Nielsen: Consumers push sustainability demand in products

Consumers today do care about how products are made and the ingredients or raw materials they contain. Nielsen anticipates the demands will likely push the U.S. sustainability market to $150 billion by 2021.

Nielsen said consumers are using their spending power to effect the change they want to see in the world.

“Our projected sales echo the steady climb that the sustainability market has experienced in recent years, so corporations would do well to understand what attributes matter to consumers and meet the sustainable traits they’re seeking,” Nielsen noted in a recent insights blog.

The data marketing firm said 48% of U.S. consumers indicate they would definitely or probably change their consumption habits to reduce their impact on the environment.

“And these consumers are putting their dollars where their values are, spending $128.5 billion on sustainable fast-moving consumer goods (FMCG) products this year (through October),” the blog reported. “Since 2014, these influential shoppers have grown sustainable product sales by nearly 20%, with a compound average growth rate (CAGR) that’s four times larger than conventional products (3.5% vs -1.0% comparatively, based on 3-and 2-year annual returns).

“By 2021, we expect these sustainability-minded shoppers to spend up to $150 billion on sustainable FMCG goods an increase of $14 billion to $22 billion,” the blog said.

Nielsen said sales of products with sustainable attributes make up 22% of the total store, with organic, sustainable and clean attributes driving the majority of the sustainable category growth.

“By 2021, we expect sustainable goods will make up 25% of store sales,” Nielsen noted.

Millennials are driving the growth of the sustainability market, but Nielsen said overall, 60% of Americans fall into the “sustainable mainstream” category. They want to be more sustainable and are also searching for some added benefit including improving health or lower costs and environmental savings.

“The generational divide in sustainability is fueled by technology. We’ve found that sustainable shoppers in the U.S. are 67% more likely to be digitally engaged, which means they are used to having the products and knowledge they want right at their fingertips. With their devices playing a significant role in their purchase decisions, a simple and frictionless shopping experience between on and offline is critical,” said Sarah Schmansky, Vice President, Fresh/H&W Growth & Strategy, Nielsen.