by Dave Wendland, vice president strategic relations, for Mass Market Retailers
Sustainability is generally defined as the avoidance of the depletion of natural resources to maintain an ecological balance. The three principles forming its foundation are profit, people and the planet.
In today’s market, a superior product is no longer enough to win a consumer’s favor. Shoppers are seeking much more than just features and benefits, rather they are looking for specific attributes and quality brands that align with their personal values.
In recent years, consumers have acted on their desire for more sustainable products, and sales data shows that they’re using their spending power to effect change. This past March, the NYU Stern Center for Sustainable Business and Circana, formerly IRI and NPD, released the 2022 update of the CSB Sustainable Market Share Index. This report examines consumer purchases of sustainability-marketed consumer packaged goods. Here are two key highlights from this research signaling continued growth for sustainably-marketed products:
- Their five-year compound annual growth rate (CAGR) sits at 9.48%, outpacing conventional counterparts at 4.98% for the same period.
- Despite high inflation and pressure on U.S. consumers’ wallets, these products outperformed conventionally marketed items across 36 categories and grew 0.3 points to 17.3% of purchases.
Another survey conducted by Kearny found that more than eight in 10 consumers take the environment into consideration when making purchases. In fact, for many shoppers, selecting a sustainable product has become a priority. Shoppers consciously and intentionally are selecting products that align with their values and believe they “make a statement about me” and that “it shows the world that they care.” Consumers are proud of the personal commitment to protecting the environment and the planet as a whole.
The Kearny study also discovered that companies could be doing more to clearly explain the environmental impact of their products. Additionally, pro-environmental impacts could be expanded in areas of packaging, promotional materials, displays and shipping containers.
- Plastics have fallen out of favor for consumers in recent years. However, alternatives may be more expensive compared to traditional packaging and may also be less effective. With those trade-offs in mind, companies are grappling with a very delicate balance, coupled with stringent regulations that are forthcoming by 2025.
- An increasing number of organizations are unveiling reusable packaging and/or containers that lend themselves to refilling, along with improved upcycling in their design. In these cases, consumer adoption will support their commitment to sustainable practices.
- Displays are another area for both brands and retailers to consider. Reducing physical footprint size results in less material. Engineering displays to be more efficiently produced also reduce the overall investment while creating a more sustainably produced solution.
- Another consideration with fixtures and displays is reusability. When properly tracked, pieces, parts and graphics that may be suitable for reuse at retail can be implemented accordingly, thus reducing unnecessary waste and unintended consequence associated with disposal of obsolete materials. Freight costs can also be reduced by minimizing shipments of duplicate parts and pieces. This is an area that HRG has leaned into heavily over the past decade — improving implementation, reducing waste and enhancing fixture utilization.
- From a promotional standpoint, COVID-19 accelerated the move for some retailers away from traditional circulars with more emphasis and commitment to digital marketing. Such a move — properly executed — lends itself to more personalized promotional efforts and is decisively more eco-friendly.
- Finally, and especially in light of increased e-commerce and direct-to-consumer demands, shipping containers and boxes should be evaluated. Exchanging disposable pallets, boxes and shipping containers with reusable alternatives can all make a significant difference.
Companies that are committed to sustainability will likely succeed in the future. Organizations must align their operations and overall messaging to build trust and transparency. This may not only be a differentiator — it is decidedly the right thing to do.