Sustainability standoff?
A society at tipping point
To understand the Latin American consumer is to grasp the nuances of a society standing on the precipice of change. In Colombia alone, a staggering 75% of the population believes their consumer choices have a profound impact on the environment.
This is not a statistic to be glossed over; it's a significant revelation, especially when considered against the backdrop of high unemployment rates, economic uncertainty, and widespread social unrest in the country. In other words, even in the toughest of circumstances, people are demonstrating understandings of their impact on the world and a willingness to make changes.
Unsurprisingly, the Latin American population doesn't fit neatly into a monolithic category. Consequently, we’ve done our best to look at them through three lenses helpful to discussions around consumption, the Earth, and sustainability.
They look like this
Make no mistake, as you’ll see, these aren’t mere labels. They are valuable market segments with divergent spending patterns and contrasting attitudes towards sustainability.
The combined spending of Eco-Actives and Eco-Considerers in the FMCG sector amounts to a staggering $46.2 billion. They also shop less often but spend more, indicative of a certain level of financial security and rationality. Conversely, Eco-Dismissers, despite their frequent shopping habits, contribute less to overall spending on a per-capita basis.
This is important because once upon a time, one might have been tempted to assume that economic constraints would dilute eco-friendly habits, turning Eco-Actives into mere sidelines in the marketplace. But the data heralds a different tale. While the Eco-Considerers have held their ground, remaining steady at 38% across the region, it's the Eco-Dismissers whose numbers are dwindling—from 44% in 2022 to 40% in 2023 across the region. Important context.
This isn't just a shift; it's a breakthrough. It starkly challenges the assumption that economic factors have derailed eco-conscious consumer practices. More than that, it underscores the resurgence of the Eco-Actives, whose population share is a compelling 22%, up from 18% the previous year. At country level, things can look even better. In Argentina, the numbers top out at 30% of the population.
As these trends progress, it’s important to recognise that when we talk about Eco-Actives and Eco-Considerers, we're not merely discussing a demographic niche; we're now talking about a financial powerhouse.
Let's break down the numbers in a way that speaks volumes:It's tempting to think the 40% population share of Eco-Dismissers would naturally translate into 40% of FMCG spending. But let's disabuse ourselves of that notion. Far from being a one-to-one correlation, the Eco-Dismissers are lower contributors of spend. (see table) It's an understanding that defies face-value assumptions, reminding us that the devil is in the details.
Factors such as cash flow, educational levels, and spending power come into play, adding layers of complexity to the narrative.
But let's not lose sight of the potential paradox that lurks beneath these numbers. The individuals who can most afford to make sustainable choices are often those who feel the least economic pressure. Here, then, lies a conundrum that businesses and policymakers must urgently address — a growing divide between those who can afford to be eco-conscious and those who cannot.
