Consumers are becoming more familiar with the term “sustainability,” and trust is increasingly dependent upon transparency, in terms of how consumers evaluate what they hear from companies and what consumers want to know about companies’ products and business practices, said The Hartman Group CEO Laurie Demeritt in a recent webinar.
Familiarity with the term “sustainability” reached an all-time high in 2015, now at 79 percent, up from 54 percent in 2007, said Demeritt, though there remains a gap between aspirations and actions of consumers with regard to sustainability.
The meaning of sustainability is broadening but remains resource-centric: Natural resource conservation, responsible farming methods and land stewardship show the largest increases in 2015, all of which relate to land.
Consumers are most concerned, however, with food, personal care products and household items, or those products that go in, on or around their bodies.
“Sustainability is most important for food products,” Demeritt said. “Food is the gateway in, and produce is typically the gateway within food. That’s at the top of the list, and then they start thinking about meat, dairy, baked goods and center store.”
Sustainability is primarily a values-based orientation, and consumers go through moments of reevaluation, that are often triggered by life-stage changes, for example, when they change jobs, or when they marry, have a baby, or recover from an illness.
The percentage of consumers who say they usually or always make purchasing decisions based on sustainability concerns has increased from 18 percent in 2007 to 29 percent in 2015.
For this, product labels are extremely important. When consumers are at the shelf, they make judgments about the product based on the ingredient list, story or narrative they’re being told. The vast majority of consumers believe companies’ sustainability claims, though skepticism does exist when it comes to what companies – especially large ones – say if it seems to serve their agenda.
In addition to not knowing which products are truly sustainable, barriers to sustainable purchasing continue to be perceived cost and practicality, said Demeritt.
Transparency and Trust
Sixty-eight percent of consumers claim to be aware of the term “transparency” as it relates to business practices, which includes the openness and honestly of a company’s business practices as well as transparency around products: what’s in it, where it’s from and how it’s made.
“Transparency is the new norm in the digital era – it’s expected,” said Demeritt. “Consumers want to support companies that prioritize the treatment of both workers and animals.”
Consumer examples of best practices include Costco, for treating employees right and sourcing sustainable seafood, and Chipotle, for highlighting the sourcing of ingredients and animal welfare.
“Because many companies have not shared their stories, there is an opportunity gap between consumer interest in transparency and consumer identification of products and companies acting on it,” Demeritt said.
While consumers are beginning to recognize some larger, well-known companies for transparency and sustainability, smaller companies still have an opportunity because consumers are actively seeking product information. And millennials see small companies as inherently more sustainable.
One question asked whether there is a connection between transparency and locally grown produce, and if non-local can play in that.
“Local means probably fresher, and probably grown by people who have values like me,” said Demeritt. “What we see is, when consumers talk about a local product, they’re really talking about where it came from.”
So, for example, consumers might be looking for blueberries that come from the area with the best soil for blueberries, presenting the idea of locale vs. local.
“It means it’s coming from a place with inherent quality,” said Demeritt. “Consumers believe there are certain places where if you grow it there, it’s going to be better. That narrative can be very impactful.”