Several interesting research studies about consumer attitudes toward sustainable products and green packaging have been conducted recently. The Grocery Manufacturers Association conducted a study with Deloitte on the topic, titled: “Finding the Green in Today’s Shoppers: Sustainability Trends and New Shopper Insights.”
Likewise, IRI issued its own report with its findings recently: “Sustainability: CPG Marketing in a Green World.”
The gist: consumers have not pulled back from buying green, slow economy, decreased purchasing power, or not. That goes for products as well as packaging. Here’s the thing, though, sustainable products and packaging are still not the primary purchase motivator among consumers. However, when analyzing competing products, consumers are more likely to purchase one that offers sustainability features over ones that do not.
While less than a quarter of consumers, roughly 22% consistently buy “green,” fully 54% of shoppers are weighing sustainability issues according to the GMA-Deloitte findings, as reported in Environmental Leader.
The Hartman Group’s recent “Sustainability Outlook: The Rise of Consumer Responsibility” points to consumer expectations where packaging is concerned, as well. An excellent Brandweek article summarized the firm’s survey findings in a concise, informational manner.
What it all boils down to:
- Consumers are increasingly aware of sustainability and willing to purchase green products/packaging even though they cost more and the economy is tough.
- Consumers have increasing expectations that brands/companies will offer greener products and incorporate greener practices, in general. However, they are finding it hard to identify green products/packaging on the retail shelf in many cases.
- Consumers are confused about claims made and unsure in many cases about whether or not greenwashing is taking place, making it incumbent on companies to be truthful, transparent and offer solid third party accreditation confirming sustainable practices, if/when appropriate.
- Consumers need more education on sustainability issues and are turning to companies for more information on websites and packaging. They also need more point of sale information at the retail shelf.
Questions:
- Do you agree with the findings in these studies? Would you purchase one product over another if it was more sustainable than the other products on the shelf?
- Do you think–given the economy at present–you’d pay more for a greener product or prefer to wait until finances improve?
- Do you have problems identifying green product options on the retail shelf in some cases? What could manufacturers do to make it easier to find sustainable products in your opinion?
- Which brands do you think do a good job educating consumers about green initiatives on their packaging, point-of-sale materials or web sites?
I’d love to hear from you.
What’s not clear is the incremental price that consumers are willing to pay for green packaging. The concept is a non-starter if this is any more than the change we drop into the glass jar on the counter.
Thanks for weighing in, Gagan. You raise an interesting issue. Consumers have said over and over again that they are willing to pay more for greener packaging. Question is: how much more, as you pointed out. I suspect that saying this is one thing, but doing it is another. I don’t think many consumers would pay considerably more for a product in green packaging vs the neighboring products on the shelf. That’s why costs have to be factored in and brought into line.
I appreciate your comments, Gagan.
Miller Zell actually did similar research and found the premium threshold for green products to be in the neighborhood of $0.10.
You can download a copy of the results here.
http://insidetheaisle.com/mz-research-surveys/
Miller Zell actually did similar research and found the premium threshold for green products to be in the neighborhood of $0.10.
You can download a copy of the results here.
http://insidetheaisle.com/mz-research-surveys/
Thanks, Alex, for furnishing research on this subject. I’m sure for most food, beverage and other staples an additional few cents is correct. I’m willing to bet tht in the case of luxury products, or products with perceived greater value, the market will bear more than this.
I appreciate the link to the actual research, Alex. Thanks again.
While the price difference may be a factor, I figure it to be quite small. Besides, can a shopper know from an “all else equal” scenario the sustainable packaging’s marginal cost? They don’t know what’s on the bill of materials. Too many factors influencing price for there to be a rational causation and thought attribution.
I think retailers should be making proactive demands on manufacturers, just like Costco and Sam’s Club do. There’s no reason why Best Buy for example, can’t ask companies to use 80% less PVC and more bonded paper for pegboard clamshell packaging.
Hi Mario,
Thanks for weighing in with some excellent points here. Let me address the consumer pricing issue first. Customers don’t know how much packaging actually costs them but they do compare prices among groups of products. While willing to pay more for merchandise in greener packaging, they have a limit in mind.
As far as retailers driving this trend, Wal-Mart can actually be credited for pushing its 66,000+ suppliers to not only develop greener packaging but to be accountable for it. Sam’s Club, which you cite, is a Wal-Mart company.
Wal-Mart’s initiative has pushed the entire consumer product industry in this direction. This has directly benefited retailers across a wide spectrum because they purchase and resell the same products. If retailers that have private label brands begin to use greener packaging options, and push yet more suppliers to do the same, the whole greener packaging movement will gain yet more impetus.
Thanks, Mario, for adding a great deal to this conversation.
A number of studies have indicated that most consumers are willing to pay between a 5 and 9% premium for comparable “green” consumer products. I assume this includes total price, i.e. product and packaging.
Hi Mark,
Thanks for weighing in here. I believe you’re right: the premium for green packaging factored in along with the product will be borne by the market at an additional 10% or less all inclusive from what the researchers are saying. Rapid changes in packaging due to technology are likely to have a huge impact on the kinds of substrates we’ll be using in the near future. As is the case with everything, the more these materials become widely available, the lower the costs.
Thanks, Mark. I appreciate your comments.
Ted,
I’m thrilled to find someone like you with so much interest in green cpg packaging, willing and able to share research data along with concise editorial with the public! Count me “in” as one of your subscribers!
BTW – I’m in favor of paying 10% more for greener packaging, and troubled by every package that enters the household that is not recyclable, especially munchie bags of late!
My interest, aside from civic conscious, is to discover business opportunities during the transition phase to greener packaging (and healthier products). For example, as a starting place, if a recyclable munchie bag exists, for say pretzels, I would like to discover who makes such a bag, then introduce it to the company that makes my favorite pretzel and ask the CEO why his company is not using it.
If such a bag is not readily available, I’d like to know who is trying to develop one, then determine how I might help them succeed.
Can you help me discover who is making, or developing, recyclable muchie bags?
Devoted fan,
Jim Rogers
Hi Jim,
Thanks for the kind words. “Devoted fan”? . . .I’m blushing.
To answer your question, Sun Chips, a division of Frito-Lay, is developing a totally compostable bag and I’ve blogged about it quite recently. For more info, check out this article at Tree Hugger: http://www.treehugger.com/files/2009/04/the-consumer-scoop-on-sunchips-100-percent-compostable-packaging.php
Hope this helps, Jim. All the best.
Great reading and thanks again for another interesting piece of writing.