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Sustainability Is Important, But Be Wary Of Price

May 9, 2012
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New research done exclusively for PLBuyer shows that sustainability is important to consumers, but they aren’t willing to pay a premium for it.

Retailers and suppliers who want consumers to buy sustainable products need to be wary of the price premium attached to those products, according to exclusive research conducted in March 2012, exclusively for PLBuyer by Consumer Science, a Dallas/Ft. Worth-based consumer research firm.

All things being equal, “81 percent of respondents said they would choose a sustainable product over a non-sustainable product,” according to the Consumer Science survey of its 400-member U.S. online panel. But nearly 35 percent of respondents said they would not pay any premium for a sustainable product, and just over 20 percent said they would only pay a 5 percent premium to choose the sustainable product over a non-sustainable one.

“The majority of respondents would choose a sustainable product over a non-sustainable one, but they would be willing to pay little premium, if any, for it,” the survey said.

The difference in those customers willing to pay more for their sustainable products shows up in the youngest age group. Of those surveyed age 18-34, three-quarters said they would be willing to pay some premium for a sustainable product. Of the older age groups, only 58 percent said they would be willing to pay more to buy the sustainable product.

The difference also showed in financial status, as higher income households were more willing to pay a premium than lower income households said they would.

Private label sustainable products, though, are not being clearly recognized by consumers, the Consumer Science data showed. Just less than 50 percent of respondents said they were noticing more sustainable private label grocery products in stores, about the same as those who said they did not notice it and those who weren’t sure.

However, price sensitivity again played a role in sustainable product decisions, the research found. Nearly 80 percent of those surveyed said they would be willing to buy a sustainable private label version of a product rather than a non-sustainable national brand product if the products both cost the same and the private label product was about as good as the national brand.

Showing the potential strength of the sustainable label, about 5 percent said they would switch to the sustainable private label product even if it was not quite as good as the non-sustainable national brand.

Consumers also said that the responsibility for creating and selling sustainable products is not simply incumbent upon the retailer or the supplier, but is a project that both should handle equally.

Among private label grocery products, 72.9 percent of those surveyed said that retailers and suppliers were equally responsible for ensuring the products were sustainable. An additional 15.3 percent said that the responsibility fell to the supplier, while 11.9 percent said that it was the retailer who bore the responsibility for ensuring the sustainability of the products.

While still overwhelmingly a joint project, the numbers shifted decidedly to the supplier side of the equation when consumers were asked about national brand sustainability. In that scenario, 60.2 percent said that it was a shared responsibility of supplier and retailer, but more than a third (33.9 percent) said that it was the supplier’s responsibility to ensure sustainability. Only 5.9 percent said the retailer bore the responsibility for the national brand products’ sustainability.

Overall, 78 percent said grocery product sustainability was a joint responsibility, with 19.5 percent singling out suppliers and 2.5 percent targeting suppliers for responsibility.

An overwhelming majority of those responding said sustainability was important or even essential. On a scale of 1 to 5, with one being totally disagreeing with the statement and five being totally agreeing, less than 10 percent of respondents answered 1 or 2 to the statement, “It is important and we should do what makes financial sense.”

For the statement, “It is essential to fully embrace for the future of the human race,” those two negative categories still totaled less than 20 percent of responses.

On the other end of the spectrum, on the statement, “It is propaganda spread by the media,” 23 percent of males said they totally agreed with the statement, compared with just 5 percent of females.

Higher income households, those with annual incomes of more than $50,000, generally expressed more concern than those with annual incomes of less than $50,000, the research found.

Those inclinations showed when comparing sustainability to other product factors.

Compared with quality, price, healthy nutrition, and “pester power” (described as children or family members demanding the product), sustainability fared poorly.

Less than 10 percent of respondents said that sustainability was the most important of those five attributes. More than 40 percent said quality was most important, while 25 percent said it was healthy nutrition and 22 percent said it was price. Only pester power ranked lower in the “most important” vote.

“Sustainability ranks well below price, quality and healthy nutrition in respondents minds,” the survey said.

However, sustainable products were thought to be the most important sustainable items, more important than sustainable transport and distribution, and more important than sustainable stores.

More than 60 percent of those surveyed said that sustainable products were the most important of the three options. A total of 27 percent said that sustainable transport and distribution was the most important aspect, while just 15 percent said that sustainable stores were at the top of the list.

Finally, consumers said that sustainable agriculture was the most important aspect of sustainability, topping recyclable/reduced packaging, fair trade, climate change, and supporting a good cause/charity.

Consumer Science specializes in primary consumer research.  It utilizes a broad range of techniques and technology to customize research that delivers each customer the most value.

A qualified staff of researchers and moderators provide turnkey research, including study design, respondent recruitment and customized analysis and reporting. The offerings, combining traditional interviewing techniques and the latest technology, include intercepts, one-on-one, dyads, triads, focus groups, large sensory panels, in-home test, surveys, social media monitoring, video analytics and Web analytics. 

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