Sustainability is considered an important purchasing criterion for 60% of global consumers. 85% of people indicate that they have changed their purchasing behavior to be more sustainable in the last five years. Apart from ethical reasons, will sustainability increase the value of your brand, and will consumers be willing to pay more for your product?
People are willing to pay more for sustainable brands
This correlation between being perceived as sustainable and a high willingness to pay shows that taking care of our planet pays off on so many levels.
Many brands across industries show a positive correlation between perceived sustainability and high willingness to pay. However, food brands have an advantage.
Across industries and countries, sustainability is an important purchasing criterion, although price and quality continue to dominate, for now.
Brands perceived as sustainable must live up to consumers’ already high expectations by delivering and communicating their commitment to sustainability if they seek to benefit from such increased willingness to pay.
Consumers also see themselves as the agents of change, meaning the call to action for companies to adapt has never been more urgent.
Younger consumers are more actively taking action to become more sustainable.
Millennials and Gen Z are becoming a force to be reckoned with as they continue to represent a larger share of the consumer demographic.
Short-termism is the enemy of growth
Today, companies must invest, innovate and transform their models to protect their long-term profitability and viability. The emergence of sustainable disruptors and growing consumer awareness will serve to drive the expectation for affordable sustainable alternatives.
Changing mindsets is key. And it takes courage and perseverance to proactively rethink a business. But above all, forward-looking strategic development requires heartfelt dedication.
The word ‘courage’ comes from the French ‘coeur’, which means ‘heart’. We need to re-humanize leadership, we need empathy, to listen, and we need to be inclusive and purpose-driven.
Companies that do not have sustainability as part of their core value proposition must act now to protect themselves against future reputational impacts and loss of market share. Not taking these implications into account could have long-lasting consequences for traditional companies.
The relative importance of sustainability during the purchasing process will continue to increase. More and more consumers rank Sustainability as one of the top five value drivers.
As expectations around sustainability increase, companies will face significant pressure to demonstrate their sustainability credentials and continue to make it a central part of their value proposition.
A substantial portion of consumers are now willing to pay for sustainability, demonstrating that there is a market for ‘mission-driven green businesses’ and why we see an increase in sustainable businesses around the world.
The demand for sustainable products can only grow
Sustainability is about people and the impact on their lives, society, and the planet, not just about products or processes.
Nearly 90% of people say they’re in favor of sustainability. However, less than 5% of them know how to be sustainable.
There are no educational platforms powerful enough or strategically designed to reach citizens: everyone wants to be sustainable but no one wants to pay for the transformation. Sustainability is not a destination, it’s a permanent journey. Achieving the goal requires the integration of five sensitivities: public administration, business, academia, media, and citizens. It’s a shared plan that requires everyone’s commitment.
A new way of doing business and relating to the world is emerging. Many companies have become TOTEMS of our society, where concepts such as leadership, values, and sustainability are key.
It seems that today, investing in sustainability is costly, but not doing so will be even more so.
Andy Stalman is one of Thinking Heads’ Top 100 Management and Leadership Speakers. Known as “Mr. Branding” and considered one of the world’s leading branding experts, Andy Stalman is CEO of TOTEM, one of the world’s leading brand creation, building, and development companies. He is also the author of the best sellers BrandOffOn and HumanOffOn
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