Do Consumer Favor Sustainable Brands for Their Products and Services Needs? NYU Stern School Research Dives Deep Into the Data For Answers

G&A's Sustainability Highlights (06.29.2019)
Jul 1, 2019 10:30 AM ET
Newsletter

Many people in consumer marketing are wondering!  In these weekly commentaries the G&A Institute team offers media and experts’ shared perspectives on various issues and matters related to corporate sustainability, responsibility; and, sustainable, responsible and impact investing.

In recent months the content frequently has focused on trends in the consumer market -- are consumers reacting to brand-facing companies positioning themselves as sustainability leaders? Is this a successful strategy?  Worth the effort?  Are consumers now favoring sustainable or green (or pick your term of definition) for their products & services at retail?  Wondering?
Our news, feature and research results -- such as in the fashion and footwear industries, the auto industry, food & beverages, and certain other categories with brand leaders often introducing sustainable products alongside their usual cash cows. We have some items for you this week along these lines.

Writing in the Harvard Business Review, Tensie Whelan, professor at New York University Stern School of Business, and leader of the NYU Stern Center for Sustainable Business, and Randi Kronthal-Sacco, director of Corporate Outreach for the Center (and formerly with Johnson & Johnson) describe the results of their recent in-depth research project. 

This research centered on trying to answer the question -- do U.S. consumers actually purchase sustainably marketed products?  (Spoiler alert: yes – you must read the HBR article to find out more.) 

Whelan and Kronthal-Sacco used volumes of data sets from bar scan codes at retail for food, drug, dollar, and mass merchandisers, looking at 36 categories and 71,000+ SKUs, accounting for 40% of consumer products goods (CPG) sales over a 5-year period.

So, what did they find to be the largest share of sustainability-marketed products?  Almost $1-in-$5 purchases at retail are for toilet tissue, facial tissue (think: forest products); milk, yogurt (the yield of countless dairy farmers); coffee (lots of attention on the global coffee-growing belt circling the Earth, and worker conditions therein); salty snacks (really?); and bottled juices (you notice that Coke and Pepsi and other beverage marketers are advertising their shift away from sugary drinks).  At the bottom of market share:  laundry care, floor cleaners and chocolate candy (accounting for a 5% share).

Say Tensie and Randi:  pay attention, marketers and those all along the retail value chain, from grower field and factory floor to shelf space.  Consumers are voting with their dollars, for sustainable and against un-sustainable brands.  Winners in the corporate sector include PepsiCo and Unilever; laggards include Kraft Heinz. (Unilever:  think labels like Seventh Generation, Sundial Brands and Pukka Herbs.)

And we are seeing in the many stories we bring you each week about consumers and sustainability, the future for sustainable CPG at retail is increasing – look at the apparel industry.  The agora is alive and well with many more sustainably branded products on the shelves.  That’s the good news for sustainability professionals.

The NYU researchers used data from IRi (the research house for CGP, retail and health and beauty – information at: https://www.iriworldwide.com/en-US/Insights)

Congratulations to our colleagues Tensie Whelan and Randi Kronthal-Sacco at NYU Stern Center for Sustainable Business for sharing their insights and perspectives. 

This is just the introduction of G&A's Sustainability Highlights newsletter this week. Click here to view full issue.