Shoppers reject 'green premium'

25 September 2012

NEW YORK: US consumers are willing to change their personal behaviour to save energy, but are increasingly reluctant to spend more on green products, according to new research.

GfK's 2012 Green Gauge survey of 2,000 US consumers indicated that the proportion of people willing to pay more for sustainable goods had fallen by 5-12 percentage points over the last year depending on product category, Ad Age reports.

The market researcher also said that sales of these environmentally friendly brands were worth $40bn in the US last year. Almost all respondents (93%) said they had adopted at least some energy-saving behaviours.

Across categories, there was a consistent trend away from making "green purchases". In 2008, 62% of the GfK survey respondents said were willing to pay more for a car that pollutes less, a figure that was down to 49% by 2012.

Similarly, 70% would pay more for energy-efficient light bulbs in 2008, but this proportion has now dropped to 60%.

Organic foods account for the bulk of spending on eco-products and they too are seeing increased resistance to higher prices, with a fall from 57% to 51% in respondents prepared to pay for a lack of pesticides or antibiotics.

Diane Crispell, consulting director at GfK, told Advertising Age that overhyped claims by marketers are to blame.

"Consumers have become hypercritical," she said, adding that people are motivated and the awareness is there "but the novelty has worn off for green products. .

Even if consumers are loath to spend more in this field, companies are finding that an eco-friendly approach to business practices can pay dividends.

As reported by Warc News yesterday, a study by Osmosis Investment Management has found that those companies that have gone furthest in tackling sustainability issues are the ones that are yielding above-average results in areas such as margin levels and shareholder returns.

Data sourced from Advertising Age; additional content by Warc staff