Will Going Green Pay Off?

In volumes one, two, and three of our sustainability series, we examined how consumer behavior is driving the demand for more environmental awareness among eCommerce, how companies are responding throughout their supply chains, and how major retailers are helping online shoppers go green. Our fourth and final volume asks if going green pays off.

While some brands are building their business with sustainability in mind, most are playing catch-up and reassessing every step of their supply chain to meet the environmental expectations of consumers. As CPG brands making environmental upgrades gain market share, companies have moved beyond questioning if they can afford to overhaul their operations and are instead realizing that they can’t afford to ignore such investments. 

Will consumers prioritize sustainable products?

Although the demand for sustainable shopping was already picking up steam prior to the pandemic, consumers became more aware of how humans impact the planet during lockdown. That reckoning paired with a deeper overall connection to values has caused consumers to shop their conscience at unprecedented levels. Today’s consumer has evolved beyond just recycling and actively seeks out sustainable brands to incorporate throughout their entire lifestyle. 

Value-driven consumerism is thriving among younger shoppers in particular, with 94% of Gen Z consumers expecting companies to have a stance on social issues and 90% prioritizing products that benefit society. These behavior patterns are evident within a broader base of shoppers as well. As of 2021, 57% of shoppers are more likely to pass on a product if its packaging harms the environment. According to a 2022 survey, 53% of consumers would use a brand or store less if it wasn’t operating sustainably and 18% would stop using that retailer altogether.

Conversely, clearly labeling a product’s sustainability claims can increase conversion rates, as we saw in volume three of this series.

Will consumers pay more for sustainable products?

Research suggests that shoppers around the world are willing to pay more for products that display sustainability claims. Seventy-two percent of those surveyed would pay a premium for sustainable products, 52% would pay a little more, and 20% would pay a lot more. Additional findings show that more than 70% of consumers expressed a willingness to pay more for products with sustainable packaging, with 83% of younger shoppers willing to pay more. 

But how much more are shoppers willing to pay? Seventy percent of consumers surveyed are willing to pay at least 5% more for products following a sustainable supply chain. Shoppers state they would pay more for plant-based meat alternatives (81%), sustainable beauty (80%), dairy and dairy alternatives (78%), and meat/poultry (74%). Furthermore, the overwhelming majority of shoppers who prioritize environmentally friendly products state that they will continue to do so.

Almost congruently, we’ve seen a rise in prioritizing wellness with the rise in sustainability expectations. Even with an overall increase in grocery prices, Gen Z in particular is continuing to pay more for sustainably produced food, even when it comes to takeout.

Conclusion

While switching to sustainability could be quite an undertaking for many manufacturers, what consumers consider “sustainable” ecompasses a broad spectrum and presents ample opportunity to incorporate environmental measures within existing business models. 
Manufacturers themselves also run the gamut, approaching environmental efforts from various stages of sustainability capabilities. Most efforts, when bolstered by the ability to demonstrate how those efforts are reducing a company’s environmental impact, will resonate with consumers and bring brands to the forefront of the sustainability movement.

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