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Lacey Bertucci

By: Lacey Bertucci on May 16th, 2019

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Sustainability sells. What's in it for brands?

Sales  |  high-order attributes  |  off pack attributes

Four out of five global respondents said that it is “extremely” or “very” important that companies implement programs to improve the environment. And 30% of consumers are willing to pay a premium for products that deliver on social responsibility claims.*

Sustainability has a myriad of meanings to consumers. And there’s a broad spectrum of practices that encompass what it means to be sustainable in their eyes.

For brands, sustainability can show up in products themselves, the process by which the products are made, and in those products' packaging.

Beyond sustainability as a standalone driver, when coupled with clean label trends, sustainability is proving to be even more important for food and beverage products. Nielsen Product Insider clean label segmentation trends show no signs of slowing, and products with simpler ingredient lists continue to win big with consumers. As the proliferation of clean label products continue to make it harder for brands to stand out, incorporation of sustainability practices that consumers value has the potential to help differentiate at the shelf.

Clean Label & Sustainability drives Consumer Packaged Goods (CPG) sales:

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Source: Nielsen Product Insider, Food & Beverage dollar sales growth vs year ago (year ended March 9, 2019)

  1. Top food categories (and subcategories) driving 90% of clean label sustainable growth:

    • Salty snacks - tortilla chips, popcorn and vegetable based salty snacks
    • Vegetables - prepackaged salads, mixed vegetables and tomatoes
    • Desserts - frozen novelty & ice cream
    • Eggs - chicken eggs and egg substitutes
    • Fresh meat - beef, turkey and chicken

    Consumers are motivated differently depending on the categories they’re seeking. Consumers are also thinking beyond the actual product itself and are interested in sustainable resource management practices and packaging materials, too. At Label Insight, we’re seeing trends emerge in food & beverage categories you might not traditionally think of as touting sustainability claims and certifications in an effort to better connect with consumers.

    Top food categories and common sustainability practices:

    Source: Nielsen Product Insider, Food & Beverage dollar sales growth vs year ago (year ended March 9, 2019)

    Social responsibility, ethical  +6% (+$76M)

    1. Packaged coffee +3% (+$24M)
    2. Eggs +51% (+$22M)
    3. Beverages +47% (+$14M)

    Social responsibility, fair trade +5% (+$75M)

    1. Candy, gum & mints +15% (+$24M)
    2. Desserts +4% (+$22M)
    3. Fruit +56% (+10M)

    Sustainable packaging, TerraCycle +1% (+$14M)

    1. Sweet snacks +23% (+$67M)
    2. Meal combos +7% (+$9M)
    3. Fruit +5% (+$7M)

    Sustainable resource management, renewable energy +4% (+$25M)

    1. Fruit +44% (+$23M)
    2. Candy, gum & mints +10% (+$9M)
    3. Diet & nutrition +4% (+$4M)

    Sustainability trends are increasingly influencing shopping behavior across the store. Specifically, emerging within pet food products. 95% of consumers say pets are part of the family, and as such are searching out the best quality in pet foods and treats. Human grade pet food ingredient trends continue to increase in popularity, therefore it’s no surprise to see sustainable practices that humans are prioritizing also carry through to influence their pet food purchases as well. Most sustainable practices pertain to animal welfare, the overall well being of the animals used as primary source of protein ingredients present in many pet food products:

    Top animal welfare sustainability practices within pet food:

    Source: Nielsen Product Insider, Pet Food dollar sales growth vs year ago (year ended March 9, 2019)

    • Farm-raised +12% (+$159M)
    • Free-range +104% (+$9M)
    • Cage-free +7% (+$2M)

    Sustainable practices are also prevalent within personal care categories. Anna Thibaut, Label Insight Non Food Data Manager, notes several proven and emerging sustainability trends below.

    “We commonly see certifications like B Corporation, TerraCycle, sustainable ingredients like palm oil and animal welfare organizations present in the personal care category. Consumers want to know that the products they are purchasing are not only good for them, but are also good for the environment.”

    - Anna Thibaut

    • Reef-safe: “In May 2018, Hawaii passed a bill that bans the sale of sunscreens with chemicals perceived to be dangerous to reefs. NOAA states sunscreens that contain oxybenzone and octinoxate are indeed harmful to coral reefs. EHP also confirms that sunscreen chemicals may be causing coral bleaching.” There are 59 sunscreen products in Label Insight’s database that are reef safe.
    • "Green" chemistry: “Consumers are continuously looking for products with specific attributes that meet their ethical and environmental values, and high on the list are natural ingredients with green credentials. 'Green Chemistry’ focuses on designing products and processes that minimize the use and generation of hazardous substances and have a small environmental footprint.” There are 32 personal care products in Label Insight’s database that make green chemistry claims on-package.
    • Sustainable palm oil: Roundtable on Sustainable Palm Oil (RSPO) certifications are found on 43 personal care products within Label Insight’s database.
    • TerraCycle's free recycling program funded by brands, manufacturers, and retailers around the world to help you collect and recycle your hard-to-recycle waste, and is found on 424 personal care products.
    • A continuing trend is products that are Certified B Corporation, which voluntarily meet the highest standards of verified, overall social and environmental performance, public transparency, and legal accountability.

    Our partners at Nielsen predict sustainable-minded shoppers to spend up to $150 billion on sustainable products by 2021. This is the call to action for brands and retailers to capitalize on to unearth significant growth potential.

    Learn more about Nielsen Product Insider or schedule time to talk to one of our subject matter experts here.

    Insights in this post were derived from these sources:

    1. *The Conference Board® Global Consumer Confidence Survey conducted in collaboration with Nielsen Q2 2019
    2. Nielsen Product Insider, powered by Label Insight, 52 weeks ending 3/9/19

About Lacey Bertucci

Senior Solutions Consultant @Label insight: Lacey received her Bachelor of Science from Cornell University and was a four year member and team captain of the Varsity Women’s Basketball team. With ten years experience in the CPG industry, she has a passion for ingredients, syndicated data and analytics.