By Jane Klopp, Senior Director, Insights
It is estimated that Millennials will spend $65 billion on consumer packaged goods (CPG) products over the next decade. Recent research has highlighted the importance of sustainability for Millennial consumers when they’re choosing a brand. Sustainability can mean a wide range of things, from a company’s strategic objectives that revolve around the brand’s story/positioning to the more tangible elements such as packaging choices. Innovative CPG brands are using these insights to influence marketing, product design, packaging, communications and more. Let’s take a closer look at the importance of “visible sustainability” to attract Millennial buyers and other consumers and how brands can build on those ideas to launch successful CPG products.
Understanding the Millennial Mindset
It’s fair to say that Millennials are the most studied generation ever, from market research to constant monitoring of their social media conversations. One trend that’s revealed repeatedly is Millennials high level of awareness and concern of environmental and social issues they are confronted with in present-day. Millennials care how their choices impact other people, animals and the environment. Both corporate responsibility and sustainability throughout the value chain are influential factors that play a significant role in the purchase behavior of Millennial consumers. How well a brand resonates with this Millennial mindset and commits to product development and marketing that delivers on consumers’ expectations will set the stage for brand success.
Understanding What Sustainability Means
Sustainability is an overused term in the marketing world, but at its fundamental level it refers to products or services created with social and environmental values in mind. Yet the reality is that it’s difficult for consumers—even ones who believe very strongly in the importance of sustainability—to envision how these sustainable products will benefit them and live up to their values and expectations. Options may be limited or information about sustainability not clearly shared in product marketing. For some consumers, sustainable options like organic produce or grass-fed meat are simply out of reach. CPG companies that take the time to understand the perceived value of sustainable products through the eyes of their consumer, and apply that learning to product development and marketing communications will be in a stronger strategic position.
Sustainability can be:
- Corporate dollars spent toward charities or mission-based causes, like Apple’s Product Red or Tom’s Shoes “Buy a Shoe, Give a Shoe” campaign
- How companies select their suppliers, including partners’ labor and environmental practices
- How waste and environmental aspects are handled
- The sustainability of the manufacturing process
- Transportation choices, from local sourcing to taking steps to reduce fuel consumption on shipped products
- How food waste is handled
- Decisions about organics and GMOs
- Recycled and reusable packaging
Consumers are interested in learning more about how brands are tackling these important issues. The onus is on brands to clearly communicate these advantages to buyers. For example, Dole recently expanded their frozen fruit selection to include new packaging, which includes stand-up foil bags that are resealable. The target market is people who make smoothies. While there is a convenience factor in being able to access a single serving of fruit at a time, the new packaging will resonate well with consumers for its environmental and sustainability implications as well.
How Brands Can Capitalize on Sustainability
Think visible: Most of the trend analysis around this important issue highlights the term visible. Consumers are anxious to support sustainable brands. Yet few consumers have the resources or inclination to dig deeply into the business practices or even ingredients of specific products. Therefore, CPG brands need to be strategic and communicate their sustainability practices in a transparent way, from marketing to labeling to packaging to certifications (such as organic, non-GMO, etc.). The more clearly a brand’s sustainability commitment is articulated, the more likely consumers will envision an end benefit which will result in a greater likelihood of purchasing the product.
Evaluate packaging choices carefully: One of the most important and visible elements of a sustainable brand is packaging choice. What materials are used to make packaging? Are the core materials recycled? Does the serving size or seal make it easy for consumers to behave in an environmentally friendly way with the item? Are key elements of your sustainability efforts highlighted in the package’s messaging? The more visual clues that your packaging contains, the better consumers will be able to make smarter decisions when at the store shelf deciding which product to purchase.
Developing a core brand sustainability story: At a higher level, companies need to be aware that their core brand stories also play an essential role in how consumers perceive their sustainability commitments. For example, many brands focus on a farm-to-table narrative or highlight their commitment to sustainability throughout the product manufacturing process.
Sustainability is an increasingly important buying criteria for today’s consumers, especially Millennials. It’s important for CPG brands to understand how their audiences define sustainability and find accessible ways to communicate those values. From an overarching sustainability-related brand narrative to strategic packaging choices, CPG brands that showcase their sustainability commitment, which is their ability to connect emotionally with their consumer as well as deliver on their promise, are poised to win a higher share of consumers’ business.