# WhoCares Who Does 2021 - Latam - p
Creating a competitive advantage through sustainability
Issue 3 | October 2021
Latam
Creating a competitive advantage
through sustainability
Issue 3 | October 2021
Latam Headline Issues around sustainability
COVID-19 may have pushed the topic of sustainability off the top of the news agenda recently, but its importance in terms of the global population only continues to grow.
Creating a competitve
advantage through sustainability
Welcome to the 2021 edition of Who Cares, Who Does for Latin America. Every year the scale of the environmental issues we face challenges how we do business and how consumers perceive businesses and brands.
For the third year in a row we have linked attitudes to key sustainability issues to actual purchase behaviour in a globally consistent way.
This year’s Latam edition also includes two new elements:
Firstly, we have added Ecuador to our country profiles so that the report now covers seven countries in Latam, making it the most detailed and comprehensive look at attitudes to sustainability and purchase behaviour for the region.
Secondly, we have also looked at sustainability and environmental attitudes among consumers through the prism of the UN’s Sustainable Development Goals (SDGs) for the first time. These SDGs, which many companies have adopted as targets, cover a wide range of issues that go beyond the environment and highlight the fact that for many consumers education, ending poverty and zero hunger are as important, if not more so, than climate change.
Finding out which of the 17 SDGs consumers in Latam support also demonstrates why we need a bespoke look at our region. Latin America is very different in terms of consumer priorities to Europe and many other parts of the world. With the exception of Chile, which sometimes scores more similarly to Germany on some issues, most countries in Latam have a very different set of attitudes.
The exceptionalism of Chile also highlights another reason why we need to look at Latam in detail. Across the continent consumers are at very different stages in their Eco journey. Some are far ahead, while others are taking their own unique journey when it comes to behaviour, expectations and who they want to take responsibility for the environmental challenge.
What’s true across all the seven markets we surveyed however, is that there is a huge opportunity for brands and retailers. In nearly every category, the people that we define as Eco Actives index much more strongly than average.
Who Cares, Who Does is based on the region’s
biggest study of attitudes to environmental and sustainability issues and the most detailed look
at evolving and increasingly environmentally
concerned consumers across Latam.
Countries: Belgium, Brazil, Chinese Mainland, Colombia, Costa Rica, Chile, Czech Republic, Ecuador, France, Germany, Great Britain, Hungary, India, Ireland, Italy, Mexico, Netherlands, Peru, Poland, Portugal, Russia, Saudi Arabia, Slovakia, Spain, Thailand, USA.
Sample >88,000 respondents
Latam 18,300 respondants
Fieldwork took place between
June - July 2021
How Latam’s population has shifted
At the centre of the
Who Cares, Who Does? study is our
Eco Segmentation, where we have
divided the global population into
three unique consumer groups.
Let’s see how the groups have
changed over the last three years.
Eco engagment continues to grow
Despite the pandemic and the economic challenges, engagement with the environment and sustainability issues are still growing. Our bespoke segmentation identifies three consumer groups, Eco Actives, Eco Considerers and Eco Dismissers.
The latter were the biggest group in 2019 but are now in a minority both globally and in Latam. 2020 and 2021 saw growth in both Eco Actives and Eco Considerers globally but in 2021 Latam saw a slight fall following the strong gains of 2020.
Shoppers who are highly concerned about the environment and are making the most of actions to reduce their waste. They feel an intrinsic responsibility to be more sustainable, follow the topic more actively, and are more aware of their potential impact on the planet.
They are worried about the environment and plastic waste, at similar levels to Eco Actives. But they are closer to Eco Dismissers in how they act, not taking many actions to reduce their waste. Their most significant barriers are convenience and price.
Shoppers who have little or no interest in the environment and take no steps to reduce waste. The topic rarely features amongst friends and family, and they lack awareness of environmental concerns. They do not think they make a difference.
Once again, however, the picture is not uniform across Latam. Eco Actives are at their highest in Chile at 31% in 2021, compared to 8% in Brazil, with Peru and Ecuador also among the sceptics. Mexico, Costa Rica and Colombia are other markets recording mid to late teen numbers.
What we have seen in Mexico, Costa Rica and Peru is a step change in the number of Eco Considerers in 2020 (and a sharp decline in the number of Eco Dismissers), with the bulk of that gain retained in 2021.
Eco Actives
projected growth
Our prediction is that Eco Actives will only continue to grow. Globally we think that they will represent more than half the population by 2029 and hit 56% in the next decade. That growth will be mirrored at a lower level across Latam, where Eco Actives are expected to account for 43% of the population by 2031.
As the population, attitudes and priorities shift, those brands that currently under-perform with Eco Actives face a big loss of share and value. Winning favour with sustainable shoppers takes time, brands need to act now, if they are to thrive in the years to come.
Latam Eco Actives are
more democratic than ever
Commitment to change is extending to all groups. Eco Activism is becoming democratized across the socio-economic spectrum. The profile of Latam Eco Actives has been shifting since we started assessing the area in 2019 with the age profile becoming steadily younger with each year.
A quarter of Eco Actives are now aged 34 years or less, while nearly a third are in households of one to two people.
Money matters
It’s easy to buy more expensive products produced in sympathy with the planet when your budget is not tight.Many consumers in Latam, however, struggle to get by and for them, no matter how much they care, it can be more challenging to take concrete actions.
This is a region with 13% unemployment in 2021, four times the global average, while average inflation is 7%, also significantly higher than in many markets.
Impact of COVID-19
on sustainability views
Despite these challenges – and the impact of the Covid pandemic – many do still care. The number of Latam respondents declaring that the sustainability is “more or much more” important is 62%, well above the global figure of 49%.
This is a huge difference considering the fact that only 3% of Latam shoppers declare a lack of financial restrictions in their current situation and the fact that 26% think their income is insufficient to cover their current expenses.
Sustainability + Society: equally important concerns to the Latam Population
Top environmental and social topics
among consumers through the prism
of the UN’s Sustainable Development Goals
Sustainable
Development Goals
The UN’s Sustainable Development Goals 17 areas where life could be improved for many of the world’s citizens. Only some are related to sustainability and many are more focused on age-old concerns about poverty, hunger, work and education.
All of them are important. Quality education is the top SDG among our sample ranked as one of the top five by 56% of our respondents. Clean water and sanitation is the second most important concern at 54%, but poverty, work, hunger, health all score higher than the next SDG that deals with sustainability issues.
There was near unanimity on the importance of both top issues across the region, but Ecuador and Peru ranked education even higher at 63%.
What’s concerning today’s consumer?
Gaining insights into wider concerns helps businesses to understand consumer priorities, and then create effective sustainability solutions.
Let´s see what´s concerning the Latin Americans.
The biggest areas of concern
As we’ve seen from the Latam priorities for the UN’s SDG, what matters in our region can be very different from what matters globally. Asked to name their top three concerns, the global panel listed Climate Change (42%), Water Pollution (36%) and Plastic Waste (34%).
The figures for Latam are dominated by concerns about water quality and water management. Water shortages topped the poll in 2021, with water waste and water pollution also making the top five.
But as we see time and time again across our region, there are huge variations. Climate change for example scored 8% in Brasil but 16% in Mexico and Chile. Water shortages were a huge issue in Mexico (27%) and Chile (25%) but deemed less important in Brasil (9%) and Costa Rica (11%).
One issue gaining awareness is plastic waste with 2021 numbers for Costa Rica (10%), Colombia (9%) and Chile (9%) demonstrating that it’s an issue for significant numbers of consumers.
The challenge
of changing behaviour
Whatever the issue and whatever the ambitions that consumers have, few can take action without knowledge. This is best highlighted in the area of recycling. Many consumers are positive about buying sustainable packaging, with Colombia, Chile and Brasil all over-indexing on the regional score of 36%.
But detailed questioning reveals that many have little knowledge about what can be recycled at home and find current labelling hard to understand. New forms of packaging that are biodegradable are adding to the confusion and many are often trying to recycle packaging when they are unsure if it should be recycled or not.
One area where consumers are united in all countries is that they know cardboard packaging is the least bad for the environment (selected by just 5% of regional respondents when they are asked to name the three types of packaging that are worst for the environment).
The value-action gap
The criticism of those who talk a good game about sustainability is that they often don’t act in the same way. The truth is that many want to shop sustainably but often can’t. It could be for financial reasons or because the categories they buy have yet to incorporate sustainable messages or labelling that enables them to make a quick and easy choice.
There is a value-action gap. So, for example, 63% of people try to buy environmentally friendly packaging but only 25% manage do so. That leaves an unmet need for 38% of the Latam population.
When we look at the value-action gap for Latin America we find that more of our Latam sample are true to their goals than their global colleagues. The difference between “try to buy” and “I regularly buy” is just 2% among Eco Actives, compared to 12% for the global population.
How brands can
win with Eco Actives
Eco Actives are worth $12billion to the Latam FMCG industry – and they´re set to represent 43% of the regions population share
in 10 years. Let´s explore their shopping behaviour.
Brands can create a sustainability positioning at every stage of the usage journey, from purchase to end of life. Messages that demonstrate credible action in any area can attract Eco Actives to your brand.
It’s vital that brands take action because in almost every segment we look at Eco Actives over-index when it comes to purchasing. From Haircolouring products in Colombia (9%) to laundry bleach in Chile (19%), from Pet Products in Costa Rica (36%) to milk in Mexico (20%) and from Mouthwash in Colombia (13%) to olive oil in Peru and Costa Rica (both 35%), these are the people who will drive market share and revenue.
Brand penetration among Eco Actives in Ecuador is indexing at 153%, higher than the national average among all shoppers. The market opportunity is already large and will only grow as Eco Actives become an even bigger proportion of the population over time.
Where will
consumers take action?
The words that consumers say do not always match their actions but many are planning to make behaviour changes around key sustainability concerns.
In Colombia, 54% are planning to limit their water consumption in the year ahead, compared to just 21% across the region. In the same country 18% will wash their clothes at a lower temperature more often, compared to just 8% across the region.
Other specific actions that are likely to translate into real action and a commitment to take advantage of re-usable products, with consumers in Chile and Brasil both beating the regional average.
Similarly, there was a strong commitment to reducing home electricity consumption in Colombia (59%) and Brasil (50%), both well above the regional average of just 22%. In Ecuador, pledges were made to limit car use, with 35% planning to drive less in the year ahead compared to a regional average of just 7%.
Chile stands out as the country where demands for real action are strong, outperforming the regional average in a host of areas, ranging from packaging that can be recycled or is made out of recycled material to demanding organic food and better animal welfare. It is also the strongest scorer when it comes to better labelling on recycling and zero carbon labels.
Who is to blame?
Consumers say there is no one group that bears ultimate responsibility for delivering a more sustainable present and future. Everyone has a role to play, from retailers to consumers and manufacturers to governments.
The degree to which our respondents think each group should take action varies from 2020 to 2021 – consumers and governments need to take more action – and by country across our region.
Retailers are held responsible most in Brasil (6%), consumers are the key group in Mexico and Costa Rica (both 42%), while government action is most essential in Brasil (46%) and manufacturers should make most changes in Colombia and Ecuador (37%).
Retailers can do more
While retailers are not being blamed for the challenges faced by consumers who want to take action, there is still scope for them to do more. Indeed, many consumers are demanding that they make it easier for them to more. Regional variations on this score are massive, with the percentage of people satisfied with current retailer activity ranging from 27% in Brasil to 60% in Mexico.
There are also other tests that consumers now place on retailers when they select their retailer of choice.
Awards for retailers
Consumers now have much stronger opinions about which retailers are helping them act more sustainably. In 2020 just 16% of Latam respondents could answer the question “Is there a retailer that does a lot for the environment or society?” This year the number with an opinion rose to 42%, demonstrating the growth in Eco Actives and environmental awareness as a whole.
The winner in 2021 was Jumbo, with Aki and Lider in second and third place respectively.
The Manufacturer role
Companies that meet the needs of Eco Actives and Eco Considerers will win in the new, sustainability-aware retail marketplace. Already these considerations are having an impact on the choices that consumers make. Sixty-four percent of all shopper groups have stopped purchasing a product/service with a negative impact on the environment at least once and the figure is 73% in Chile.
On a more positive note, 68% of all consumers have switched to comparable products/services that have a positive impact. Once again, the figure is even higher in Chile at 79%.
What matters to consumers
We asked consumers to name what makes them think a brand is doing good for the environment. What are the actions that matter when they make their brand choices?
The other area we focused on was what makes them think a brand is doing good for society – reflecting Latam’s focus on the broader UN SDGs.
How to create
a competitive sustainability advantage
As shown throughout this paper,
the importance of sustainability
has grown – so how can businesses
tap into this opportunity?
How to win
on sustainability
1. COVID, Society
and Sustainability
Recognize that despite the pandemic and financial pressures, consumer concerns about sustainability are real and you need to address it. The value-gap among Eco Actives may be low but there are still some Eco Considerers and Eco Dismissers who are some trying to step up and could be converted.
2.Demystify
the Eco Actives
Consumers who are highly engaged with sustainability will account for 43% of the Latam population in 10 years. Increasingly they have the same habits as any general shopper. You need to map your brand to see if it is well positioned with this group.
3. Speak the
right language
Talk to shoppers in a language that they can understand – make it easy for them to do the right thing. For the vast majority, terms such as Carbon Zero, Climate Change and Recycling are still a little mysterious.
Food for thought
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Who Cares, Who Does?
Global - 2021
Who Cares, Who Does?
Global - 2020
Who Cares, Who Does?
Latam - 2020
