Nyle Casey 
Circana research indicates that consumer purchases of sustainably produced CPG products have grown two times faster than their conventional counterparts since 2011.
Forward-thinking brands have taken notice of this growing trend and adopted eco-friendly manufacturing processes and materials responsibly sourcing. However, they face obstacles such as perception that sustainable products are more expensive.
Consumer Awareness
As consumers become more conscious of their impactful consumption habits on the environment, they’ve begun altering their shopping and purchasing patterns accordingly. Consumers now prioritize brands with environmentally sustainable practices and those offering ethical supply chains when selecting products to purchase.
As consumer preferences shift towards more eco-friendly offerings, retailers must ensure their sustainable offerings satisfy consumer quality and price expectations. According to NRF research, consumers searching for these offerings use various strategies such as reading product labels or consulting third-party certifications; among these are reading labels or consulting third-party certifications as the most commonly chosen ways.
Consumers are more willing than ever before to pay premium prices for products with sustainable claims. Recent surveys such as those by Business of Sustainability reveal that approximately 80% of people prefer purchasing from eco-friendly companies; among those aged 18-34 this number reaches 84%!
Government Support
Governments as the world’s primary buyers of goods and services can significantly drive sustainability adoption by setting policies to require or encourage the purchase of greener products. A growing number of governments have set carbon reduction targets – some even legally binding ones – with the aim of reaching net-zero emissions by the year 2050.
Consumers can also play a vital role in driving sustainability initiatives by altering their purchasing behaviors. For instance, some consumers seek out beverages with attributes associated with sustainability (e.g. healthy, high quality beverages without guilt and socially responsible production processes). Companies can attract these customers by including environmental claims or certifications on product packaging to attract these purchasers.
Survey results demonstrate that most consumers choose sustainable shopping options out of an effort to preserve the environment, with almost 30% concerned about production waste and 17% with animal welfare issues. Unfortunately, retailers and brands face challenges related to misperceptions from customers; one recent poll revealed that over 100% of senior retail executives believe consumers assume they are not transparent about their sustainable efforts.
Product Innovation
As demand for eco-friendly products grows, businesses must adapt in order to keep pace with customer expectations. Sustainable innovation involves designing products with reduced environmental impacts throughout their product lifecycle – such as using renewable materials and optimizing energy consumption or supporting recycling programs. It may also include creating eco-friendly packaging. Examples of sustainable packaging innovations may include using recycled or biodegradable materials like paper, cardboard and biodegradable plastics.
Companies that prioritize sustainability can foster trust with customers and become industry leaders. Patagonia, for example, makes sustainability the core element of its business model, encouraging customers to repair and reuse products, offering transparent supply chain information and supporting fair labor practices – initiatives which have earned Patagonia an incredible customer following.
Pricing
As sustainable products have increased their presence in the marketplace, consumers are more willing to pay a premium for them. According to a 2023 report by Circana and New York University Stern Center for Sustainable Business, products labeled sustainable have an overall market share of 17% and grow 2.7x faster than non-sustainable offerings.
However, simply adding an eco-friendly label won’t convince consumers. They want authenticity and transparency from companies; they have grown tired of fake climate pledges, greenwashing schemes and wasteful products; they want companies to change their practices according to strict ethical standards.
As a result, many companies are reconsidering their sustainable offerings and making adjustments to existing products, while increasing investments in environmentally conscious initiatives. Doing this may lead to higher profits and strengthened brand reputation if their commitment to sustainability is genuine; otherwise they could lose market share or face increased regulatory scrutiny.
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