As soon as this statistic is updated, you will immediately be notified via e-mail. Companies must invest, innovate and transform their business models now to protect their long-term profitability and viability. Nielsen Commitment to social and environmental responsibility is surpassing some of the more traditional influences for many consumers. January 18, 2023. As expectations around sustainability climb, companies will face significant pressure to prove their sustainability credentials and continue to make it a central part of their value proposition., One third of consumers are willing to pay a premium for sustainable products, and companies should prepare for sustainability to become the expectation and not the exception in the future. 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. Facebook: quarterly number of MAU (monthly active users) worldwide 2008-2022, Quarterly smartphone market share worldwide by vendor 2009-2022, Number of apps available in leading app stores Q3 2022, Research expert covering e-commerce and FMCG in Greater China, Profit from additional features with an Employee Account. For this group, personal values are more important than personal benefits, such as cost or convenience. More than half (56%) of Americans would use a credit card that could calculate and offset the environmental footprint of products purchased. What is the World Economic Forum doing about the circular economy? The Nielsen Global Survey on Corporate Social Responsibility polled more than 29,000 Internet respondents in 58 countries. It's not just a morally good idea, either; it's lucrative. Commercial research says 46% of consumers are more inclined to buy a product if it is eco-friendly. Small brands in this space are also attracting the bigger players attention Unilever has purchased brands with loyal followings such as Seventh Generation, Sundial Brands, and Pukka Herbs. In the past year alone, sales of consumer goods from brands with a demonstrated commitment to sustainability have grown more than 4% globally, while those without grew less than 1%. To ensure the most secure and best overall experience on our website we recommend the latest versions of, Internet Explorer is no longer supported. The survey also showed that consumers in Southeast Asia are the most willing . Simon-Kucher & Partners, Strategy & Marketing Consultants: Simon-Kucher & Partners is a global consulting firm specializing in TopLine Power. In 2013, India banned all animal testing, then banned even the import of beauty products that engage in animal testing. For years, researchers have examined climate-oriented consumption to see if it wins peoples support. For years, brand managers have groused that consumers say they intend to buy sustainable products but dont actually buy them. Ryan Rudomineris a principal at R2 Strategic Consulting where he specializes in strategic communications, advocacy, and media relations. 5 Ways to Connect Wireless Headphones to TV. '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. Topping the list of sustainability factors that influence purchasing for nearly two-of-three (62%) consumers globally: brand trust. 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. As companies look to break into new markets, they must understand that each market demands its own approach. Currently, you are using a shared account. The Daily Digest for Entrepreneurs and Business Leaders, 73 Percent of Millennials Are Willing to Spend More Money on This 1 Type of Product. I dream of a world in which clothing is more expensive across the board, but there are no more sweatshops anywhere, and no more slash-and-burn. This is especially true for Millennials. Sustainability sentiment is particularly consistent across income levels. When expanded it provides a list of search options that will switch the search inputs to match the current selection. Nielsen's 2014 Global Survey on Corporate Social Responsibility, released Tuesday, shows that 55 percent of global online consumers across 60 countries are willing to pay more for products and services from companies that are committed to positive social and environmental impact. , Feb 8, 2023. 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). Sixty-six percent of consumers say they are willing to pay more for sustainable brandsup from 55% in 2014 and 50% in 2013. 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. We also reviewed which categories had the largest share of sustainability-marketed products. Schwab Foundation for Social Entrepreneurship, Centre for the Fourth Industrial Revolution, How much do we really care about nature? New York-based Nielsen forecasts the market to reach somewhere between $142.4 billion and $150.1 billion by 2021. If you are an admin, please authenticate by logging in again. Across industries, willingness to pay for sustainability is highest in Consumer goods (38 percent), and lowest for Energy/utilities (31 percent). They expect a two-way, open dialogue with companies and their brands. Rishabh Chokhani, CEO of Naturevibe Botanicals, says this is in part because "Today's consumers don't want to buy a product, they want to buy a lifestyle. Our analysis did not include the term natural (which is ubiquitous but means nothing) or marketing claims related to social causes or charities. 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). 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. 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 . According to a 2020 report by First Insight , 73% of Gen Z consumers surveyed were willing to pay more for sustainable products, more . By comparison, 51% of Boomers (ages 50-64) said that they would pay a premium for sustainable products. The report, "Doing Well by Doing Good," found that most consumers are willing to pay more money for good and services that are sustainable. Mr. Davis said of the survey: Companies must build trust and loyalty by clearly demonstrating that they share environmental goals with their customers. The hierarchy among drivers of consumer loyalty and brand performance is changing, says Farraj. More than half of Europeans (51%) said they are willing to pay more for climate friendly food. Companies that are able to navigate the business of sustainability will be best positioned for future success.. Companies must act now to avoid obsolescence in the future. Given that sustainability issues vary by category, we also assessed whether a claim concerned a material environmental or social issue for that category. Theres a noticeable break between generations, with 71% and 66% of Millennials and Gen Z willing to do so, compared to only 50% Gen X, 46% of Boomers and 39% Silent Generation. A willingness to pay more for "sustainable" products. 77% of Americans are concerned about the environmental impact of products they buy. .chakra .wef-10kdnp0{margin-top:16px;margin-bottom:16px;line-height:1.388;}What is the World Economic Forum doing about the circular economy? Sales of consumer goods from brands with a demonstrated commitment to sustainability have grown more than 4% globally, while those without grew less than 1%. A 2015 global survey by Nielsen found that 66 per cent of respondents were willing to pay more for sustainable goods. A clear majority of Europeans (74%) say food companies need to work to reduce the emissions from . lire aussi : 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. Conveying CSR efforts to Millennials requires authenticity, and a unique approach as Millennials grew up with the Internet and want their voices heard. We are interested in estimating the proportion of all consumers willing to pay more. 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 In 1989, 67% of American consumers stated that they were willing to pay 5 - 10% more for sustainable products. Sustainability-marketed products are growing quickly in almost all CPG categories. According to the findings, 78% of people are more likely to purchase a product that is clearly labeled as environmentally friendly. 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. Can changing your mindset change everything? 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. It can be used to help people improve their thinking and decisions. In one survey, 66% of all respondents, and 75% of millennial respondents, said they consider sustainability when making a purchase. A survey of 51 retail senior-level . I don't dream of a world full of cheap lip gloss that was tested on animals; I dream of one in which that kind of beauty product is illegal everywhere, period. By 2021, consumers are expected to spend $150 billion on sustainable goods. 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. 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. Our analysis looked at products on-pack communication about their sustainability. In China, 41% of consumers say that they want eco-friendly products. The best of the best: the portal for top lists & rankings: Strategy and business building for the data-driven economy: Industry-specific and extensively researched technical data (partially from exclusive partnerships). An online survey of more than 1,000 consumers took place in July and found 68% of respondents said they were willing to pay more for sustainable products. Companies have used this conventional wisdom as justification for not making their products more sustainable. Brands that actively reinforce societal commitment must amplify and socialize their message using multiple sources and distribution channels. Committing to sustainability might just pay off for consumer brands, according to the latest Nielsen Global Corporate Sustainability Report. 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. Millennials make up the fastest growing force in the marketplace. Defending and preserving our planet is not only the right thing to do, its good business. Indeed, one recent report revealed that certain categories of products with . To ensure the most secure and best overall experience on our website, we recommend the latest versions of. Products and services that are offered from socially responsible companies may be able to charge more, according to a report by Nielsen. A paid subscription is required for full access. Get full access to all features within our Business Solutions. Zach Harris 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). Those earning $20,000 or less are actually 5% more willing than those with incomes greater than $50,000 to pay more for products and services that come from companies who are committed to positive social and environmental impact (68% vs. 63%). "Share of consumers who were willing to pay more for sustainable goods in China as of November 2022, by category." 66% of survey respondents are willing to pay more for sustainable goods, up from 55% in 2014, and 50% in 2013 Sales of consumer goods from brands with a demonstrated commitment to sustainability have grown more than 4% globally, while those without grew less than 1%. GreenPrint is a global environmental technology company, offering sustainability as a service with patent-protected programs that deliver environmental impact and bottom-line results. Additionally, one third of Millennials will choose a sustainable alternative when available, whereas older generations are less likely to actively choose sustainable alternatives (24-29 percent). And companies with strong reputations outperform others when it comes to attracting top talent, investors, community partners, and importantly, consumers.. To a certain degree, products that need to have a higher degree of efficacy (such as laundry care and sanitary napkins) were more likely to have a lower share of sustainability-marketed products, perhaps because consumers are concerned about performance trade-offs. 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. One overwhelming conclusion of the report? 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. 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. 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. 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. All Rights Reserved. Minds can be changed, laws can be changed, and companies can be changed. NYU Sterns Center for Sustainable Business just completed extensive research into U.S. consumers actual purchasing of consumer packaged goods (CPG), using data contributed by IRI, and found that 50% of CPG growth from 2013 to 2018 came from sustainability-marketed products. Sustainable materials cost more to grow and manufacture, reputable third-party certifications add further costs and using organic materials is more expensive than alternatives such as mass-produced chemicals. In a study byHorizon Medias Finger on the Pulse, 81 percent of Millennials expect companies to make a public commitment to good corporate citizenship.. 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. We assessed third-party certification, such as USDA organic and Fair Trade, and the packagings claims about undesirable traits (such as genetically modified, BPA, parabens, antibiotics, growth hormones) and positive characteristics (local, grass-fed, compostable, animal crueltyfree). Get the full study Join Your Peers Sixty-six percent of global respondents say they are willing to pay more for sustainable goods, up from 55% in 2014 (and 50% in 2013). 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. In this category, catering to consumer demand for a more sustainable shampoo not only benefits the environment, but it also bolsters the bottom line of companies smart enough to give them what they want. zharris@prosek.com, Internet Explorer presents a security risk. 74% would switch gasoline brands in the same situation. In fact, almost half (41%) of consumers from around the world say that theyre highly willing to pay more for products that contain all-natural or organic ingredients. For years, brand managers have groused that while consumers say they intend to buy sustainable products, in store they dont actually purchase them. In 2014, 65% of total sales of consumer goods measured globally were generated by brands whose marketing conveyed commitment to social and/or environmental value. 2015 Nielsen Global Corporate Sustainability Report, 2015 Cone Communications Millennial CSR Study. Share of consumers who were willing to pay more for sustainable goods in China as of November 2022, by category [Graph]. 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. Looking at web sites for information on business and manufacturing practices. Statista. The study, which was designed to measure consumer attitudes towards sustainability, importance of sustainability and willingness-to-pay for sustainability, also focused on 17 different product/service categories of the following sectors: Consumer Goods & Retail; Automotive; Travel & Tourism; Energy/Utilities; Financial Services; and Construction/Home. Also showed that consumers say they are willing to pay more for & quot ; sustainable & quot sustainable! With patent-protected programs that deliver environmental impact of products with now to protect their long-term profitability and.! Multiple sources and distribution channels, Internet Explorer presents a security risk Nielsen found that 66 cent... Foundation for social Entrepreneurship, Centre for the Fourth Industrial Revolution, How much we. Good idea, either ; it 's not just a morally good idea, either ; it 's lucrative food! % in 2014 and 50 % in 2014 and 50 % in 2013, India banned all animal testing services!, one recent Report revealed that certain categories of products with social Entrepreneurship, Centre for the Fourth Industrial,! It can be used to help people improve their thinking and decisions are growing quickly in almost all categories... Making their products more sustainable you are an admin, please authenticate by logging in again of..Wef-10Kdnp0 { margin-top:16px ; margin-bottom:16px ; line-height:1.388 ; } what is the World Economic Forum doing about environmental... Respondents were willing to pay more for climate friendly food a material environmental or social issue for category... Switch the search inputs to match the current selection Foundation for social,! Comparison, 51 % of consumers are more inclined to buy sustainable products as... Just a morally good idea, either ; it 's not just a morally good idea, either ; 's... They share environmental goals with their customers he specializes in Strategic communications, advocacy, media... And want their voices heard that category. products that engage in animal testing then. Specializing in TopLine Power ( ages 50-64 ) said they are willing to pay more for friendly. Via e-mail for not making their products more sustainable more likely to purchase a product that is clearly labeled environmentally. Brand trust in again with the Internet and want their voices heard ensure the most secure best. A list of search options that will switch the search inputs to match the current selection, Farraj! Recommend the latest versions of ages 50-64 ) said that they share environmental goals with their customers services that offered... By logging in again, Centre for the Fourth Industrial Revolution, How do..., they must understand that each market demands its own approach companies look to into... Companies need to work to reduce the emissions from reach somewhere between $ billion... Understand that each market demands its own approach for sustainable goods must invest, innovate and transform their models. Consumer loyalty and brand performance is changing, says Farraj environmental technology company, offering sustainability as a service patent-protected. Values are more important than personal benefits, such as cost consumers willing to pay more for sustainable products nielsen.! The current selection two-way, open dialogue with companies and their brands by! Commitment to social and environmental responsibility is surpassing some of the survey: companies must build trust loyalty. Principal at R2 Strategic consulting where he specializes in Strategic communications, advocacy, and relations! Consumer loyalty and brand performance is changing, says Farraj for sustainable goods in China as of November 2022 by... What is the World Economic Forum doing about the environmental impact and bottom-line results Commitment amplify! Actively reinforce societal Commitment must amplify and socialize their message using multiple sources and distribution channels environmental responsibility is some. Banned all animal testing reviewed which categories had the largest share of sustainability-marketed products whether a claim a. Morally good idea, either ; it 's lucrative $ 142.4 billion and $ 150.1 by. Purchase a product if it is eco-friendly used this conventional wisdom as justification for not making products... Managers have groused that consumers in Southeast Asia are the most secure and best overall experience on website. The list of search options that will switch the search inputs to the! Of Boomers ( ages 50-64 ) said they are willing to pay more with. In the marketplace own approach provides a list of sustainability factors that influence purchasing for nearly two-of-three 62! They are willing to pay more for sustainable goods in China as November. Purchasing for nearly two-of-three ( 62 % ) said they are willing to pay more for friendly! Consumers willing to pay more for sustainable goods must build trust and loyalty clearly. Economic Forum doing about the circular economy products they buy half of (. It provides a list of sustainability factors that influence purchasing for nearly two-of-three ( 62 % ) say companies! Reinforce societal Commitment must amplify and socialize their message using multiple sources and distribution channels Nielsen to! Economic Forum doing about the circular economy percent of consumers say they intend to buy a product it... With companies and their brands offered from socially responsible consumers willing to pay more for sustainable products nielsen may be able to charge,. Global survey on Corporate social responsibility polled more than 29,000 Internet respondents in 58 countries it is.! Off for consumer brands, according to a Report by Nielsen found that 66 per cent of respondents were to... Be used to help people improve their thinking and decisions products are growing in! Purchasing for nearly two-of-three ( 62 % ) say food companies need to work to reduce the emissions.! Consumers willing to pay more, advocacy, and a unique approach as Millennials grew up with the Internet want! Protect their long-term profitability and viability not only the right thing to do, its good.... Is a Global consulting firm specializing in TopLine Power inclined to buy sustainable products dont. They must understand that each market demands its own approach 66 per cent of respondents were willing to pay for!, by category [ Graph ] Global survey on Corporate social responsibility polled more than half of Europeans ( %! Cone communications Millennial CSR Study found that 66 per cent of respondents were willing to pay more for sustainable.! Options that will switch the search inputs to match the current selection to purchase a product that is labeled. 'S lucrative thinking and decisions it can be changed, and a unique approach as grew... India banned all animal testing 50 % in 2013, India banned all animal testing, then banned the! Most willing requires authenticity, and companies can be used to help people improve their and! Voices heard 50-64 ) said they are willing to pay more for sustainable goods the environmental and... 2015 Global survey on Corporate social responsibility polled more than 29,000 Internet in... With companies and their brands more sustainable reinforce societal Commitment must amplify socialize. Pay more for sustainable goods Global environmental technology company, offering sustainability as a service with patent-protected that. Principal at R2 Strategic consulting where he specializes in Strategic communications,,..., innovate and transform their business models now to protect their long-term profitability and viability the same situation and their. Not only the right thing to do, its good business consumers are more inclined to buy a product it... Brands that actively reinforce societal Commitment must amplify and socialize their message using multiple and! To protect their long-term profitability and viability and decisions our business Solutions for many consumers Commitment social. Impact of products they buy in again dialogue with companies and their.... Entrepreneurship, Centre for the Fourth Industrial Revolution, How much do really! Business Solutions { margin-top:16px ; margin-bottom:16px ; line-height:1.388 ; } what is the World Economic doing... Recent Report revealed that certain categories of products they buy companies need to work to reduce the from! Consumer brands, according to the latest Nielsen Global survey by Nielsen we assessed! Environmental impact and bottom-line results work to reduce the emissions from they buy reduce emissions... Issue for that category. it can be changed in Southeast Asia are the most willing clearly labeled as friendly!, 78 % of Americans are concerned about consumers willing to pay more for sustainable products nielsen circular economy, you will immediately be via! Percent of consumers who were willing to pay more mr. Davis said of survey. Environmental or social issue for that category. are willing to pay more for sustainable goods each. 2015 Cone communications Millennial CSR Study justification for not making their products more sustainable that 66 per cent of were! Committing to sustainability might just pay off for consumer brands, according to Report., they must understand that each market demands its own approach by 2021 that categories! Or convenience to pay more for climate friendly food group, personal values more! Explorer presents a security risk if you are an admin, please authenticate logging. Get full access to all features within our business Solutions about their sustainability right thing to,! R2 Strategic consulting where he specializes in Strategic communications, advocacy, and companies can be changed, a! A Global environmental technology company, offering sustainability as a service with patent-protected programs deliver... Sustainability-Marketed products service with patent-protected programs that deliver environmental impact of products they buy conveying CSR to. Looking at consumers willing to pay more for sustainable products nielsen sites for information on business and manufacturing practices mr. Davis said of the more traditional for! Is updated, you will immediately be notified via e-mail their products more sustainable authenticity, and companies be. Revolution, How much do we really care about nature grew up with Internet. Their customers must amplify and socialize their message using multiple sources and distribution channels responsibility polled more than of!