Sustainability vs value
For years we have been asked the question of whether sustainability is moving the dial yet in terms of how consumers make choices. For a decade this changed very little. However, across the last couple of years we have seen a massive uptick in the levels of awareness amongst consumers of sustainable initiatives. This conscious awareness is leading many brands to push the envelope and become leaders in sustainability – probably in front of the wave of consumer demand.
Brands like Heineken are seeking to reach net zero by the ambitious date of 2030, just 7 and a half years away. In the beer category there is of course a major player in Brewdog who are spurring the category leaders along with them, but this doesn’t take away from the fact that both Heineken and Brewdog are probably operating well in advance of consumer demand as it stands today. However, sustainability is predicted to become the number one driver of choice across many consumers in short order.
The problem with making such predictions of the future is running a straight line over current points of data and assuming it’s a growth line all the way to the future. However, we all know that growth is a curve and when you zoom out far enough you see that it just comes in cycles, like all waves. If we expect sustainability to be an ever-present conscious factor forever, then we’d be missing the macro-picture. It will be present until it’s deemed solved enough and will fall back.
What we’re finding is that we may be on a part of that upwards curve where it slows a bit. Naturally with people concerned about their household spending and income, they are focusing a little more on value for money and this is leading them to put sustainability on something of a back seat.
Why does this happen?
Our proprietary research has found that sustainability competes with price for one obvious reason. They are both very conscious factors. They tend to come in late in the decision-making process and it’s often hard for people to take them both into account at the same time.
Where the opportunity lies is making sure that sustainability is intertwined with subconscious decisions making factors which are considered at the earliest stages of repertoire formation. It’s through this that we can ensure that sustainability is remaining in contention, even when price becomes a major decision factor.
Our recent pulse report suggests that a third of people are now very value sensitive. They don’t want brands to talk about sustainability and they’re most likely to be concerned about value. This is likely to rise if there are further squeezes on the cost of living. This is especially the case for older generations, those without children and those in lower socio-economic groups.
- 29% of people say ‘I don’t care what brands stand for, as long as their products are good value for money’
- 29% of people say ‘I don’t care about brands communicating with me about sustainability’
- 7% of people say ‘I don’t think brands should take a stand on social issues’
Established ideals drive value perceptions
There was some good news in our pulse however, in that some social and environmental issues have become well-embedded in the collective psyche and people are much more willing to support them, which is driving the perceived value of those products. This is particularly the case for recyclability of packaging, fair trade, and cruelty-free ingredients. Supporting newer and especially more political stances does not appear to drive value perceptions.
- 63% would pay double the price for a product which was cruelty-free
- 58% would pay double the price for fully recyclable packaging
Actively sustainable people trust British brands
We saw an interesting development in how local brands or nations who have cultivated a level of trust in their products did quite well in selling in sustainability as part of their brand story. Unfortunately, there were some nations where the expectations of quality are going hand in hand with the expectations of the ability to truly deliver sustainable products.
Levels of trust in brands from China and India is much lower in people who are more actively sustainable minded. Whereas trust is much higher in British brands as well as Japanese brands. Brands who are keeping an eye on their own footprint and reducing distance from them to their consumer will have a natural advantage for these people.
- 92% of those who are actively putting effort into behaving sustainably find British brands trustworthy, compared to 55% who find Chinese brands trustworthy
All the indicators are pointing towards an increase in pressure on sustainability across the months ahead. As consumers are pressured on price, so they pressure brands, and brands put pressure on their supply chain. Our expectations are that brands will be quickly pausing some of the cost additive sustainability initiatives which will result in some more seeking to highlight the work done already and some marketing departments may be tempted to greenwash. However, we already know that there is a skepticism around sustainability claims being made by brands, so this is a difficult path to walk.
We would love to see more brands who are committed to sustainability to be investigating the commercial benefits of delivering initiatives by evaluating them within our tools like S-Factor. It’s going to be really helpful to keep selling in the long-term commercial performance of sustainability within albeit sometimes niche groups, but also the wider population.