The physical risk of climate change has appeared and cannot be ignored. Portsmouth, Hampshire, Human-environment interactions in the Himalayan Sutlej-Beas system 1,*, Wuyang Hu. Colloquially, use of the word “green” is applied broadly to almost everything related to benefiting the environment, from production and transportation to architecture and even fashion. Are Consumers Willing to Pay More for Sustainable Products? The survey further found that for brand loyalty, Gen-Z’s were more likely to prioritize sustainability, brand … Whatever the reason, the manufacturing of green consumer products is beneficial for the planet. Corporate leaders should listen to the vote of the people rather than their brand managers who claim that there is no market for sustainability. They no longer are willing to accept that sustainable production, marketing and disposal is too expensive and therefore not viable. More than 36 categories were taken into account, and over 71,000 SKUs which accounted for the CPG dollar sales in the five year period. Shoppers once selected grocery products based simply on price or brand, but now attributes such as “climate-friendly” or “eco-friendly” are part of the consideration. by Guzhen Zhou. For instance, Unilever has seen the growth of their 16 sustainable brands 50% faster than their other brands. Will consumers pay more for green? The change in consumer trends have seen huge FMCG companies such as Coca Cola, Nestle, P&G scrambling to repackage their products, removing plastic as far as possible. It’s a crucial question whose answer could affect the sustainability of industry value chains: after all, many companies will pay a premium for green products and services only if they can charge customers more down the line, according to a recent McKinsey survey of 500 executives. The cost of doing so is a little high, but now, research has shown that consumers are definitely willing to pay more for sustainable products: Sustainability is no longer a topic which is sidelined by consumers and companies. sustainability Article Are Consumers Willing to Pay More for Sustainable Products? Q & A with Aysun Bademsoy, Director of 'Spuren – Die Opfer des NSU' (Traces - The National Socialist Underground victims) document.getElementById("link-"+myObj.id).setAttribute('href',myObj.url); For example, one study found Spanish consumers were willing to pay 22–37% more for green products, but Japanese consumers were only willing to pay 8–22% more for green products. For 65.6% of respondents, price is the major impediment to sustainable consumption compared to ordinary one. The report, developed in partnership with Boston Consulting Group, surveyed participants for their preferences related to sustainable packaging along with their willingness to pay more for products with environmentally friendly packaging. Green is the new black: why retailers want you to know about their green credentials. Ultimately, the research that evaluates consumers’ willingness to pay more for green products has been mixed. Indeed, almost three-quarters of Millennials (age undefined in the report, but likely around the age 20-34) claimed that they would pay more for sustainable products, up from about half last year. Veganism is no longer a fad, but has been adopted by millions of people worldwide. Other findings were that only 20% of customers buy sustainable products, though 69% would buy green products if there was detailed information of environmental impact of the product. Sustainability sentiment is particularly consistent across income levels. xmlhttp.onreadystatechange = function() { Birmingham, Birmingham, The Clockwork Universe 169 Shuanggang East Rd., Nanchang 330013, China) Wuyang Hu (College of … Nudge theory is used to understand how people think, make decisions and behave. Author: Joseph Chang. Why are companies manufacturing sustainable products. This statistic shows the share of consumers who were willing to pay more for sustainable products globally from 2013 to 2015. All these companies together generate over 100 billion dollars in annual revenue. Research finds consumers willing to pay more for sustainable products. Manufacturing sustainable products is more expensive than conventional products, but the trend to manufacture sustainable products has been on the rise. Ultimately, the research that evaluates consumers’ willingness to pay more for green products has been mixed. — The cohort of shoppers typically 22 and under is more willing to pay up for sustainable brands compared to other demographics, according to … COLORADO SPRINGS, US (ICIS)--Consumers are willing to pay more for sustainable products that can be recycled or reused, according to a new survey of 6,000 people worldwide by consultancy Accenture. While the price is the top factor, over 20 percent of Gen-Z consumers cited “ethics, business, and manufacturing” as a top purchasing consideration. Further, the majority of Generation Z (54 percent) state that they are willing to spend an incremental 10 percent or more on sustainable products, with 50 percent of Millennials saying the same. While 66 percent of global consumers are willing to pay more for sustainable goods, a full 73 percent of Millennials are (Nielsen defines Millennials as those born from 1977 to 1995). On Earth Day 2020, the organisation Climate Neutral — an independent non-profit organisation working to decrease global carbon emissions — confirmed 103 brands had completed its certification process in 2020 and 50 other brands were still in the process. It found that while COVID-19 has increased focus on price, the pandemic has not distracted consumers from environmental issues. Authors: Guzhen Zhou. As economists say, as price lowers, our willingness and ability to buy an item increase. Global demand, profit, employee engagement … Consumers are therefore willing to pay more for products which are sustainable. Wuyang Hu. If you have a question you’d like an expert to answer, please send it to climate.change@stuff.co.nz. Eco-friendly isn’t quite so broad and defines products or practices that do not harm the Earth’s environment. So the high profits are perhaps one of the major reasons why the consumer goods giants have gone the sustainable way. 2. Are consumers willing to pay more for these? Sourcing of the raw material has to be sustainable for the local area/region, so that the ecological balance is maintained, and the local people do not lose their livelihood, crops, homes and surroundings. So while not all consumers will pay more for green “climate-friendly” products despite the best of intentions, we can slowly nudge them to make better choices for the planet. Gary Mortimer does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment. Step by step approach. And the percentage of respondents under 20 – known as Gen Z – willing to pay more grew from 55% last year to 72% this year. 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