of the world's consumers were willing to pay more for an eco-friendly product in 2011, despite the fact 83% thought it was important. (January 18, 2023). Eco-friendly isnt quite so broad and defines products or practices that do not harm the Earths environment. That across the board, consumers are willing to pay extra for one thing: sustainability. GreenPrint Most important,. We help our clients achieve growth and profit targets by applying practical, evidence-based strategies. This likely depressed the growth numbers, as many brands have become more sustainable over time. First Annual Business of Sustainability Index Shows Need for Independent Validation to Overcome Lack of Trust in Environmental Claims. What is the World Economic Forum doing about the circular economy? So it appears that some categories that are behind in sustainability-marketed product share are making up for lost time. And a report published in May by The Toy Association and Prodigyworks notes that millennial parents want the toys and. Companies must act now to avoid obsolescence in the future. Retail data backs up the importance of these influencers. 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. Deloitte. Some more takeaways on consumer habits: More than 8 in 10 recycle and replace lightbulbs with energy-efficient options. Companies that are able to navigate the business of sustainability will be best positioned for future success.. Overview and forecasts on trending topics, Industry and market insights and forecasts, Key figures and rankings about companies and products, Consumer and brand insights and preferences in various industries, Detailed information about political and social topics, All key figures about countries and regions, Market forecast and expert KPIs for 600+ segments in 150+ countries, Insights on consumer attitudes and behavior worldwide, Business information on 60m+ public and private companies, Detailed information for 35,000+ online stores and marketplaces. And investors should support companies in making the investments needed for the pivot. BOSTON--(BUSINESS WIRE)--With COP26, the 2021 United Nations Climate Change Conference, just weeks away, a major study of more than 10,000 people across 17 countries shows that sustainability is becoming increasingly important in consumers purchasing decisions, especially as consumers see themselves, along with for profit companies, as the primary catalysts for change. This statistic presents the results of an online survey conducted from February 17 to March 7, 2014. For most of the history of the moderneconomy, the sourcing of products didn't even cross the minds of those shopping. 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. Some brands are even moving beyond simply eco-friendly and now seek to claim their products are climate-neutral. Please create an employee account to be able to mark statistics as favorites. On a global scale, the percentage of consumers willing to pay a premium for. Prosek Partners The relative importance of sustainability during the purchase process will continue to increase. Among millennials,. Our analysis did not include the term natural (which is ubiquitous but means nothing) or marketing claims related to social causes or charities. 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. So when it comes to purchasing, they are doing their homework. 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. And its no longer just wealthy suburbanites in major markets willing to open their wallets for sustainable offerings. Our own 2019 report, " The State of Consumer Spending: Gen Z . Get full access to all features within our Business Solutions. What is the Green List and how can it help protect the worlds natural wonders? Many sustainable trends in new markets start with beauty and personal care. The rise of sustainable disruptors and increasing consumer awareness will all serve to drive the expectation for affordable sustainable alternatives.. Are you making an effort to reach these socially conscious young people? 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. 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. As CPG sales spiked . "Share of consumers who were willing to pay more for sustainable goods in China as of November 2022, by category." According to the2015 Cone Communications Millennial CSR Study, More than nine-in-10 Millennials would switch brands to one associated with a cause (91% vs. 85% U.S. average), and two-thirds use social media to engage around CSR (66% vs. 53% U.S. average)., The study also finds that Millennials say they are prepared to make personal sacrifices to make an impact on issues they care about, whether thats paying more for a product (70 percent vs. 66 percent US average), sharing products rather than buying (66 percent vs. 56 percent) or taking a pay cut to work for a responsible company (62 percent vs. 56 percent).. As consumers become increasingly aware of what they put in and on their bodies, theyre also interested in buyingand sometimes paying morefor products that simultaneously help the environment. Defending and preserving our planet is not only the right thing to do, its good business. Brands that establish a reputation for social responsibility and environmental stewardship among todays youngest consumers have an opportunity to not only grow market share but build loyalty among the power-spending Millennials of tomorrow, too, says Farraj. 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. The U.S. sustainability market is projected to reach $150 billion in sales by 2021, according to Nielsen . The Consumer Sustainability Survey (2019) found that 72% of consumers buy more environmentally-friendly products than five years ago. Colloquially, use of the word green is applied broadly to almost everything related to benefiting the environment, from production and transportation to architecture and even fashion. 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 . More than half of Europeans (51%) said they are willing to pay more for climate friendly food. So while not all consumers will pay more for green climate-friendly products despite the best of intentions, we can slowly nudge them to make better choices for the planet. The study also found a large degree of mistrust about companies environmental claims. Consumers also see themselves as the agents of change, implying that the call to action for companies to adapt has never been more urgent. how much more are you willing to pay compared to regular goods) when purchasing the following categories? 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. Simple economies of scale also impact on price. Accessed March 02, 2023. https://www.statista.com/statistics/1367681/china-consumers-willingness-to-pay-more-for-sustainable-goods/, Deloitte. 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 . Rachel Pope Consumers want #sustainable packaging - and most of them would pay more for it. 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). 5 Ways to Connect Wireless Headphones to TV. January 18, 2023. Topping the list of sustainability factors that influence purchasing for nearly two-of-three (62%) consumers globally: brand trust. Companies across industries have . Since then, the trend has only increased: a 2015 Nielsen poll showed that 66% of global consumers are willing to pay more for environmentally sustainable products. In 2014, less than 30 . Statista. Good Environmental Choice Australia is a similar organisation. When it comes to sales intent, commitment to the environment has the power to sway product purchase for 45% of consumers surveyed. The views expressed in this article are those of the author alone and not the World Economic Forum. It can be done. As US psychologist Icek Ajzen wrote: Actions, then, are controlled by intentions, but not all intentions are carried out . Today, 50 percent of consumers rank sustainability as a top five value driver, said Dr. Andreas von der Gathen, co-CEO of Simon-Kucher. 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. In the US, this number is just over the global average at 61 percent. 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. Globally, willingness to pay for sustainable products or services is highest in US (42 percent), with these the US also representing the highest average premium (37 percent premium). Minds can be changed, laws can be changed, and companies can be changed. This study investigated consumers' Willingness To Pay (WTP) for dry semolina pasta produced with raw materials from more diversified agricultural systems and which factors influence this . The Global Sustainability Study 2021 survey was conducted in July 2021 by Simon-Kucher & Partners, fielding through panel data provided by Dynata, an independent market research agency. 50% of CPG growth from 2013 to 2018 came from sustainability-marketed products. But nearly 60% are unwilling to pay more money for that eco-friendly product. And according to Nielsen, I'm not alone in that. For further information please contact: You can only download this statistic as a Premium user. 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. It is no secret that companies must be responsive to customer demands and expectations if they want to survive. Sustainability-marketed products are growing quickly in almost all CPG categories. They accounted for 16.6% of the market in 2018, up from 14.3% in 2013, and delivered nearly $114 billion in sales. Commitment to either social value or the consumers community are also important (each influencing 43% and 41% of respondents, respectively). 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 . 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 Millennials want to know what companies are doing to make the world a better place. 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. Currently, you are using a shared account. While companies are increasingly using environmental claims to appeal to consumers, they also attract greater scrutiny. Nielsen, an S&P 500 company, has operations in over 100 countries that cover more than 90% of the worlds population. A weekly update of the most important issues driving the global agenda. 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. Profit from the additional features of your individual account. As a result, many consumers have adopted more sustainable behaviors. A willingness to pay more for "sustainable" products. A Global Corporate Sustainability Report published by Nielsen indicates that, "globally, 66 percent of consumers are willing to spend more on a product if it comes from a sustainable brand. zharris@prosek.com, Internet Explorer presents a security risk. Tech is close behind at 74%, while gas stations and convenience stores rank lower at 51% and 54% respectively. [Online]. 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. Saving biodiversity: why our mental and physical health depends on it. Complete study findings are available upon request, including country splits. This statistic reveals a significant shift in consumer behavior and highlights the importance of sustainability in marketing to this eco-conscious generation. According to the report, sales of consumer goods from brands with a demonstrated commitment to sustainability have grown more than 4% globally in the past year, while those without grew less. Committing to sustainability might just pay off for consumer brands, according to the latest Nielsen Global Corporate Sustainability Report. On the flip side, large global consumer-goods brands that ignore sustainability increase reputational and business risk. Companies must invest, innovate and transform their business models now to protect their long-term profitability and viability. Nudge theory is used to understand how people think, make decisions and behave. The survey also showed that consumers in Southeast Asia are the most willing . Fifty percent of global consumers are willing to pay more for goods and services from companies that have implemented programs to give back to society, according to a new study from Nielsen. By comparison, 51% of Boomers (ages 50-64) said that they would pay a premium for sustainable products. Consumers from 60 countries were surveyed for this report. As economists say, as price lowers, our willingness and ability to buy an item increase. "Our sustainability. In burgeoning sustainability markets, however, natural and organic are paving the way for more detailed and specific claims. GreenPrint is a global environmental technology company, offering sustainability as a service with patent-protected programs that deliver environmental impact and bottom-line results. For more information, visit www.nielsen.com. www.simon-kucher.com, Internet Explorer presents a security risk. Percentage points exceeding 100 percent are probably due to rounding. 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. Im seeing quite a few climate-friendly products at the supermarket. And as social media channels continue to burgeon, the voice of younger generations will only increase the demand for sustainability. Globally, sustainability is rated as an important purchase criterion for 60 percent of consumers. 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. Shoppers once selected grocery products based simply on price or brand, but now attributes such as climate-friendly or eco-friendly are part of the consideration. 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. Third-party validation helps certify progress in the eyes of consumers, and the process of carbon offsetting which is easy to measure and communicate helps create tangible benchmarks. 43% of consumers want brands to be more aggressive about showing sustainable products on-site to further personalize their shopping experience. Studies show that people are geared towards using sustainable products more than others. One overwhelming conclusion of the report? You can unsubscribe at any time using the link in our emails. In China, 41% of consumers say that they want eco-friendly products. 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 didnt even make the top five. 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. Youths' greater sensitivity towards CSR issues is on display in another report, this one limited to US respondents. The report, "Doing Well by Doing Good," found that most consumers are willing to pay more money for good and services that are sustainable. If you have a question youd like an expert to answer, please send it to climate.change@stuff.co.nz. While 66 percent of global consumers are willing to pay. A 2015 global survey by Nielsen found that 66 per cent of respondents were willing to pay more for sustainable goods. Consumer concern about the environment does not readily translate into the purchase of environmentally friendly products. Millennials make up the fastest growing force in the marketplace. "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. As a result, e-commerce businesses that prioritize environmentally-friendly practices will likely see a competitive advantage. Voir les partenaires de TheConversation France. 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. Professor of Marketing and Consumer Behaviour, Queensland University of Technology. The Daily Digest for Entrepreneurs and Business Leaders, 73 Percent of Millennials Are Willing to Spend More Money on This 1 Type of Product. For years, researchers have examined climate-oriented consumption to see if it wins peoples support. Our eBook "What ESG means to you and your consumers in 2022" is designed to help Consumer brands that havent embraced sustainability are at risk on many fronts, says Gstalder. "Consumers are really seeking to purchase products that help them stay true to their values and what they consider matters most to them," said Parker. For this group, personal values are more important than personal benefits, such as cost or convenience. The survey reports that 58% of Europeans consider climate impact . Mr Harrison says, however, that customers are becoming more canny. According to a 2020 report by First Insight , 73% of Gen Z consumers surveyed were willing to pay more for sustainable products, more . The shift in consumer buying, where more consumers are willing to pay more for environmentally conscious products, underscores the need for manufacturing companies to enhance their commitment to responsible business practices using technologies that support more sustainable product design and development. 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. To ensure the most secure and best overall experience on our website, we recommend the latest versions of. : (617) 231-4551 A survey by Nielsen found that 66% of consumers are willing to pay more for sustainable products. 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). In a study byHorizon Medias Finger on the Pulse, 81 percent of Millennials expect companies to make a public commitment to good corporate citizenship.. For example, one study found Spanish consumers were willing to pay 2237% more for green products, but Japanese consumers were only willing to pay 822% more for green products. 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. 65% would be willing to spend up to 20% more on eco-friendly products. From there, it becomes more specific and fragmented. If you are an admin, please authenticate by logging in again. Those that had no such commitment grew less than 1%. We examined over 36 categories and more than 71,000 SKUs, which accounted for 40% of CPG dollar sales over the five-year period. In other words, I'm willing to spend more (a lot more, in fact) to know that what I'm spending my money on is actually good for the earth and the people on it. The bottom line is that the corporate world cannot ignore the demands and expectations of Millennials, who are devout in their desire to associate with companies aligned with their values. In 2015, brands who showed a commitment to sustainability saw sales grow more than 4% globally. Almost three quarters of the . Wed suggest they follow the data. Brands can bring their CSR efforts to life through authentic storytelling. , Feb 8, 2023. However, as demand grows for sustainable products and they become the expectation rather than the exception, sustainability will become table stakes and hygiene factors, said Jain. 75% of millennials are willing to pay extra for sustainable products.3Coffee cups, palm oil, and single-use plastics are some recent products to face public discussion, which leaves businesses rethinking both the sustainability of their materials and processes, and the environmental impact and recyclability of their products. Its hard to ignore the siren call to protect the planet. Climate Explained is a collaboration between The Conversation, Stuff and the New Zealand Science Media Centre to answer your questions about climate change. 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. For additional market-level insights, read or Unpacking the Sustainability Landscape report. Again, younger generations lead the way as higher shares of Generation Z (39 percent) and Millennials (42 percent) are willing to pay for sustainability compared to Gen. X (31 percent) and Baby Boomers (26 percent). Across industries, willingness to pay for sustainability is highest in Consumer goods (38 percent), and lowest for Energy/utilities (31 percent). In its2015 Nielsen Global Corporate Sustainability Report, Nielson found that 66% of global consumers say they are 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. Schwab Foundation for Social Entrepreneurship, Centre for the Fourth Industrial Revolution, How much do we really care about nature? About three in four Millennials (74 percent) and Generation Z consumers (72 percent) are willing to pay more for sustainable products and services, according to The Nielsen Company. Please do not hesitate to contact me. This page does not exist in [x], feel free to read the page you are currently on or go to the [x] homepage. Millennials and Gen Z are becoming a force to be reckoned with as they continue to represent a larger share of the consumer demographic. While attitudes vary across generations, countries, and industries, 85% of consumers have become greener in their purchasing in recent years. Companies have used this conventional wisdom as justification for not making their products more sustainable. 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). e-mail: rachel.pope@simon-kucher.com In a free market economy, it is very difficult to force people to pay more for products. That said, some of those categories saw high growth in sustainability-marketed products sanitary napkins and laundry care were among the highest, at 150%. In Taiwan, for example, where 88% of surveyed consumers said that it is extremely or very important that companies implement programs to improve the environment, there is evidence of a growing trend in natural in personal care. While this statistic is telling on its own, what's more telling is that 81% of those interviewed said that they planned to buy more sustainable products over the next five years.. And environmental consciousness isn't a new trend among consumers. CPGs that are not making the pivot will lose Kraft Heinz, whose investors have encouraged a cost-cutting approach that is backfiring, is a case in point. Directly accessible data for 170 industries from 50 countries and over 1 million facts: Get quick analyses with our professional research service. Given that sustainability issues vary by category, we also assessed whether a claim concerned a material environmental or social issue for that category. Rudominers lifelong passion is using communication to foster social change. ", 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. In 1998, the Council of the European Union passed a directive that setrules for the protection of farmed animals -- a directive updated in 2009 that led tofar more ethical treatment of animals there. 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. By almost any measure, Millennials place a premium on corporate social responsibility (CSR) efforts. Hence, despite environmental concern and the positive attitude of customers towards sustainability and green products, its estimated the market share of green products will reach only 25% of store sales by 2021. A new report reveals all. And how can we encourage people to make good choices? They expect a two-way, open dialogue with companies and their brands. Were surveyed for this group, personal values are more important than personal benefits, such cost... History of the moderneconomy, the voice of younger generations will only increase the demand for sustainability five! To regular goods ) when purchasing the following categories rachel Pope consumers brands... And replace lightbulbs with energy-efficient options Icek Ajzen wrote: Actions, then, are controlled by,... Sustainability markets, however, natural and organic are paving the way for more detailed and specific.. 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Force to be able to mark statistics as favorites doing about the release of this statistic presents the results an. Environmental impact of products did n't even cross the minds of those.. That sustainability issues vary by category, we recommend the latest versions of no secret that companies must invest innovate.