# WhoCares, Who Does 2020 - pro
Attitudes and actions towards living
sustainably and reducing waste
Who Does? 2020
Attitudes and actions towards
living sustainably and reducing waste
Issue 2 | September 2020
The increased opportunity
in environmental concern
2020 has been dominated by COVID-19 and the impact of lockdowns on the economies around the world. Despite this, sustainability remains a critical topic for the Fast Moving Consumer Goods (FMCG) industry, particularly those companies thinking about the long term.
The increased opportunity in environmental concern
Globally, the most environmentally conscious consumers are worth $382 billion to the FMCG sector and are becoming more valuable by the tune of $78 billion in the last year, meaning sustainable innovation and direct-to-consumer (DTC) communication about your ‘green credentials’ are beneficial for both business and the planet.
Last year we launched the first edition of Who Cares, Who Does?, our global study to understand the attitudes and actions of consumers towards the environment. This year’s report provides updated insights in this area as manufacturers and retailers look for ways to meet their customer commitments and bring more consumers with them.
Over the following pages we will focus on three main topics:
1. What issues people are concerned about, what drives the conversation, and what impact we expect COVID-19 to have on this topic.
2. We will re-introduce our eco-segmentation and focus on the most environmentally-engaged group – the Eco Actives – to see how people in this group have changed and discover more about how they behave.
3. We finish by looking at who should lead the change, according to consumers, and their receptivity to different solutions across categories, along with suggestions on what to consider with real-life case studies.
Thanks to our partnership with GfK and Europanel, we have interviewed over 80,000 people across 19 countries. We are pleased to have included the USA in the main report this year and welcome Vietnam, Ireland and Portugal.
What continues to make this study unique is Kantar’s ability to cross-reference responses with actual behavioural data, both shopping and usage, enabling us to not only know what people say about sustainability, but also to directly link that back to your brand and category.
By understanding the ‘say-do’ between those who say they care, and those that do something about it, we can unlock the opportunities of environmental concern –and help brands win, whilst playing an important role in shaping our future planet.
#WCWD is a global survey in partnership with GfK and Europanel on our household purchase panels
Countries: US, France, Germany, Great Britain, Italy, Spain, Portugal, Ireland, Czech Republic, Poland, Slovakia, China, Indonesia, Vietnam, Brazil, Costa Rica, Chile, Colombia, Mexico.
Sample: >80,000 respondents
Fieldwork took place between
May – June 2020
concerning us environmentally?
As a starting point of our study, we
asked people to name their top
concern from a list of
Globally, climate change remains the number one concern with 16.9% of respondents citing this, an increase of 0.5% compared to 2019.
The second biggest concern is still plastic waste, and this too saw an increase from 14.0% to 14.8%. It remains top of mind for many because plastic is an issue that is highly visible; people are aware of their contribution and the physical evidence of waste and damage caused by it.
Concerns about issues related to water were lower this year, but we saw an increase in concern about both air pollution and deforestation. The survey was done in May-June when there was a lot of media attention around our ‘blue skies’ as a result of lockdown. The levels of air pollution in our cities, the devastating bush fires in Australia, and deforestation in the Amazon were all brought more sharply into focus.
However, this global picture does not show the regional differences of which there are many. For example, in Latin America, both water pollution and water shortage were the first and second concerns respectively. Whereas in Asia, the top concerns were plastic waste and food safety, with a significant 42.9% of people selecting one or the other.
For this year’s study we asked a new question, ‘Who are the people most likely to impact your behaviour regarding the environment?’. Whilst we see evidence of the media and world events driving the focus of attention, the real influences on our behaviour lie in conversations closer to home.
Thirty-eight per cent of people feel that those whose opinions are important to them are encouraging them to be greener. The main influencers on people’s behaviour are their children followed by friends and partners. For the under-35s, partners are the main influencer followed by friends and parents, showing that generational influence can go in both directions.
The impact of COVID-19
on our environmental efforts
We have seen some immediate impact on our efforts to be environmentally friendly due to COVID-19. The change in shopping experience has meant consumers are less likely to check what is on product labels for calories, sugar and environmental factors, such as palm oil and fair trade.
Western Europeans look at the most elements when selecting food, checking 3.8 elements, down from 4.2 last year. However, there were two areas where people were more engaged; labels showing quality assurances and recyclable packaging, with an increase of +3% and +4% respectively.
This reduction in product needs is likely to be short term and the need to protect our environment is so critical it cannot be ignored. This has been shown in a few ways.
People are now personally affected by environmental problems, with 46% of global respondents agreeing with this statement, rising to two out of three in Asia.
When pollution or water shortages are directly damaging your health or affecting your community, then solving them will become increasingly important.
The pace of change amongst some of the FMCG giants has continued, with big announcements from Unilever around developing carbon labelling, and other brands such as L’Oreal and Evian announcing plans to be carbon neutral.
Last year we introduced our Eco-
Segmentation where we created
unique consumer segments based
on how often people do everyday
actions that can help reduce plastic
Re-introducing our Eco-Segmentation
Everyday actions include taking their own bag when going grocery shopping, using refillable water bottles and reusable cups for hot drinks, to the more inconvenient (and less widely done) actions, such as avoiding buying drinks in plastic bottles or products that are packaged in plastic.
We choose these actions primarily because we feel they are good practice in most regions as plastic waste is a top concern and something that individuals can influence in their daily lives.
Eco Actives is the most engaged group – making up 20% of global consumers (+4% vs 2019) – consistently working to reduce their levels of plastic waste. They always, or frequently, take active steps to improve the environment.
This segment peaks at 24% in Western Europe – and within that Germany has the highest proportion at 38% – but this falls as low as 10% in Asia. Individuals in this group tend to be older and from higher social classes. Age is typically the stronger factor to separate the groups, but we do see in USA, Brazil and Indonesia the Actives are more likely to be under 35.
Despite this, China also saw a growth in Eco Actives, which fits with a wave of activity around charging for plastic bags in stores, setting up strict recycling schemes, and a government focus on green technologies.
This group includes serious spenders and is worth over $382 billion to the global FMCG market. If Eco Actives were to spend even a fraction of this amount on more environmentally friendly offers, there is a huge opportunity for FMCG companies.
Eco Considerers are those people who take some actions to reduce their environmental impact, such as using reusable cloth shopping bags instead of plastic bags, but less frequently than Eco Actives.
Thirty-nine per cent of global households belong to this segment (+4% vs 2019), with Asia seeing the biggest growth in this group (+5%). This was led by Indonesia where the group grew from 11% in 2019 to 22% in 2020.
Eco Dismissers have little or no interest in the environmental challenges facing the world and are taking no steps to improve, including efforts to reduce plastic waste. Although at 43% this is the biggest group, this has fallen by 8% in just one year.
Dismissers over-index with the under-35s, lower social classes and large households. Fifty-nine per cent of Asian households are in this group, but they are also sizeable in Latin America (47%) and the US (47%).
Although Dismissers form the largest group, the growth of both Actives and Considerers should be a cause for celebration and many opportunities lie with those who are most engaged.
Understanding Eco Actives
As they represent the most engaged group, we have focused on Eco Actives. We still believe that the current behaviour of this group forms the blueprint of how less engaged segments could behave.
Eco Actives are cooking their meals with fresh ingredients. Analysing 330 FMCG categories in the UK, we found that of the top 10 categories where Eco Actives over trade, half were fresh food or categories related to scratch cooking, such as fresh vegetables, fresh milk, home baking, ethnic ingredients, and stock cubes.
They are buying organic, with a 20% increase in spend on fresh organic fruit and vegetables in 2020, more than double the average growth rate. The over representation in organic is also evident across Europe.
They also seek out ‘natural’ products, with over three-quarters (78%) of this group globally agreeing with this statement, compared to 65% across all of the groups.
Eco Actives are more health conscious than other groups, buying into categories with health benefits. They are more likely to check the nutritional labels on their food and drink products, choosing those with additional benefits, such as vitamins.
Genki Forest is a new brand from China, which has zero calories and fat and is an example of how Eco Actives can help brands grow. They account for 45% of the brand’s sales, which is twice as high as the proportion of sales they account for in the carbonated soft drinks category overall.
In some cases, environmental concerns may trade off against the desire for health, for example with mineral water in the UK where there is a safe, plastic free alternative in tap water. In this case we find the Eco Actives less likely to choose this category.
When we look at the purchasing of Eco Actives in the UK, we can see that the brands they are most likely to buy, compared to Eco Dismissers, have strong sustainability credentials.
For the three brands below, penetration is almost double that of Dismissers and the sales growth among Actives up to five times higher.
What differentiates these brands is that they go beyond plastic and tick multiple sustainability boxes, including locally produced, organic, meat-free and using sustainable palm oil. They have an all-round green image and a higher price point.
Eco Active shopping behaviours did not diminish due to COVID-19.
Despite seeing an increase in plastic packaging for fresh food, due to hygiene concerns and convenience, the Eco Actives remained committed to buying their fresh fruit and vegetables unwrapped.
As the data shows, the proportion of spend by Actives on loose (unpackaged) meat (for example from a butcher’s counter) has remained flat and has even increased on fresh fruit, vegetables and salads during the last year, whilst it has decreased significantly for the rest of the population.
Who’s responsible for change?
We asked respondents again this
year who they felt was the most
important stakeholder in limiting
Manufacturers need to lead
Once again manufacturers came out top with 37.3%. While only 22% of people can name a brand that is doing a good job, this is up from last year when we asked more specifically about plastic waste. This broader definition of environmental damage may have played a role as labels such as Fairtrade were mentioned a lot.
At the opposite end of the spectrum, retailers were considered the least important with only 4.2% of respondents naming them as the most important stakeholder, a fall of 2.9%. From an FMCG perspective, it is clear that consumers expect a lot from manufacturers.
We asked specifically which solutions would be most helpful for individuals to reduce waste across a range of FMCG categories, including fresh, homecare, personal care, confectionery, beverages and dry goods. This shows that even when given a wider range of choices, consumers focused on packaging, with half opting for 100% recyclable followed by biodegradable and non-plastic options.
Plastic still has an important role to play for most people, but what is important is that it is not going into landfill or the oceans.
However, 100% recyclable packaging as a global strategy has real challenges. In Western Europe, the majority felt this would be effective, with the number peaking in Ireland (72%). In Asia, however, the opposite is true with a significantly lower response rate, in fact as low as 28% in Vietnam.
There appears to be a link between those wanting 100% recyclable and the quality of local recycling facilities. Ireland had one of the lowest percentages (29%) of people saying it was inconvenient and unclear where to hand items in for recycling. Vietnam, on the other hand, had nearly double this number (52%) saying there was confusion around where to get their waste recycled. This led to Vietnamese respondents selecting a different biodegradable option as the preferred solution that would work for them.
The implication is that manufacturers need to be more involved in creating and supporting better collection and recycling infrastructures. Several partnerships are springing up across Asia with non-governmental organisations (NGOs) partnering with manufacturers to collect and recycle plastic, and also with local plastics organisations, such as Abiplast in Brazil working with Unilever to generate a greater supply of recycled plastic in order to make products.
There are two further examples from Mexico, including local brand Herdez, which has set up stations in 52 locations to exchange used cans of sweetcorn for digital tokens and turning them into wind turbines. This is aiming to raise awareness and incentivise recycling in a country where a lack of facilities means 33% of Mexicans consider recycling inconvenient. The sales impact for the Herdez brand was also positive as it continues to gain volume share.
Another example is Coca-Cola, the most chosen FMCG brand in the world, with the brand spending $152 million in Mexico on infrastructure for bottle recycling. This was recognised by our respondents, and Coca-Cola was the most mentioned brand ‘doing a good job’ in limiting environmental damage in Mexico.
Thinking beyond recyclable plastic
Biodegradable was the second most chosen option for solutions that would work for shoppers. However, a lack of facilities can mean that the packaging is not able to degrade or can contaminate the recycling streams. This has led to the UK’s leading retailer Tesco advising manufacturers not to use it to comply with its green policies.
Technology is moving fast however and the variety of products (both FMCG and non-FMCG) that can be made with biodegradable solutions is increasing rapidly. Despite the negative associations, there are examples of manufacturers exploring biodegradable options.
Major food manufacturer Bimbo is introducing 100% biodegradable or compostable packaging. Bimbo was the number two most mentioned brand that is doing a good job in Mexico and is also growing its consumer base strongly this year.
The third most chosen option that worked for people was packaging in materials other than plastic, something we expect to see a sharp rise in for future product launches. Pulpex is a packaging producer that is partnering with Diageo, Unilever, and PepsiCo to produce new packaging derived from wood pulp and 100% recyclable. One of the first products to hit the market next year will be Johnny Walker whiskey available in a paper bottle.
Paper has also been replacing plastic in other cases. Subscription laundry and dish care company SMOL produces plastic-free packaging that also has a safety feature to stop young children eating the tablets. L’Oréal has launched a new sunscreen in France, using cardboard to replace nearly half the plastic in the packaging for its brand La Roche-Posay.
One area where we have seen a lot of corporate announcements is in going carbon neutral. Carbon neutral means that for any carbon you put into the atmosphere you need take out again (for example by planting trees). Microsoft announced this year that it will be carbon negative and pay back all of the carbon used in its history by 2050. This appears to have a lower cut through with our respondents, with only 19% opting for more carbon neutral products, falling as low as 11% in LatAm. Germany is one of the more progressive countries in its engagement around sustainability with 42% saying it would be helpful and suggesting we could see this area grow in the future.
We found significant differences in what people wanted by category. Fresh food was highlighted as the category where half of all consumers felt they could make a difference in their purchasing. There was a lot more demand for more local products to be available, with 38% overall wanting this, peaking at 67% in Germany and 65% in Italy.
Homecare was the second most selected category where people believed they could make a difference. Whilst 100% recyclable packaging was the first ask, there was a much higher number of people saying refillable options would also help (vs other categories).
A few brands are adopting this. A great example is Algramo in Chile, which provides refills for a range of products and offers cost savings for doing so. Neat is a new brand in the UK, which is super premium and emphasises sleek packaging alongside the fact that it is non-plastic.
In the last year, we have seen an increase in product launches providing options to help shoppers avoid plastic. However, this does not necessarily lead to success. In many cases, we found products that were highlighted as being major sustainability-first launches had limited impact.
Fab in Colombia marketed as “cleaning that takes care of the planet” only reached 0.2% penetration. Its limited success was down to being available only in some modern trade retailers, having a premium price point, and no mass advertising. In the UK, Colgate launched a bamboo toothbrush and toothpaste in recyclable packaging, but the combined sales were around £1m with price points over four times the market average.
Whilst all initiatives in this space add choice and help test capabilities, it shows that the traditional levers of success, such as mental and physical availability while remaining competitively priced, remain as true in this space as the rest of the FMCG market.
The time for action is still now
Sustainability has not disappeared
from people’s minds despite the
shockwaves caused by COVID-19
and the economic downturn.
In fact, as our data has shown, it has become more important with an increase in Eco Actives (+4%) and a decrease in Eco Dismissers (-8%).
The FMCG industry needs to continue to look for ways to make local communities cleaner and healthier by reducing waste and energy output and support the creation of recycling facilities for plastic. Communicating actions directly to the consumer needs to be done clearly and consistently. However, shoppers are not willing to pay more for ‘green’ as they see it as the responsibility of an industry that should be leading this initiative.
These are the key considerations for FMCG manufacturers and retailers when thinking about how to meet consumer demands.
1. Plastic waste is still the second biggest concern globally and growing (+0.8%)
2. 100% recyclable packaging is the option that works best for the most people, but recognise this is less acceptable across Asia and LatAm where lack of facilities means it will end up in landfill
3. Consider biodegradable and options other than plastic, but beware of some negative associations, particularly of biodegradable.
1. Eco Actives are worth $382 billion to FMCG brands and should be the starting point of your targeting
2. People expect leadership from manufacturers, but are not seeing it with only one in five able to name a manufacturer doing it well
3. Green launches are subject to marketing principles and need to be advertised to consumers, stocked widely, and priced competitively to deliver high sales
4. Brands that do sell well and command a premium communicate their eco credentials across more than just packaging
5. Communicate to younger generations. Older consumers are most active in reducing waste, but are also influenced to change by younger people.
Food for thought
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Consumer response to plastic waste