Growing consumer awareness of eco-friendly products - A threat for companies?

A new global tendency called "Environmental conscience"

An article released by Forbes proved that American consumers expect companies to help them make a positive impact in the world y creating and consuming environmentally sustainable goods and services. 

People are more and more aware that their future has become jeopardized by consumer practices encouraged by companies, and wish to become more environmentally conscious in the way they consume.

According to the Trend Tracker Report made by SurveyMonkey in 2015 : 

• 50% of surveyed consumers are totally against GMO foods, 
• 1 person out of 3 would rather buy eco-friendly goods,
• 5% of all surveyed intend to purchase a hybrid or electric car when they’re about to replace it.

The above report drew attention to a new global trend called “environmental awareness” : American consumers are more inclined to spend more goods and services if they turn out to be environmentally-friendly, e.g. reusable packaging, modes of transportation. In parallel, people unwilling to pay more for eco-friendly alternatives dropped to less than 9%. 

Another survey released by Accenture which includes a broader base of 6000 participants from all over the world, e.g. the US, Europe, Asia..., came to the conclusion that more than 80% responded that it is “Important or Extremely important” that companies must develop more sustainable products, or at least, develop a more environmentally-friendly packaging that could be safely treated and reused in the future. Such figures can be justified by people’s willingness to downscale the negative impact on the environment from the excessive usage of plastic consumption to a more environmentally safe material such as paper. 

Finally, 72% of respondents reported that they changed their buying habits in the last 5 years to favour environmentally-friendly products, with the figures reaching 81% for people claiming to be inclined to buy more of such products over the next 5 years.

Case study - Coca Cola

A big company such as Coca Cola already registered important growth in sales thanks to its popular can format made out of aluminium, and its line of “light” and “sugar-free” drinks.

Coca Cola has been observing a decline in soda consumption in the US, so the company intensified its communication on beverages with little to no sugar (for the sake of keeping a healthy lifestyle) along with smaller and eco-friendly packaging, which go hand in hand with the new commitment of customers to become smarter buyers and save the planet by minimising waste. 

And It worked - 25cl sugar-free can sales grew by 15%.

Net sales rose $9.5 billion in the third-quarter of the fiscal year (2019), which amounts to a 8% increase above expectations of $9.4 billion.

Surprisingly, Coca-Cola expects weak sales in its water brands since consumers have changed the way they perceive plastic — buyers deliberately turn down one type of packaging to favour more environmentally-friendly materials, such as aluminium, which can be reused many times. 

Coca-Cola proved that companies need to adapt their production standards to keep pace with rising consumer awareness of eco-friendly products.

Companies need to provide sustainability while respecting people's values

There is a bigger challenge for companies to adapt to the new environmental and social values of millennials (people born from the 1980’s to the 2000’s) — they need to provide sustainability while respecting people’s values.

Today, the public is prone to take part in protecting the world by adopting environmentally-friendly products, but they need companies to follow their lead. How can people make a difference by minimizing waste if plastic cutlery comes as default when ordering food?

Now that there is a growing consumer awareness of eco-friendly products, brands need to act responsibly to keep their customer base. If the brand doesn’t play their part in helping consumers improve their environmental impact, they’ll lose market share. However, by establishing measures to reduce their environmental impact and maintaining high-quality standards, company will develop a strong competitive advantage to gain market shares and increase their revenue. 

An eco-friendly vision for a company suggests better performance, higher return, improved trust and loyalty from their customer base. It’s a win-win situation. 

People have been doing their bit — they have been transforming their consumption habits to favour products from companies that are readapting their strategy to bolster their commitment to responsible business practices in a way that sustains the planet without threatening it.

727 words.

Sebastien Milhomme