Sustainability isn’t just a buzzword, it’s a movement. Consumers care about the environment, and they want the brands they buy to care, too.
A recent Nielsen ratings report found that 81 percent of people around the world feel strongly that companies should help improve the environment. For proof consumers are pledging their support for companies that are Mother Nature’s advocates, look at their wallets. Nielson ratings found product sales grew twice as fast for companies with specific environmental impact claims.
“No matter what, sustainability is no longer a niche play: your bottom-line and brand growth depend on it,” the report reads.
Driving Growth
Nielson looked at three products sustainability efforts, two which are fermented: chocolate, coffee and bath products. Chocolate was the main focus of the report.
Cocoa is grown in difficult circumstances. Of the world’s cocoa supply, 90 percent of it is grown on small family farms by about 6 million farmers. Cocoa farmers work in rough circumstances. Cocoa is a fragile crop that grows in hot, rainy, tropical environments and the trees don’t yield cocoa pods until its fifth year. Farmers work hard and profit is low.
Research drilled down to specific consumer sentiments about chocolate, from environmental claims (like ethically sourced, made with renewable energy or carbon neutral), to the absence of artificial ingredients and fair trade.
Environmental Claims
Chocolate with environmental claims account for an extremely small percent of the chocolate category, only 0.2 percent. But it grew four times the rate of sales, from 22 percent from March 2017 to March 2018. Unit growth is also huge. Chocolate with environmental claims is “flying off the shelves at a rate five times faster than the overall market.” Environmental chocolate had a 15 percent unit sales growth compared to the competition with just 3 percent sales growth.
Fair trade
Fair trade chocolate is performing well, too. Fair trade chocolate only makes up 0.1 percent of the total chocolate market, but dollar sales growth for fair trade chocolate doubles the rest of the category (10 percent versus 5 percent). Unit sales are five times higher for fair trade chocolate (15 percent versus 3 percent).
No artificial ingredients
Unit sales of chocolate made without artificial ingredients are growing at the same 3 percent rate as the rest of the chocolate category. But dollar sales of clean chocolate are triple the market (16 percent versus 5 percent). The report infers that, because clean chocolate is priced higher than chocolate made with artificial ingredients, consumers will pay more for a sustainable choice.
The report reads: “In many ways this space is evolving; however, what we do know is that sustainability presents an opportunity to be creative about innovative growth. Embedding consumer demand for sustainability into your company strategy and product pipeline requires data specific to your brand footprint and consumer profile.
Sustainability: “Life and Death Matter”
Consumers are empowered by evidence that “sustainability has become a life and death matter.” The World Health Organization estimates 12.6 million people die every year from environmental health risks. Air pollution and water quality are listed as top concerns for people around the world, the survey found. Increasing cases of asthma and typhoid are linked to deteriorating air and water quality.
“In light of these concerns, consumers around the world are making adjustments in their shopping habits,” the report reads. “While still juggling convenience, price and awareness along with their need to better the world, they’re looking for companies to step up as partners in their quest to do good.”
Another finding of note: though protecting Mother Earth is an important issue for survey respondents globally, consumers in developing countries are more concerned. The percentage of European and North American respondents who said they were “extremely” or “very concerned” about environmental issues was lower than respondents in third-world countries, like Latin America, Asia-Pacitic and Africa/Middle East.
Other interesting finds: environmentally advocacy is typically attributed to Millennials. Millennials are the generation most vocal advocating for corporate social responsibility. But the ratings found every generation and every gender cares deeply about the health of the planet. While 85 percent of Millenials (age 21-34) ranked a company’s environmental responsibility as “extremely” or “very” important, other generations weren’t far behind. Generation Z (15-20) was at 80 percent, Generation X (age 35-49) was at 79 percent, Baby Boomers (age 50-64) were at 72 percent and the Silent Generation (age 65+) was at 65 percent.
Environmental Champions
Forbes shares a detailed list of how companies can “champion” climate change. Their tips relevant to food producers include:
- Measure your carbon footprint annually through a third party audit.
- Develop an action plan, from reducing supply chain emissions to improving energy efficiency to cutting unnecessary transportation environmental hazards, like shipping by sea freight instead of air or using regional warehouses.
- Set emission reduction goals, then monitor your progress.
- Support environmental change politics by using lobbying influence for policymakers who are working to improve the health of the planet.