Sustainability is redefining customer loyalty and retailers must step up efforts, says Retail Insight
The US sustainability market hit $15bn in sales in 2021, according to Nielsen, as sustainably-positioned products continue to gain more traction with consumers.
According to a survey from Retail Insight of over 1,000 US respondents who were asked about their shopping habits over the last 12 months, over two-thirds (67%) of those polled have tried to be more sustainable in their consumption habits over the past year. Broken down by age, 88% of 25- to 34-year-olds said they have become more sustainable in their shopping and consumption habits over the past 12 months.
Additionally, nearly half of (49%) consumers surveyed by Retail Insight said they are willing to spend more on sustainable products and 52% of respondents reported that they would be happy for the price of their weekly shopping trip to be higher if it meant helping the environment.
Another survey of 6,000 primary grocery shoppers conducted by global ingredients company Cargill yielded similar results when it came to a growing consumer preference for sustainable products. According to Cargill's global consumer research, over one-third (37%) of US consumers were more likely to purchase packaged food with a sustainability claim in 2021, up from 31% in 2019.
However, aside from their personal purchases, the majority of consumers surveyed (67%) by Retail Insight felt grocery retailers could be doing more to improve their sustainability credentials and efforts.
Reduced unnecessary food packaging and food waste
So what do consumers want to see from retailers in terms of sustainability practices, and what do they regard as genuine efforts?
The survey showed that 70% of US consumers said food retailers still sold goods with excessive or unnecessary packaging, while a further 69% felt there was not enough of a focus on the role of reducing food waste in grocery stores’ sustainability targets. Fifty-five percent said retailers had not put sufficient focus on reducing food miles (the amount of time and distance of vehicles delivering food spent on the road), and a further 56% said more could be done to create a greener supply chain.
Meanwhile, 61% of survey respondents felt retailers spent too much time championing ‘obvious’ green initiatives, such as recycling, and could do more to be focusing on other meaningful sustainability efforts, such as reducing food waste.
Instead of tossing out of food that is close to its expiration date and sending it to landfills, retailers could be taking advantage of discounted pricing, said Paul Boyle, CEO of Retail Insight.
"Currently 12% of retailers do not implement markdowns [on food close to its expiration date], wasting thousands of tons of food that could otherwise have been consumed by shoppers and that ends up in landfill," said Boyle.
Greenwashing concerns
As consumers become more educated around sustainability efforts, concerns over deceptive 'greenwashing' practices have risen. According to Retail Insight, 54% of US shoppers believed that grocery stores haven't taken any meaningful or significant action, and 6% believed that supermarkets' current sustainability programs are not driven out of genuine desire to help the planet.
“It’s now more important than ever that grocers’ sustainability initiatives go beyond the rhetoric – consumers are voting with their feet – and their wallets - and are actively choosing brands who are genuinely committed to reducing their environmental impact on the planet," said Boyle.
"And this isn’t just impacting sales, it’s redefining customer loyalty; our research shows that 55% of shoppers would be more loyal to a grocery store brands if they perceived the business to be green."
