Consumers care about sustainability— so why are so many companies so slow to act?
The two most common reasons I hear from consumer companies explaining why they’re not fully embracing sustainability is 1) “it’s not clear to us that consumers want this” and 2) “consumers aren’t willing to pay more for sustainable products.” These excuses just don’t hold water.
Sustainable products have been with us in some way, shape, or form for quite some time. In fact, ethical and sustainable product pioneers like Natura, Patagonia, Ecover, and Seventh Generation have been with us for decades. They prove that there is and has always been a market for these sustainable and ethical products. And, encouragingly, there is increasing evidence that they’re now growing faster than their unsustainable peers. But this pushback from companies is rooted in a deeper, more fundamental chicken and egg problem— what should come first, customer demand or new, sustainable innovations?
What Consumers Want
If we look at the discipline of marketing more broadly, much of the focus over the last 30 years or so has been on training marketers to develop products and services that are adapted to customer needs. To understand those needs, companies spend well into the billions on market research each year ($47.8B in 2018 alone!). Marketers rely on the data from this research to get an indication of where customers want them to go in terms of new products, services, or enhancements to existing products. However, it’s not quite that simple.
In fact, in many instances, consumers have a hard time articulating what they want at all. Dominic Carter, founder CarterJMRN, of one of Japan’s leading market research firms, elaborated on this point recently, adding:
“It’s extremely rare for consumers to reliably tell you what they really want. They are very poor at articulating solutions on their own initiative. Nevertheless, you can get very clear thematic direction from consumers about areas where needs are currently not met. In this sense, you need a really deep understanding of the consumer’s ‘problem’ before you create a solution.
Foisting a solution in search of a problem is getting things around the wrong way and no market research can help you if you aren’t ‘fixing’ something people care about. This actually happens a lot!”
It’s becoming clear that sustainability, or the lack thereof, in our societies is a major problem for increasing numbers of consumers and they’re starting to vote with their wallets. Incredibly, many companies are still missing this despite the growing evidence. The Sustainable Market Share Index™ by NYU Stern CSB and IRI (pictured above), one of the best sources around for tracking growth of sustainable products and consumer attitudes on sustainability, found that while sustainability-marketed products in the US were 16.1% of the market between 2015-2019, they delivered 54.7% of the growth in the CPG market. Notably, this is up from 50% over the 2013-2018 period. And, interestingly, regular tracking also found a big spike in consumers’ purchases of sustainability-marketed products as the COVID-19 pandemic took hold across the US. Clearly the demand is there and it is growing.
Build It and They’ll Come (Or Convince Them To)
Even if there was little proof of growing interest in sustainable products, this shouldn’t necessarily stop companies from pursuing sustainable innovation. Ultimately, it comes down to a combination of will and ambition. While companies spend massive sums of money each year in an effort to understand consumer attitudes and needs, all of this data often plays a supporting role in innovation. Rather, many companies, especially those who currently or aspire to lead their categories, aim to create demand for their products rather than build and launch the product consumers say they want. And as is widely recognized, some well-known companies have honed the art of this. The example that probably springs to mind first for many people is Apple. Consumers never articulated that they wanted an Apple 2E, a mac, or an iPod, iPad, or iPhone. The fashion industry may mimic certain sub-culture trends, but they generally aspire to be seen as trendsetters rather than followers. And most of the apps and other tech tools that we now can’t seem to live without were developed based on solving latent problems that many people didn’t even know they had.
There’s no valid reason that sustainability and, specifically, sustainable product innovation, should be any different. If companies believe that sustainability is important for the future of their business, the products they develop, launch, and sell should reflect that. Companies convince us all the time to use products and services that we either don’t know we need or may actually not need. Many large companies have immense market power in their sectors. Their active, visible engagement on sustainability can bring swaths of consumers around to more sustainable alternatives.
One of the companies I interviewed that has an inspiring point-of-view on this is Bolton Food, the largest canned fish producer in Europe. Bolton Food has been a big proponent of the MSC (Marine Stewardship Council) certification and has worked to obtain the certification for their brands. While consumers in Europe are aware of the threat to fishing stocks from overfishing and climate change, most don’t yet understand what the MSC certification is nor even what sustainable fishing is. Bolton Food sees it as their responsibility to not only deliver a better, MSC-certified product to customers, but also to educate their customers about its value.
Compelling Companies to Act
We obviously need bolder action from corporations. As someone who wants to see more sustainable products and services on the market, what can you do to motivate businesses to pick up the pace? Here are three actions I’d suggest:
Support purpose-led brands
brightly.eco gives a lot of great tips on ethical and sustainable brands, many now provided by their thousands of brand ambassadors around the world. Conscious consumers now have more choice than ever, which is a great thing. Encouragingly, we are seeing more and more how purpose-led startups can quickly disrupt whole categories. The best example of this at the moment is plant-based meat. Innovators in this space are attracting investment like never before and have a growing place in the diets of many around the world (a trend that was spectacularly accelerated by COVID-19), so much so that meat consumption is expected to rapidly decelerate in the coming years. This trend will take a big chunk out of the $2.7T meat industry, inflicting much pain on “Big Meat”. And they’re not alone—giants in cosmetics, food, home cleaning, etc. have all been pressured by the impressive growth of more sustainable upstarts. Perhaps more than anything, competition and the threat of declining sales compels companies to change.
Spread the word
Many of us have extensive networks, fueled by our active social media presence. Use your platform to spread the word about brands you love and support. In addition, when established companies take big, positive steps towards sustainability, share that news and express your support for what they’re doing. And, of course, if they’re moving in the wrong direction, don’t be shy about calling that out too. Let them know that conscious consumers are engaged, growing in number, and here to stay. Companies will take notice.
Build your own
For the creative, entrepreneurial types, you and your idea might be the disruption that changes whole industries. Although we have more sustainable products and services than ever before, there are arguably still not enough, particularly in certain areas (for example, home furnishings, plastic alternatives, or food circularity to name a few). So, if you’re passionate about sustainability, have a great vision and product idea, have a drive and enthusiasm for entrepreneurship, and have the ability to do so (i.e. time/availability, means, or other support), build it yourself!