Faced with rising inflation, will people continue to pay more for ‘green produce? New research from quantilope delves into shoppers’ sustainable attitudes and behaviours.
There is no doubt that more shoppers aspire to buy products that make them feel they are doing their bit for the planet, whether that’s opting for organic, choosing products that source local ingredients, avoiding those that contribute to unsustainable practices such as deforestation, or ensuring that they buy biodegradable/recyclable packaging.
These cleaner and greener purchases often have a higher price tag attached than mainstream options. There are several reasons for this – a lack of demand, higher quality raw materials, or the additional cost of carrying out fair and equitable business practices.
The question for many brands faced with rising raw material costs is how much they can increase pricing before shoppers switch to more affordable products?
Closing the Value-Action Gap
Even before inflation started soaring and we faced the worst cost-of-living crisis in a century, most people were shopping in more sustainable ways and some were prepared to pay more to do so.
The fact that some people will pay to shop more sustainably challenges the value-action gap theory where despite the best ethical or sustainable intentions, when it comes to choosing a product on the shelf most people do not act on their intentions. This is either because they didn’t have time to validate their aspirations or price acted as a barrier.
Indeed, in our recent 2022 Consumer Trends in Sustainability study, the majority of shoppers (79%), are still predominantly price-led in their decision about which food and drink products to purchase.
Money, or with rising inflation lacking money, will continue to be a barrier to adopting more sustainable shopping practices for more than half of shoppers, with just one in five making planet-friendly choices that prioritise sustainable packaging (20%) and buying products with local ingredients (19%).
Of course, there is no denying the incredibly important role that price plays in the game of shopping more sustainably and limiting the impact of our purchases on the planet. Yet this doesn’t mean that they will never pay more. The picture is far more nuanced, particularly as most shoppers really do want to do their bit for the planet. Even in the face of soaring costs, concern for the planet is creating an almost activist approach to shopping for some.
In our research, we discovered a large segment of people who are so hypersensitive about reducing their use of plastic and eradicating plastic waste that they do more than anyone else to reduce it in their purchases, while separating and recycling the plastic they do sometimes have to buy.
These Waste Warriors make up a third of UK shoppers and 42% of German shoppers. Typically older people, with a greater proportion aged 40 to 49 years compared to other segments identified in our study, Waste Warriors are more likely to be university educated, small city or suburban dwellers and earn a slightly higher income than average. They strongly believe that protecting the environment is one of the most important issues of our time.
They are less interested in the climate friendliness of the ingredients of their food. That’s the domain of our Ingredient Inspectors who actively check for nasties, such as palm oil, which can have a less direct but no less devastating impact on the planet.
Ingredient Inspectors (32% of UK shoppers and 29% of German shoppers) are primarily focused on the content of the food they buy, but are more likely than other segments to shop locally, believing that this can have a positive influence on the planet. Money is much less of a barrier to this group, but time and effort is.
To explore the issue of price in more detail, we also conducted a price sensitivity test on three versions of unbranded tomato ketchup, which we ran on separate portions of our sample so that we could avoid any order or priming effects.
British shoppers are willing to pay more for natural ingredients and sustainable packaging. However, Germans are far less willing to pay a premium. They seem to expect natural and sustainable to be part of the normal bottle of ketchup at the regular price.
Furthermore, because Germans are such keen Waste Warriors, it seems that proper disposal of the pack drives the optimal pricing for a sustainable package and the normal package. They do not distinguish.
Even when you find a segment of shoppers who identify as positive activists, such as our Waste Warriors, price remains a critical deciding factor for some.
The role of brands in helping consumers act sustainably
This means that understanding what the attitudes to sustainable shopping are to a brand’s target group is critical. This is particularly true because consumers are becoming more demanding about what they expect of brands and are, increasingly, choosing to buy brands that align with their own beliefs.
Images of the impact of unsustainable choices – such as plastic waste in the oceans, and more recently climate change protests around the recent Intergovernmental Panel on Climate Change (IPCC) report – act as a constant reminder to us all that there is no Planet B. This growing conscientiousness is closing the value-action gap, but there will be a point when the price threshold makes it impossible.
This is where brands can show their support. They need to find a balance in proving their sustainable values at a competitive price.
Pricing people out of their more sustainable purchases could impact their relationship with the brand in the long-term, so it’s something to consider very carefully.
Whatever actions a brand takes with its sustainability credentials, it needs to make sure that it communicates these clearly to consumers. Our research highlights confusion about what products are sustainable. On the issue of recycling alone, with over 25 different recycle standard labels in use, it is hard for the consumer to choose.
When the action is easy to slot into everyday life, people are happy to take it. With rising inflation threatening disposable income, it is critical that manufacturers understand how changes they make to product pricing and packaging can impact consumer decisions.
Brands that will be best placed to win in the future recognize that not all consumers are the same and have different attitudes around sustainability. They need to address the sustainability concerns of consumers, tailor their approach and communicate what they do clearly and without making them pay too much of a premium.