The price of progress
Living costs meet environmental passions
The cost-of-living crisis has had a significant impact on eco-conscious consumers, affecting their ability to make sustainable choices and putting pressure on brands. For some, that has meant forsaking the more sustainable for the more economical. This trade-off is no minor matter. Products under the green banner tend to sit within premium price tiers, rendering them less accessible to the masses.
Pressure on people
Eco-Actives are hardly insulated from these economic pressures. Whilst they desire eco-friendly products they are often lacking the financial flexibility to afford them.
And this is not a plight confined to one locale. From Argentina, where 36% fall into this category, to Brazil (32%), Colombia (49%), Peru (30%), and the United Kingdom (23%), a significant portion of Eco-Actives say they are “struggling” to make ends meet. Those who say they are “comfortable” have more spending power.
Pressure on brands
Brands are facing increasing tensions as they navigate the cost-of-living crisis and sustainability expectations. On one hand, they are expected to demonstrate more action on their Environmental, Social, and Governance (ESG) efforts to institutional investors. On the other hand, they are pressured by consumers who want more sustainable and environmentally friendly products but are unwilling or able to pay more. Trust in brands is declining, giving consumers another reason to buy private label products as price pressures continue. Only 42% of people globally trust brands not to unnecessarily raise their prices. Alongside this, the value-action gap remains, with the perceived expense of green options being the number one barrier to making more sustainable choices. This is true across regions with 60.9% saying this was a barrier to buying sustainably. The biggest difference across regions was that the products were hard to find with more than 50% saying this in Latin America and Asia, and only 32% in Europe.
Pressure on retailers
Retailers are also facing pressure from consumers. Respondents told us they wanted retailers to take more action to remove excess packaging from their own products. 55.1% of people said they wanted retailers to make this a priority. Given the growth trajectory of private label product sales across Europe — more than half of shoppers are now buying private label, according to Europanel’s Barometer — a retailer response on this front could have a meaningful impact on waste reduction. Another demand of retailers was to reduce waste in their supply chain (46.9%).
To make managing the market conditions even more complex, there is still a strong desire for sustainable products and practices, despite financial constraints. Brands and retailers have an opportunity to support consumers in making sustainable choices by offering affordable eco-friendly options, providing promotions on sustainable products, and reducing excess packaging.
55.1% of respondents want retailers to take more action to remove excess packaging from their own products.
The level of requests and accountability has gone up considerably.
It's part of discussions but not more so than before
It has taken a back seat to pricing pressures compared to before.
Sustainability does not feature in my conversations with retailers.
