This, Not That: More Consumers Are Switching Brands Based on Sustainability

18 03 2023

Image credit: Gustavo Fring/Pexels

By MARY RIDDLE FROM TRIPLEPUNDIT.COM • Reposted: March 18, 2023

We know shoppers are increasingly interested in more sustainable products, and new research indicates many are ready to leave their standby brands behind. Half of all U.S. consumers, including 70 percent of millennials, have changed food and grocery brands based on environmental, social and governance (ESG) considerations, according to new polling. 

For its latest sustainability benchmark report, the research technology company Glow surveyed 33,000 U.S. adults to get their take on the ESG performance of more than 150 food and grocery brands. Across the board, consumers report changing their spending habits to better align with their personal values — and forward-looking brands are reaping the benefits. Almost 90 percent of respondents believe it’s important for businesses to be environmentally and socially responsible, and two-thirds said they’re willing to pay more for products that support vulnerable groups and communities.

“It is vitally important for companies to contribute to supporting society and the planet. And there is a growing body of evidence that doing so is more than the right thing to do, it is good for business,” said Julia Collins, CEO of Planet FWD, a carbon management platform for consumer brands, in a statement. “This report provides further evidence … that those who are leading in consumers’ minds are already reaping the commercial benefits and are best placed for future success.” Indeed, 8 in 10 respondents said they feel more loyalty to purpose-driven brands.

ESG performance is correlated with revenue growth

Glow also found a positive correlation between ESG performance and revenue growth. Even in a troubled economy with a cost-of-living crisis, environmentally- and socially-responsible companies are seeing the economic benefits of standing for their values: 20 percent of consumers rank sustainability in their top three considerations when shopping at the grocery store, and 10 percent of millennials said sustainability is the single most important factor when making a purchase.

Additionally, while 70 percent of consumers are actively switching food and grocery brands to save money, many consider sustainability a key reason not to do so, particularly among younger shoppers. 

“Now more than ever, if brands want to retain and win consumers, they must stand for something,” Mike Johnston, managing director of data products at Glow, said in a statement. “All consumers are looking for ways to save money. They will need a compelling reason why they shouldn’t walk away from your brand for a cheaper alternative. Along with quality, sustainability is a key barrier to change, especially for millennials.” 

It’s worth noting that what consumers view as “sustainable” will vary based on the product. Consumers report that plastic and waste issues are of greater importance in the household goods department, for example, while health and wellbeing is a top concern for consumers when choosing beverages and beauty products. 

Still, across all categories, products with ESG-related claims on their packaging grew an average 1.7 percent faster than those without. Labels and messaging associated with regenerative agriculture, plastic-free products, cruelty-free operations, water footprint, and renewable energy caught consumers’ attention the most.

Consumer expectations are high

U.S. consumers widely perceived the food and grocery industry as a leader in corporate sustainability, Glow’s data revealed, but the industry still faces significant barriers to meeting consumer expectations in a few key areas. For example, almost a third of responding consumers are dissatisfied with the industry’s efforts to reduce emissions, mitigate climate change, protect wildlife and ensure the welfare of suppliers.

While being misaligned with consumer expectations is never ideal for a company or sector, this gap presents an opportunity for brands to re-engage with this growing segment of consumers and stakeholders. By aligning ESG priorities with consumer expectations, companies can take advantage of a growth opportunity, while reducing risk and improving impacts on the environment.

“There’s a role of education here that’s critical for businesses,” Tim Clover, founder and CEO of Glow, told TriplePundit. “Consumers really want to understand the issues in more detail, to understand some of the science and the lengths to which companies are going to solve these problems. Companies that are brave enough to go and take the time to explain the depth of these issues and educate the market, they’re leading. They’re winning.”

To see the original post, follow this link: https://www.triplepundit.com/story/2023/consumers-switching-brands-esg/768956

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Categories : ESG, responsible brands

What ESG Issues Do Consumers Really Care About?

9 03 2023

Image credits: georgerudy/Adobe Stock and Glow

By Terry E. Cohen from triplepundit.com • Reposted: March 9, 2023

Research has more than made the case for linking environmental, social and governance 
(ESG) strategies to corporate profitability. What’s good for people and the planet does, indeed, benefit a company’s bottom line. The trickier part is determining what programs will yield the best results for the investment.

Some ESG pathways are easier to attain and measure direct results, such as cost reductions. But top-line market growth demands a greater understanding of customer wishes and perceptions of a company’s ESG efforts. Those expectations and priorities will differ by industry sector, as well as by geographies, cultures, and demographics like age and gender.

While studies and reports can point companies in the right direction with top-level overviews of trends and industry insights, real-time survey and data collection can dig deeper into what consumers prize in ESG efforts.

Measuring consumer ESG priorities across industries, brands and more

Glow, a research-technology business with offices in North America, Europe and Asia-Pacific, first started tracking what consumers think about ESG issues in relation to purchasing decisions over two years ago. It began with a field of approximately 40 issues that, through multiple research studies across three markets (U.S., U.K. and Australia), were then synthesized into 13 ESG drivers of consumer priorities and perceptions.

The process yielded a diagnostic tool called the Social Responsibility Score (SRS) that not only provides a number to tell a company how it is perceived in its ESG efforts, but also where it stands in its industry and against its competitors and why consumers score it that way.

For example, among food and grocery (F&G) companies in particular, three environmental drivers — reducing emissions, respecting natural resources, and protecting wildlife and ecosystems — ranked highest for importance among consumers, as shown below.

ESG issues that are important to consumers for food and grocery brands - graphic
The ESG drivers that matter most to consumers for the food and grocery sector. The longer the ‘wedge,’ the more important that driver is for the industry. (Click here to enlarge)   

This isn’t to say social drivers like health and well-being aren’t important to F&G customers — they are. But understanding consumers’ top concerns at a given time can help companies prioritize, in terms of both programming and messaging successes. Communicating accomplishments in the areas that matter most to consumers can translate into customer loyalty as well as brand switching. 

On the other hand, if a brand and its competitors are all communicating about the same things, it can be harder to stand out. In cases like these, a brand may opt to lean into an area that isn’t as much of a focus for peers and competitors. Or, if it finds it’s under-performing compared to peers on key issues that matter to consumers, it may decide to invest more in those areas and communicate an improvement story. 

Listening to consumers via data capture enables this kind of decision-making, helping brands to get the most return on their ESG investments.

comparison of ESG risks and opportunities for two brands - graphic
ESG risks and opportunities for two anonymized F&G competitors from Australia. (Click to enlarge)

Take, for example, these two anonymized F&G competitors from Australia, shown above. Both brands mapped their SRS in relation to the industry benchmark (the green line). Brand A clearly outshines Brand B on virtually all of the 13 drivers. The achievement gap in the areas most important to consumers, such as “reducing emissions”  is substantial enough to be a significant opportunity for Brand A to message that success to customers hungry for guidance on where to invest their purchasing power. Meanwhile, Brand B can see where it’s progressing and where further investments can help it improve credibility. 

ESG drivers differ across industries 

What weighs heaviest on consumers’ minds will vary across industries. For example, Glow found that governance and social drivers are the biggest influences on ESG credentials in the health insurance industry in the U.S., as shown below. 

The ESG drivers that matter most to consumers for the health insurance sector - graphic 
The ESG drivers that matter most to consumers for the health insurance sector. The longer the ‘wedge,’ the more important that driver is for the industry. (Click here to enlarge)

In travel and tourism, on the other hand, U.S. customers view all three divisions of environmental, social and governance factors as important for the sector to address.

The ESG drivers that matter most to consumers for the travel and tourism sector - graphic
The ESG drivers that matter most to consumers for the travel and tourism sector. (Click here to enlarge)

In a balanced framework such as the latter, drilling further down into age, gender, geography, and competition among brands is vital to determine the focus for programs and messaging to avoid spreading investment and resources too thin.

Continuing to zero-in on what matters to who

Price and quality are typically the engines powering consumer choices, but business leaders may be surprised at how strong “sustainability” has become as a beacon to consumers looking for safe harbor for their purchasing dollars. 

This is especially true in the F&G sector — where 1 in 2 U.S. consumers have switched brandsbased on sustainability considerations, and 1 in 5  ranked ESG/sustainability as one of the top three drivers for deciding what brands to purchase, according to Glow data.

ESG issues that matter to consumers
(Click to enlarge) 

Diving deeper to look at age segmentation, millennials prized ESG/sustainability even higher, with 1 in 3 such consumers rating it as one of their top three considerations, behind price and quality. Further, 10 percent of millennials rated ESG/sustainability as the top influencer of their purchase decisions, even more than price and quality, Glow found.

These findings demonstrate the importance of ESG initiatives and messaging to any company’s bottom line. To fail in listening and responding to consumers in this regard is to surrender profits and reputation to competitors that are willing to leverage the feedback.

Data and surveys give a brand that feedback continuously since the measurements can be taken over set time periods, in connection with program launches or in tandem with media campaigns.

“The response from people taking these surveys is actually very clear. You can understand what it is that’s driving the consumer response and what’s driving the metric you receive,” said Tim Clover, CEO of Glow. “It allows you to line up the programs you’re running with the different areas and ask, ‘Are these the programs we should be communicating?’ If so, to whom do we communicate and through which media?”

Alignment of ESG programs with consumer expectations, coupled with alignment of messaging to bring about positive public perception of those programs, creates a winning combination for brands. 

The tools exist to know what ESG concerns consumers really care about. The decision to use those tools enables business leaders to enhance brand profitability while “doing the right thing.” 

This article series is sponsored by Glow and produced by the TriplePundit editorial team.

To see the original post, follow this link: https://www.triplepundit.com/story/2023/esg-consumers-care/768091


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Categories : social responsibility