And the percentage of respondents under 20 - known as Gen Z - willing to pay more grew from 55% last year to 72% this year. For example, one study found Spanish consumers were willing to pay 22-37 per cent more for green products, but Japanese consumers were only willing to pay 8 per cent to 22 per cent more for . Companies that dont have sustainability as part of their core value proposition need to act now to protect against future reputational impacts and loss of market share, said Shikha Jain, author of the study and Partner at Simon-Kucher & Partners. A new report reveals all. Queensland University of Technology apporte un financement en tant que membre adhrent de TheConversation AU. Brands can bring their CSR efforts to life through authentic storytelling. Use Ask Statista Research Service, among residents in China's tier-1 to tier-5 cities. Environmental Choice New Zealand is the official environmental label body that awards certificates and lists environmentally friendly products for green homes or businesses. Across industries, willingness to pay for sustainability is highest in Consumer goods (38 percent), and lowest for Energy/utilities (31 percent). Millennials gave an even more impressive showing, with 73 percent indicating a similar preference." The hierarchy among drivers of consumer loyalty and brand performance is changing, says Farraj. Profit from the additional features of your individual account. In fact, an analysis of retail sales data indicated that natural products were seeing growth in otherwise declining categories. According to the report, sales of consumer goods from brands with a demonstrated commitment to sustainability have grown more than 4% globally in the past year, while those without grew less. Broadcasting sustainability would capture an untapped consumer base but also sow distrust, said Pete Davis, CEO and Co-Founder of GreenPrint. Millennials represent the consumer market of the future, and it behooves corporations to read the tea leaves. Toilet tissue, facial tissue, milk, yogurt, coffee, salty snacks, and bottled juices were among those with the highest share in their category (more than 18%), while laundry care, floor cleaner, and chocolate candy had less than a 5% share. About three in four Millennials (74 percent) and Generation Z consumers (72 percent) are willing to pay more for sustainable products and services, according to The Nielsen Company. Sustainability is a worldwide concern that continues to gain momentumespecially in countries where growing populations are putting additional stress on the environment, says Grace Farraj, senior vice president, Public Development & Sustainability, Nielsen. New York-based Nielsen forecasts the market to reach somewhere between $142.4 billion and $150.1 billion by 2021. (January 18, 2023). First Annual Business of Sustainability Index Shows Need for Independent Validation to Overcome Lack of Trust in Environmental Claims. I can attest to the fact that sustainability isn't just something I "sorta kinda" consider--it's one of the primary reasons I either buy or don't buy from consumer brands. It can be used to help people improve their thinking and decisions. 'Global consumer-goods' brands that ignore sustainability increase reputational and business risk' Nielsen's research also found that 66 percent of consumers were willing to pay more for sustainable goods in comparison to 50 percent in 2013. Small brands in this space are also attracting the bigger players attention Unilever has purchased brands with loyal followings such as Seventh Generation, Sundial Brands, and Pukka Herbs. In a study of more than 21,000 US households, Nielsen analyzed consumers' attitudes towards various sustainable attributes across 13 product categories. Question: Socially conscious Consumers In March 2015, a Nielsen global online survey "found that consumers are increasingly willing to pay more for socially responsible products. People want to feel that whatever they are buying aligns with their personal values. In 1989, 67% of American consumers stated that they were willing to pay 5 - 10% more for sustainable products. TV ads highlighting a companys commitment to positive social and/or environmental impact are influential in the path to purchase for 34% of global respondents. Products that had a sustainability claim on-pack accounted for 16.6% of the market in 2018, up from 14.3% in 2013, and delivered nearly $114 billion in sales, up 29% from 2013. But nearly 60% are unwilling to pay more money for that eco-friendly product.. Please create an employee account to be able to mark statistics as favorites. Nielsen Instead, we focused on whether the marketing of a product as sustainable would drive purchases. Percentage points exceeding 100 percent are probably due to rounding. Create a free account and access your personalized content collection with our latest publications and analyses. But brands can nudge consumers towards more eco-friendly products. And investors should support companies in making the investments needed for the pivot. Sixty-six percent of global respondents say they are willing to pay more for sustainable goods, up from 55% in 2014 (and 50% in 2013). Again, younger generations lead the way as higher shares of Generation Z (39 percent) and Millennials (42 percent) are willing to pay for sustainability compared to Gen. X (31 percent) and Baby Boomers (26 percent). Image:Caleb Jones/Unsplash. For example, one study found Spanish consumers were willing to pay 2237% more for green products, but Japanese consumers were only willing to pay 822% more for green products. In 2014, 65% of total sales of consumer goods measured globally were generated by brands whose marketing conveyed commitment to social and/or environmental value. Consumers' demand for sustainable products is increasing. [Online]. 77% of Americans are concerned about the environmental impact of products they buy. However, as demand grows for sustainable products and they become the expectation rather than the exception, sustainability will become table stakes and hygiene factors, said Jain. A 2014 Nielsen study found that 55 percent of global consumers are so passionate about the planet and its people that they're willing to pay more for products and services provided by. We made no attempt to assess if products marketed as sustainable were, in fact, sustainable. Sustainability-marketed products are growing quickly in almost all CPG categories. Rudominers lifelong passion is using communication to foster social change. In 1998, the Council of the European Union passed a directive that setrules for the protection of farmed animals -- a directive updated in 2009 that led tofar more ethical treatment of animals there. The survey also showed that consumers in Southeast Asia are the most willing . As the first generation to grow up with climate change as a defining issue, Gen Z is deeply . Younger shoppers are the most willing to. Products and services that are offered from socially responsible companies may be able to charge more, according to a report by Nielsen. In fact, the majority (73%) of global consumers say they would definitely or probably change their consumption behavior to reduce their impact on the environment. In 2013, India banned all animal testing, then banned even the import of beauty products that engage in animal testing. Simon-Kucher & Partners is regarded as the worlds leading pricing advisor and thought leader. According to a survey conducted among Chinese adults in November 2022, around 66 percent of respondents stated that they were willing to pay more for sustainable goods. According to a recent survey, 73% of Gen Zers are willing to pay more for sustainable products. We assessed third-party certification, such as USDA organic and Fair Trade, and the packagings claims about undesirable traits (such as genetically modified, BPA, parabens, antibiotics, growth hormones) and positive characteristics (local, grass-fed, compostable, animal crueltyfree). ATLANTA--(BUSINESS WIRE)--Americans are seeking out and are willing to pay a premium for environmentally friendly products, according to a new study from GreenPrint, an environmental technology company. There are several reasons for this. 2023 Nielsen Consumer LLC. GreenPrint Conveying CSR efforts to Millennials requires authenticity, and a unique approach as Millennials grew up with the Internet and want their voices heard. The rise in the percentage of respondents under 20, also known as Generation Z, who are willing to pay more was equally strongfrom 55% of total respondents in 2014 to 72% in 2015. Inherently skeptical, Millennials will punish companies on social media not deemed to be fully transparent as well as those that pay lip service to CSR and causes important to them. : (617) 231-4551 Good Environmental Choice Australia is a similar organisation. Retail data backs up the importance of these influencers. Green consumption includes more environmentally friendly raw materials, packaging and production methods, lower carbon emissions during transportation and use, and better protection for people involved in production and trade. So when it comes to purchasing, they are doing their homework. NYU Sterns Center for Sustainable Business just completed extensive research into U.S. consumers actual purchasing of consumer packaged goods (CPG), using data contributed by IRI, and found that 50% of CPG growth from 2013 to 2018 came from sustainability-marketed products. A majority of people have doubts when companies say they are environmentally friendly, with 53% of Americans never or only sometimes believing such claims. Commercial research says 46% of consumers are more inclined to buy a product if it is eco-friendly. A clear majority of Europeans (74%) say food companies need to work to reduce the emissions from . Nature is worth $44 trillion to the global economy, according to a recent World Economic Forum estimate. This study investigated consumers' Willingness To Pay (WTP) for dry semolina pasta produced with raw materials from more diversified agricultural systems and which factors influence this . While 66 percent of global consumers are willing to pay more for sustainable goods, a full 73 percent of Millennials are (Nielsen defines Millennials as those born from 1977 to 1995). All Rights Reserved. They accounted for 16.6% of the market in 2018, up from 14.3% in 2013, and delivered nearly $114 billion in sales. What do these findings mean for corporate managers and investors? This figure is even higher for millennials (73%) and Generation Z (72%). Interestingly, of the people that are willing to pay a sustainability premium, the premium amount is lowest for Consumer goods (22 percent premium on average) it is highest for Financial services (27 percent premium on average). Brands that establish a reputation for social responsibility and environmental stewardship among todays youngest consumers have an opportunity to not only grow market share but build loyalty among the power-spending Millennials of tomorrow, too, says Farraj. Are consumers really willing to pay more for sustainable products? The Generational Gap: Younger consumers are more actively taking steps towards being more sustainable. While companies are increasingly using environmental claims to appeal to consumers, they also attract greater scrutiny. .chakra .wef-facbof{display:inline;}@media screen and (min-width:56.5rem){.chakra .wef-facbof{display:block;}}You can unsubscribe at any time using the link in our emails. The U.S. sustainability market is projected to reach $150 billion in sales by 2021, according to Nielsen . Mr Harrison says, however, that customers are becoming more canny. While this statistic is telling on its own, what's more telling is that 81% of those interviewed said that they planned to buy more sustainable products over the next five years.. And environmental consciousness isn't a new trend among consumers. That across the board, consumers are willing to pay extra for one thing: sustainability. statistic alerts) please log in with your personal account. Pay more, waste less: 32% of consumers would pay more for a product from a brand that they believe is committed to sustainability. What is the World Economic Forum doing about the circular economy? I recently spent $38 on a t-shirt from abrand I would trust with my life: Janne Robinson. While 66 percent of global consumers are willing to pay. Consumers also see themselves as the agents of change, implying that the call to action for companies to adapt has never been more urgent. I don't dream of a world with 99 cent hamburgers available at any roadside fast food place. In fact, almost half (41%) of consumers from around the world say that they're highly willing to pay more for products that contain all-natural or organic ingredients. Our own 2019 report, " The State of Consumer Spending: Gen Z . Products that had a sustainability claim on-pack accounted for 16.6% of the market in 2018, up from 14.3% in 2013, and delivered nearly $114 billion in sales, up 29% from 2013. We are interested in estimating the proportion of all consumers willing to pay more. The top attributes that more than one-third of consumers were willing to pay more for included: cruelty free (31%), farm raised (32%), organic farming (33%) and environmentally friendly (33.5%). Commercial research says 46% of consumers are more inclined to buy a product if it is eco-friendly. In its2015 Nielsen Global Corporate Sustainability Report, Nielson found that 66% of global consumers say they are willing to pay more for sustainable brands up 55% from 2014. It also found that 73% of global Millennials are willing to pay extra for sustainable offerings up from 50% in 2014. When browsing beauty products, my first question is, "Is it cruelty-free?" Businesses are in a bind. Reports such as Nielsen Insights suggest the majority (73%) of consumers would change their consumption habits to reduce their impact on the environment, and almost half (46%) would switch to environmentally friendly products. According to Chicago-based Nielsen's 2019 "Protein Proliferation" report, 19% of consumers surveyed said that they intended to increase their consumption of meat and seafood more than any other protein group. Consumers have some understanding of what makes a product sustainable but it is not necessarily a consideration when making a purchase Although the majority of consumers recognise what makes a product sustainable i.e. World Economic Forum articles may be republished in accordance with the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International Public License, and in accordance with our Terms of Use. For this reason, the demand for sustainable foods is growing in the market. to incorporate the statistic into your presentation at any time. This indicates an opportunity for consumer-goods brands that have already built a high level of trust with consumers to evaluate where best to introduce sustainable products into the market to drive growth, says Carol Gstalder, senior vice president, Reputation & Public Relations Solutions, Nielsen. Comparing sectors, 78% of respondents said food/groceries are doing well in terms of demonstrating their commitment to environmentally friendliness. A survey by Nielsen found that 66% of consumers are willing to pay more for sustainable products. We help our clients achieve growth and profit targets by applying practical, evidence-based strategies. A 2015 global online survey by Nielsen reflected Brabeck-Letmathe's comments, with research showing that 66 percent of the 30,000-plus respondents said they would be willing to pay extra for . But nearly 60% are unwilling to pay more money for that eco-friendly product. lire aussi : A paid subscription is required for full access. The views expressed in this article are those of the author alone and not the World Economic Forum. This sum will continue to grow exponentially as more Millennials reach peak buying power. Available: https://www.statista.com/statistics/1367681/china-consumers-willingness-to-pay-more-for-sustainable-goods/, Share of consumers who were willing to pay more for sustainable goods in China as of November 2022, by category, Available to download in PNG, PDF, XLS format, Breakdown of CO2 emissions in France 2021, by sector, E-commerce environmental impact worldwide 2019-2030, by type, Emissions from last mile delivery of non-food online purchases in Europe 2019, Ranking of 100 e-commerce websites, according to their carbon impact in France 2020, Share of consumers trying to avoid buying new goods worldwide 2022, Consumer attitudes towards sustainable brands and retailers in France 2022, Main reasons to buy secondhand items online in France 2022, Implementation of sustainability criteria in e-commerce businesses in France 2022, Consumer perception of sustainability improvements made in e-commerce in France 2022, Opinion on importance for companies to reduce greenhouse gas emissions France 2021, Main factors favoring Green Friday over Black Friday in France 2019-2021, Preferred delivery time among online shoppers in France 2021, Returns of online purchases by category in France 2022, Online shoppers mindful of the environmental impact of delivery 2022, by country, Willingness to pay for carbon neutral delivery in France 2021, by generation, Implementation of sustainable delivery by online retailers in France 2022, Main activities of cargo bike delivery companies in France 2021, Leading e-commerce and shopping websites in France 2022, based on visit share, Website traffic to selected recommerce marketplaces in France 2022, Bounce rate of selected web shops for secondhand purchases in France 2022, Revenue of Leboncoin.fr in France 2015-2021, Marketplace revenue of Cdiscount.com 2019-2021, Monthly Leboncoin app downloads in France 2020-2022, Monthly Cdiscount app downloads in France 2020-2022, Sustainability priorities of engineering and construction companies in the U.S. 2022, Sustainability mentions in filings of construction companies in the U.S. 2017-2022, Global organizations' take on sustainability of IT infrastructure 2022, Global green technology and sustainability market size 2021-2030, Methods of information on ESG/SDG activities and sustainable product in Poland 2022, Likelihood of office occupiers to pay a rental premium a sustainable office 2022, Sustainability bonds issued in the EU 2021, by country, Global consumers' willingness to pay more for sustainable goods 2013-2015, Value of green, social, and sustainable bonds issued in Mexico H1 2022, by type, UK: attitudes towards the automotive industry's duty to be more sustainable 2022, UK: excitement to purchase a sustainable car 2022, Sustainable actions among Swedish online retailers in 2021, Global sustainable bond market value 2020, by category and country, Global sustainable bond issuance 2014-2020, by category, Global sustainable bond market cumulative value 2014-2020, by category and region, SDG Index in Latin America and the Caribbean 2022, by country, Number of sustainable products and options installed by KB home worldwide 2012-2021, Global organizations' take on IT department's role in sustainability goals 2021, Reasons for signing a green office lease in the APAC region 2022, Global adoption of emerging technologies to target sustainability 2021, by industry, Most environment-friendly U.S. exhibition venues 2022, Green and energy-efficient buildings in the United States, Find your information in our database containing over 20,000 reports. 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