Following BBC’s marine documentary “Blue Planet 2,” plastic became the buzzword of 2017. This led to widespread action on plastic straws and water bottles, resulting in a recent EU ban on single-use plastics, by 2021. What started with plastics hasn’t stopped there. Increasingly, other industries and product types are coming under scrutiny, such as wet wipes, nappies, and microplastics.
That was in 2017, what has happened since?
In 2019, the discussion has extended to “fast fashion,” and the responsibilities massive companies such as H&M and Inditex, the owner of Zara, have towards our planet and society.
The ever-growing discussions on sustainability in the news, on social media, and in everyday conversation shows that sustainability is not a passing fad, but a trend to be taken seriously. One, that will provide new areas of growth for many companies.
Trends are showing that more first-time entrepreneurs are building their companies around environmental protection. Many new start-ups are focusing on creating a circular economy. Not only are they providing durable, eco-friendly and recycled products, but are moving away from the traditional business models, to sustainable ones.
Naturally this has been picked up by consumer goods giants as well. In 2018, Unilever launched biodegradable wipes with Simple, a leading skin care brand, to strengthen their environmental footprint. Beauty giant, L’Oréal, launched the product line, Seed Phytonutrients. The product formulas are gluten-, paraben-, sulfate- and cruelty-free, and all are between 93–100% natural. They are also packed in shower-friendly paper bottles, which are recyclable and compostable.
Do the new products reflect actual consumer demand, or is it simply company good will?
Well, fortunately for the planet, consumer demand for sustainable products is growing at an unprecedented pace. Nielsen estimates the sustainable consumer goods market, which was worth $128.5 billion in the US in 2018, will grow to $150 billion by 2021. This is not limited to the US. We see similar trends throughout other countries. In the UK, the sustainable consumer goods spend was £83 billion in 2017, and it is still growing today.
Unilever estimates that 70% of their brand growth is coming from their “sustainable living” brands, such as Love Beauty and Planet, which launched in 2017. This eco-conscious brand is vegan-friendly, and uses bottles made from recycled plastics.
As you can see, sustainability is not only important for helping the planet, but also as an opportunity to develop new revenue sources. But with this winning formula, why aren’t all companies on the sustainability train already? Surely, it’s a no-brainer? There are several reasons for this, but one thing is overwhelmingly clear; even though consumers are becoming increasingly aware of sustainability, their shopping basket still remains only partially sustainable.
Why aren’t we always purchasing sustainably?
Convenience, price, habits, and brand loyalty are usually cited as the most common reasons. While many consumers have good intentions, everyday life restrictions and long-standing habits get in the way.
However, this is changing rapidly and, as ever, millennials are leading the way. Frequently nicknamed the “Green Generation,” ~75% of them are altering their shopping habits by purchasing eco-friendly and sustainable products. This heavily contrasts from the modest 34% of the Baby boomer generation. Millennials seek to make a difference, and strongly believe they should do their part, however small the impact may be. The difference in shopping patterns is believed to lie mainly in product research.
Baby boomers comment that they find it hard to find products that are sustainable, and for that reason they remain with products that they know. Millennials, on the other hand, are digitally savvy and can rapidly obtain product information and sources online. This usually comes from customer reviews and social media.
For all companies, transparency is key. All product information should clearly articulate the sustainability benefits. Millennials like to be made aware of the interconnectedness of purpose-related issues. For example, a product may be plastic-free, but contain palm oil. With clear product information the consumer is aware of which problem the companies are addressing – palm-oil or plastic-free products. Due to this interconnectedness, they can aim to address one problem at a time.
As a consumer product company, how can I align my strategy to consumers demanding sustainable options?
Luckily, consumers nowadays don’t only communicate with their wallet, they use social media to communicate satisfaction, displeasure or simply talk about their shopping experience. In an analysis carried out on Twitter, with Capgemini Invent’s Customer Engagement and Insight Driven Enterprise team, we discovered that, over a week, 17,279 tweets were written in the UK about water bottles, and 7.8% of those tweets mentioned sustainability. For wet wipes this figure was 3,540 and 6.5% respectively.
We were surprised to see a relatively low number of tweets discussing diapers and sustainability, 16,665 and 1.9%. In the US; however, this topic has been at the forefront of conversations. The Honest Company, an ethical consumer goods company, has caused a stir in the sustainable diapers category. Their eco-friendly and natural approach has struck a chord with a varying range of consumers and age ranges. This has enabled them to grab a substantial part of the market.
The large number of consumers discussing product sustainability indicates there is a massive opportunity for consumer goods companies, of all sizes, to enter the sustainability market.
So, we’re clear on opportunities but what are the challenges?
The challenge for companies who wish to enter this market, is not only to create and adapt their products, but also provide consumers with enough product transparency. This includes informing them on product ingredients, and where the products can be bought.
The next challenge is to ensure that products are conveniently sold, so that consumers don’t face any difficulties in purchasing the products. Consumers value convenience when shopping and believe that brands can make the experience more purposeful by selling affordable, and easy to purchase products. We all want to do good but running through Tesco before closing time on a Thursday evening, with kids in tow, sometimes makes searching for the right sustainable product impractical.
Hopefully, these market signals and consumer pressure combined will ensure more products are created ethically, sustainably and are made available in a convenient way. It just takes one break through to change an entire category. To quote a colleague, “Once a company has labelled their tuna “dolphin safe,” you can’t go back. You don’t want to be selling the tuna that isn’t “dolphin safe”.
See our Capgemini website on how we are developing sustainable client offerings here: https://www.capgemini.com/corporate-responsibility/developing-sustainability-client-offerings/