What do consumers believe is sustainable?

Do consumers think of sustainability when they are out in the marketplace? If they do, what aspect of sustainability do they care the most about??

Tough to find a single satisfactory response for a country with 1.4 billion consumers, you and I included. Research studies have green-signalled that purchasing behaviours are changing with an increasing reliance on a brand’s take on sustainability. The belief is then backed up with their wallet. A survey by Bain and Company found that 43% of Indian consumers rank sustainability as a top-five key purchasing criteria, yet sustainable products comprise only 5-6% by value within the consumer goods space. 20% are environmentally and socially conscious while 49% said they are more forced on health.??

On a global level, the choices are diversified. A study by Kerry shows that global consumers associate sustainability with several concerns, including ;

• Public hygiene and sanitation (80%)
• Environment and atmosphere preservation (80%)
• Food waste (78%)
• Health and nutrition (77%)
• Animal welfare and protection (76%)

Another element which is an integral part of sociable products is the packaging. Consumers appreciate and are willing to switch early on towards products that adhere to sustainable standards of packaging. This interest has influenced CPG brands to invest in reusable, recyclable and biodegradable packaging. Global brands too have stepped up to design environment-friendly packaging. Their agendas are reducing packaging waste to increasing the use of recycled resin in plastic packaging. The customer choice also made CPG brands innovate alternate waste reduction solutions. Water soluble bags have become one of the trending solutions along with seaweed and edible packaging. The water-soluble packaging market is set to reach USD 3.7 billion in another five years.?

So, does it mean the customers are willing to pay a premium??

A segment of customers are.?

Studies show that certain consumers are willing to pay more for sustainable products. [I have written amount the Indian consumer’s perspective in one of the LinkedIn posts ]. The challenge is that the interest might take a while to translate into a profitable purchase.?

Also, there is a caveat in the consumer segmentation.?

About 80% of participants of one of the Bain & Company surveys in India represented the top 60 percentile of income levels and 90% of respondents were from urban areas. This indicates that the cohorts aware of sustainability practices reside in the urban part of the country, making it difficult for brands to cater to a large section of society.?

Brands face several other challenges too. There is almost a 15% price difference between products adhering to sustainability practices and those that don’t.?Here is the data from Euromonitor International .

Experts have given insights into key factors that are driving the purchase behaviour among consumers. They say, having sustainability as the top value proposition isn’t enough. Brands are advised to layer up sustainability with nutrition and taste - two critical driving factors.?

The job isn’t done yet. CPG brands face major hurdles in educating both urban and rural consumers on why sustainable food products make a difference. Several retail players attain this through engaging communication on product packaging, e-commerce portals, and?social media channels. Some organizations are already investing in educational sessions for employees across functions, giving them clarity on the CSR and ESG initiatives undertaken by the company.?

If sustainability is the larger goal, then the CPG sector got to do all that it takes to make the customer aware and influence their choice. Because we all got to answer the consumer why they have to pay extra and what benefit does it give them. After all, no product or brand can thrive in the market without making consumers a part of the product’s journey to production.?