The Current State of Consumer Expectations and Purchase Drivers around Sustainability: Analysis of the Latest Data

1. Claudia Suárez-Gapp
Veridical Lead Public Development and Sustainability - Europe
The Nielsen Company
The Current State of Consumer Expectations and
Purchase Drivers around Sustainability: Analysis of
the Latest Data

2. THE
CURRENT
STATE
OF
CONSUMER
EXPECTATIONS
AND
PURCHASE
DRIVERS
AROUND
SUSTAINABILITY:
ANALYSIS
OF
THE
LATEST
DATA
THE
SUSTAINABILITY
IMPERATIVE
Claudia
Suárez-­‐Gapp
The
Nielsen
Company
17
November
2015

3. Copyright
©2014
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Nielsen
Company.
ConfidenVal
and
proprietary.
3
LET’S
DEFINE
SUSTAINABILITY
Environmental
Governance
Social

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4
SUSTAINABILITY
AND
PROFITABILITY
ARE
NOT
MUTUALLY
EXCLUSIVE
the
success
of
your
business
is
directly
related
to
the
health
of
the
communiVes
in
which
you
operate
sustainability
is
a
leading
factor
in
the
relevance,
viability
and
growth
of
your
organizaVon
integraVng
sustainability
into
your
strategy
enables
responsible
growth

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5
HOW
DO
WE
KNOW
SUSTAINABILITY
AND
PROFITABILITY
ARE
NOT
MUTUALLY
EXCLUSIVE?
Key
Insights
From
2015
The
Sustainability
ImperaVve
Report
Source:
The
Sustainability
ImperaVve,
Nielsen
Report
2015
of
consumers
say
they
are
willing
to
pay
more
for
brands
with
a
commitment
to
sustainability
greater
sales
in
brands
with
a
demonstrated
commitment
to
sustainability,
while
those
without
grew
less
than
1%
social
responsibility
is
one
of
the
most
influenVal
factors
for
corporate
reputaVon
for
consumer
goods
companies
>4%
66%
1
2
3

6. CONSUMERS
ARE
WILLING
TO
PAY
MORE

7. The
number
of
consumers
willing
to
pay
more
for
brands
commi1ed
to
posi4ve
social
and
environmental
impact
con0nues
to
rise—
reaching
66%
in
2015

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8
CAUSES
GLOBAL
CONSUMERS
CARE
ABOUT
Source:
Doing
Well
By
Doing
Good,
Nielsen
Report
2014
THE CAUSES CONSUMERS CARE ABOUT
AMONG GLOBAL RESPONDENTS WILLING TO PAY EXTRA FOR PRODUCTS FROM
COMPANIES COMMITTED TO POSITIVE SOCIAL AND ENVIRONMENTAL IMPACT
PERCENT THAT INDICATE EXTREME CONCERN
INCREASING ACCESS
TO CLEAN WATER
67%
63% IMPROVING ACCESS
TO SANITATION
63%
ENSURING
ENVIRONMENTAL
SUSTAINABILITY
62%
ERADICATING
EXTREME POVERTY
AND HUNGER
52%
PROVIDING
GREATER ACCESS TO
IMMUNIZATIONS
49%
PROMOTING
GENDER EQUALITY
AND EMPOWERING
WOMEN
43%
INCREASING
ACCESS TO
CULTURAL
INSTITUTIONS
(SUCH AS THE ARTS,
MUSEUMS AND
PERFORMANCES)
58%
COMBATING NON-
COMMUNICABLE
DISEASES
58% REDUCING CHILD
MORTALITY
56%
IMPROVING
MATERNAL HEALTH
56%
COMBATING HIV/
AIDS, MALARIA
AND OTHER
DISEASES
51%
IMPROVING ACCESS
TO SCIENCE,
TECHNOLOGY,
ENGINEERING AND
MATH TRAINING AND
EDUCATION
47%
INCREASING
ACCESS TO
TECHNOLOGY
42%
UNDERTAKING
DEVELOPMENT
PROJECTS THAT
BENEFIT THE
COMMUNITIES
AROUND THEIR
OFFICES OR
MANUFACTURING
UNITS
56%
PROVIDING RELIEF
FOLLOWING NATURAL
DISASTERS
55%
ACHIEVING
UNIVERSAL PRIMARY
EDUCATION
54% PROTECTING
ANIMALS
54%
INCREASING
THE FOCUS OF
SOURCING PRODUCTS
WE CONSUME
SUSTAINABLY
49%
PROMOTING
RACIAL, ETHNIC
AND CULTURAL
INCLUSIVENESS
46%
SUPPORT SMALL
BUSINESS AND
ENTREPRENEURSHIP

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SUSTAINABILITY
IS
GAINING
INFLUENCE
Top
purchasing
drivers
for
global
consumers
Source:
The
Sustainability
ImperaVve,
Nielsen
Report
2015
Drivers:
Overall:
Gen
Z:
Millennials:
The
products
are
made
by
a
brand/company
that
I
trust
62%
63%
65%
The
product
is
known
for
its
health
&
wellness
benefits
59%
58%
64%
The
product
is
made
from
fresh,
natural
and/or
organic
ingredients
57%
56%
61%
The
product
is
from
a
company
known
for
being
environmentally
friendly
45%
46%
51%
The
product
is
from
a
company
known
for
its
commitment
to
social
value
43%
46%
50%
The
product’s
packaging
is
environmentally
friendly
41%
41%
46%
The
product
is
from
a
company
known
for
its
commitment
to
my
community
41%
38%
47%
I
saw
an
ad
on
TV
about
the
social
and/or
environmental
good
the
product’s
company
is
doing
34%
38%
41%

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COMMITMENT
TO
SOCIAL
AND
ENVIRONMENTAL
SUSTAINABILITY
IS
OF
UTMOST
IMPORTANCE
Source:
The
Sustainability
ImperaVve,
Nielsen
Report
2015
For
those
willing
to
pay
more,
the
importance
of
these
factors
increased
the
most
Drivers:
Overall:
Premium:
The
products
are
made
by
a
brand/company
that
I
trust
62%
72%
The
product
is
known
for
its
health
&
wellness
benefits
59%
70%
The
product
is
made
from
fresh,
natural
and/or
organic
ingredients
57%
69%
The
product
is
from
a
company
known
for
being
environmentally
friendly
45%
58%
The
product
is
from
a
company
known
for
its
commitment
to
social
value
43%
56%
The
product’s
packaging
is
environmentally
friendly
41%
53%
The
product
is
from
a
company
known
for
its
commitment
to
my
community
41%
53%
I
saw
an
ad
on
TV
about
the
social
and/or
environmental
good
the
product’s
company
is
doing
34%
45%

11. Copyright
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WHAT
IS
THE
KEY
SUSTAINABILITY
PURCHASING
DRIVER
FOR
EUROPEAN
CONSUMERS?
FRESH,
NATURAL,
ORGANIC
INGREDIENTS
FRESH,
NATURAL,
ORGANIC
INGREDIENTS
ARE
PARAMOUNT
TO
52%
OF
EUROPEAN
RESPONDENTS.

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CONSUMERS
CARE
AND
PAY
EXTRA
FOR
SUSTAINABILITY
Percent
willing
to
pay
extra
for
products
and
services
that
come
from
companies
who
are
commiked
to
posiVve
social
and
environmental
impact
ASIA-­‐PACIFIC
GLOBAL
AVERAGE
66%
+11
YOY
Point
Change
76%
LATIN
AMERICA
71%
MIDDLE
EAST/
AFRICA
70%
EUROPE
51%
NORTH
AMERICA
44%
Source:
The
Sustainability
ImperaVve,
Nielsen
Report
2015
2015
YOY
Change
+12
+8
+7
+11
+2

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CONSUMERS
UNDER
34
ARE
WILLING
TO
PAY
MORE
GROWING:
GENERATION
Z
72%
MOST
LIKELY
TO
BUY:
MILLENNIALS
73%
DON’T
FORGET:
BABY
BOOMERS
51%

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14
SMART
CONSUMERS
DO
THEIR
HOMEWORK
AND
TAKE
ACTION
more
connected
millennials
emerging
middle
class

15. SUSTAINABLE
BRANDS
OUTPERFORM

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1,300+
brands
13
categories
13
markets
ON
AVERAGE,
PRODUCTS
WITH
SUSTAINABILITY
EFFORTS
CONTRIBUTED
TO…
OVER
4%
GREATER
SALES
Source:
The
Sustainability
ImperaVve,
Nielsen
Report
2015

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17
BRANDS
IN
DEVELOPED
MARKETS
USING
MULTIPLE
SUSTAINABILITY
TACTICS
TO
ATTRACT
CONSUMERS
36%
41%
21%
9%
1%
3%
4%
2%
61%
54%
66%
88%
2%
2%
10%
1%
North
America
Europe
Asia/Pacific
LaSn
America
Claim
+
MarkeVng
Claim
Only
MarkeVng
Only
None
Percentage
of
Total
Sales
by
Brands
Using
Each
Strategy
(by
region)
Source:
The
Sustainability
ImperaVve,
Nielsen
Report
2015

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CURRENT
CATEGORY
LANDSCAPE
PRIMARILY
FOCUS
ON
MARKETING
Source:
The
Sustainability
ImperaVve,
Nielsen
Report
2015
0%
61%
44%
85%
48%
78%
15%
60%
16%
23%
8%
12%
12%
0%
13%
4%
3%
1%
1%
2%
1%
3%
0%
0%
6%
1%
99%
22%
51%
8%
48%
13%
79%
28%
69%
76%
91%
82%
86%
0%
3%
2%
4%
3%
7%
4%
11%
12%
1%
0%
0%
1%
CSD
Tea
Water
Baby
Food
Cereal
Coffee
Cookies
Snacks
Bath
Tissues
Diapers
Paper
Towels
Laundry
Det.
HH
Cleaner
Claim
+
MarkeVng
Claim
Only
MarkeVng
Only
None
Consumables
Non-­‐Consumables

19. 42%
OF
GLOBAL
CONSUMERS
WANT
MORE
NEW
PRODUCTS
IN
THE
MARKET
THAT
ARE
SOCIALLY
RESPONSIBLE
AND
ENVIRONMENTALLY
FRIENDLY
Source:
Global
New
Product
InnovaVon,
Nielsen
Report
2015

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20
OPPORTUNITY
TO
MEET
CONSUMER
DEMAND
FOR
SUSTAINABLE
PRODUCTS
Source:
Global
New
Product
InnovaVon,
Nielsen
Report
2015

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21
COMPANIES
ARE
RESPONDING
Globally,
Number
of
Concepts
with
Sustainable
Claims
Tested
is
Growing;
7%
of
all
concepts
tested
have
sustainable
posiVoning
(up
3%
points)
ORGANIC
ENVIRONMENTALLY
FRIENDLY
ALL
NATURAL
%
of
concepts
including
the
message/sustainable
posiVoning
0.7%
0.8%
2.3%
4.8%
1.3%
0.5%
Source:
BASES
Line
Extension
DATABASE
Past
10
years
(2003-­‐2008
vs.
2009-­‐2013)
All
Categories
and
Countries

22. YOUR
BUSINESS
–
AND
REPUTATION
–
DEPEND
ON
IT

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68%
53%
81%
79%
61%
49%
57%
62%
74%
44%
79%
73%
53%
56%
60%
47%
RUS
AUS
US
AMERICAS
CAN
MEX
BRA
GER
UK
FRA
ITA
ME
IND
CHI
KOR
SNG
JPN
EUROPE
&
MIDDLE
EAST
ASIA
2015
Global
ReputaVon
Study
-­‐
Opinion
Elites
Personally
Done
in
the
Past
Year
PEOPLE
PROACTIVELY
TRY
TO
LEARN
MORE
ABOUT
THE
COMPANIES
THEY
HEAR
ABOUT
OR
DO
BUSINESS
WITH

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45%
31%
32%
40%
40%
19%
19%
29%
28%
27%
34%
AND
PEOPLE
ARE
TALKING
WITH
OTHERS
AND
MAKING
CHOICES
WITH
THAT
LEARNING
40%
44%
44%
26%
28%
27%
42%
44%
45%
53%
14%
AMERICAS
EUROPE
&
MIDDLE
EAST
ASIA
FIN
SVC
IND
US
MEX
BRA
GER
UK
FRA
ME
CHI
JPN
ProacVvely
tried
to
influence
friends
or
family…
Decided
not
to
do
business
with
a
company
because
of
what
I
learned…
AMERICAS
EUROPE
&
MIDDLE
EAST
ASIA
RUS
US
MEX
BRA
GER
UK
FRA
ME
IND
CHI
JPN
2015
Global
ReputaVon
Study
-­‐
Opinion
Elites
Personally
Done
in
the
Past
Year
RUS

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25
SOCIAL
RESPONSIBILITY
IS
ONE
OF
THE
TOP
MOST
INFLUENTIAL
FACTORS
FOR
REPUTATION
emoVonal
appeal
Financial
Performance
Vision
&
Leadership
Workplace
Environment
High
Product
Quality
social
responsibility
Source:
Harris
Poll
ReputaVon
QuoVent
U.S.
Study,
2015

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EFFECTIVE
SUSTAINABILITY
=
IMPROVED
REPUTATION
=
POSITIVE
BUSINESS
OUTCOMES
Source:
Harris
Poll
ReputaVon
QuoVent
U.S.
Study,
2015
Would
say
something
posiVve
Would
purchase
Would
invest
in
COMPANIES
WITH
EXCELLENT
REPUTATION
COMPANIES
WITH
POOR
REPUTATION
95%
92%
75%
50%
55%
36%

27. SUMMARY
AND
IMPLICATIONS

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Copyright
©2014
The
Nielsen
Company.
ConfidenVal
and
proprietary.
• Consumers
more
than
care,
it’s
an
expectaVon
• Rising
in
utmost
importance;
Millennials
and
Gen
Z
leading
the
way
• New,
innovaVve
products
to
meet
consumer
demand
• Sustainable
brands
outperform
their
counterparts
and
drive
business
growth
• Social
responsibility
greatly
influences
corporate
reputaVon
• Align
your
brand
promise
to
the
causes
consumers
care
most
about

29. THANK
YOU