2018 Was the Year of the Sustainable Consumer
NEW YORK — Many U.S. consumers have touted their desire for more sustainable products for years, and the sales data shows that they’re using their spending power to effect the change they want to see in the world, according to Mintel.
Nearly half (48 percent) of U.S. consumers say they would definitely or probably change their consumption habits to reduce their impact on the environment. These consumers are putting their dollars where their values are, spending $128.5 billion on sustainable fast-moving consumer goods (FMCG) products this year.
Since 2014, influential shoppers have grown sustainable product sales by nearly 20 percent with a compound average growth rate (CAGR), which is four times larger than conventional products (3.5 percent vs. less than 1 percent comparatively). By 2021, Nielsen expects sustainably minded shoppers to spend up to $150 billion in sustainable FMCG goods, an increase of $14 billion-$22 billion.
Today, sales of products with sustainable attributes make up 22 percent of the total store, with organic, sustainable and clean attributes driving the majority of the sustainable category’s growth. Notably, sustainability’s share between 2014 and 2017 grew nearly 3 percentage points, while conventional products’ share of sales dropped by almost four. By 2021, we expect sustainable goods will make up 25 percent of store sales.
In the U.S., there is a large gap between generations when it comes to sustainable purchase intent. When surveyed, millennials are twice as likely (75 percent vs. 34 percent) than baby boomers to say they are definitely or probably changing their habits to reduce their impact on the environment. They’re also more willing to pay more for products that contain environmentally friendly or sustainable ingredients (90 percent vs. 61 percent), organic/natural ingredients (86 percent vs. 59 percent), or products that have social responsibility claims (80 percent vs. 48 percent).
Millennials, however, are also more likely than baby boomers (53 percent vs. 34 percent) to say they’d be willing to forgo a brand in order to buy products that are environmentally friendly. They also find it much easier to find environmentally friendly products in the stores where they shop (74 percent vs. 46 percent).
"The generational divide in sustainability is fueled by technology. We've found that sustainable shoppers in the U.S. are 67 percent more likely to be digitally engaged, which means they are used to having the products and knowledge they want right at their fingertips," said Sarah Schmansky, vice president, Fresh/H&W Growth & Strategy, Nielsen. "With their devices playing a significant role in their purchase decisions, a simple and frictionless shopping experience between on and offline is critical."
Age isn't the only factor to consider when looking for sustainable consumers. According to Nielsen and Natural Marketing Institute's (NMI) segmentation, 60 percent of Americans fall into the "Sustainable Mainstream" category. They want to be more sustainable, but they are also searching for some added benefits, such as improving health or cost and environmental savings.
2018 was the year of the influential sustainable consumer and it’s soon to be the decade of the sustainable shopper, said Nielsen. In a limited store growth environment, U.S. consumers continue to choose sustainable products over conventional options, making sustainability a consistent growth opportunity for manufacturers.