Save the planet, delight consumers and improve the bottom line? Yes please.

FMCG brands have a long history of doing good. They often help communities in need, assist in a crisis, and even give back a portion of their earnings. In the past decade these efforts have expanded to include a focus on sustainability as companies look for ways to minimize and reverse FMCG’s impact on the environment.

Good for the planet and good for the bottom line

One of the most common sustainability practices in FMCG is to reduce waste: use less water in production, use less fuel with more efficient trucking routes, and eliminate unnecessary packaging. These are all great for the environment because it means less plastic circulating, fewer cardboard boxes to dispose of, and less CO2. But it also results in significant cost savings for brands as they buy fewer raw materials.

And the benefits don’t stop there. These efforts can also increase a brand’s perceived value. Consumers, especially young Millennials and Gen Z, seek out, and are willing to pay more for, environmentally responsible brands.

According to Kantar, the most environmentally conscious consumers are worth $382 billion dollars in spending power, up $78 billion from the prior year. Furthermore, 1 in 5 shoppers say they picked up more environmentally friendly habits in the pandemic. I don’t expect this demand to slow down anytime soon.

In fact, I expect FMCG will double down on their sustainability efforts to take advantage of these trends and to unlock more value for their brands as:

• Cost saving efforts to combat raw material cost increases
• A way to premiumize their brand perception
• An opportunity to drive consumer engagement and loyalty

Retailers are asking brands to do more about sustainability

There’s also pressure from the retail industry to get serious about sustainability. Walmart has asked its suppliers to join their efforts to avoid producing 1 billion metric tons of greenhouse gas throughout its global supply chain by 2030. In exchange for participating in Project Gigaton, Walmart offers suppliers incentives such as access to the lowest available financing rates to fund their working capital needs.

This year Walmart announced that their suppliers will be able to have their homegrown sustainability programs validated by the Science Based Targets Initiative, a nonprofit environmental reporting organization which provides climate change scores to companies against their environmental goals, helping measure progress.

Many other retailers also have incentive-based sustainability initiatives which reward brands for their progress. Some are now taking it a step forward and launching mandatory requirements, like Hy-Vee’s Seafood Supplier Code of Conduct (SCoC). The SCoC aims to ensure seafood suppliers provide safe conditions for their workers and use legal and transparent harvesting and production processing.

Sustainability is the quadruple win: good for the planet, a focus retailers, important to consumers, and good for a brand’s bottom line. That’s why I predict we’re going to hear even more from FMCG about sustainability in 2022.

All opinions are my own and do not reflect the views of my employer or any other organization I am affiliated with.