News • 27.07.2020

Sustainability is surviving COVID-19

Trends and consumer demographics for sustainable products and brands

A green stamp that has printed a leaf on a paper
Source: PantherMedia/Olivier26

The NYU Stern Center for Sustainable Business and IRI® published the results of new research examining consumer purchases of sustainability-marketed consumer packaged goods in the US and taking a closer look at the top 10 states in terms of per capita spending on sustainability-marketed products.

Results from the latest research include:

COVID-19 findings

  • During a period of record CPG growth, sustainability-marketed products continued to grow with 16.8% dollar market share YTD, up 0.6 ppts vs. 2019.
  • During the week ending March 15, 2020, when CPG sales peaked due to COVID-19, sustainability-marketed products experienced a +1.9 ppts share increase (vs. the prior week), and dollar sales increased 56% during that same period. The categories that experienced the greatest share growth in sustainability-marketed purchases that week were paper products, weight control products, coffee and soap.

Market growth findings

  • From 2015 to 2019, sustainability-marketed products contributed 54.7% of overall CPG market growth while representing 16.1% dollar share of the category in 2019

Pricing findings (analysis excludes store brands)

  • On average, across 35 CPG categories examined, sustainability-marketed products enjoyed a sizable premium of 39% over conventionally marketed products, with their price premium widening since 2014.
  • Notwithstanding the high premiums, sustainability-marketed products grew over seven times faster than conventional products, demonstrating consumers’ strong preference for these products and their willingness to pay higher prices.

Demographic and geographic findings

  • Consumers in upper incomes and with higher levels of education are more likely to buy sustainability-marketed products than other groups.
  • Millennials are more likely to buy sustainability-marketed products. However, most sustainable purchases are attributed to Generation X and baby boomers due to the size of their cohorts.

“Consumers recognize that they can influence brands to ‘do the right thing,’ and in these days of COVID-19, #BlackLivesMatter and climate change, doing the right thing has never been more important. Purchasing of sustainable products is a trend with staying power,” says Professor Tensie Whelan, founding director of the NYU Stern Center for Sustainable Business.

“Sustainability-marketed products are a key to winning with millennials and Generation Z,” said Larry Levin, executive vice president, Market and Shopper Intelligence, IRI. “Leveraging the goodness of your company with compelling brand stories is an opportunity to build long-standing relationships with these important segments.”

Source: NYU Stern Center for Sustainable Business (CSB)

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