🌍 The Power of Doing Good: Boosting Sales Through Sustainability 🌿
Are you looking to drive growth in a world increasingly concerned about sustainability? You're in the right place. A recent study conducted in collaboration with NielsenIQ and McKinsey & Company revealed some fascinating insights about consumer behaviour. And it's clear: consumers are putting their money where their values are.
According to the study, products that didn't have ESG-related claims on their labels grew, on average, 4.7 percent per year, while products that did have ESG claims grew 6.4 percent. This increase is huge for CPG, a sector that generally grows in line with the economy. Even more interesting, products with more than one ESG-related claim saw twice the growth of products with only one claim.
The NielsenIQ and McKinsey study also found that products with ESG-related claims grew faster in two-thirds of categories than those without. There was also a wide range of consumers across incomes, life stages, ages, races, and geographies purchasing ESG-related labels, suggesting that environmentally and socially responsible products appeal to broad audiences.
It's important to note that the study revealed that growth was not uniform. There wasn't a "silver bullet" claim that was universally successful across categories. Specific claims that performed well in one category often didn't perform as well in others. However, if a company creates environmentally and socially responsible products across its portfolio, it can be confident that it should be rewarded by consumer demand overall.
The study also found that consumers responded positively to ESG-related claims across all price tiers, including less expensive, private-label products. This finding indicates that consumers choosing private-label brands may not just be seeking the cheapest items – they might also be eager to support affordable ESG-related products.
The study's findings also debunked a common myth. Consumers don’t seem to reward any specific claims across all categories consistently. Rather, less common claims were associated with higher growth than more prevalent claims, showing that unique claims can serve as a means of differentiation and can significantly impact a company’s ESG goals and impact commitments.
Furthermore, brands that earned more than half of their sales from products making ESG-related claims enjoyed a 32 to 34 percent repeat purchase rate. This suggests that a deeper engagement with ESG-related issues across a brand’s portfolio might enhance consumer loyalty toward the brand as a whole.
One crucial takeaway for companies is ensuring their ESG claims are authentic and backed by real-world impact. In nearly 80 percent of the categories, the study showed a positive correlation between the growth rate and the number of distinct types of ESG-related claims a product made. However, these claims must be backed by genuine actions with a meaningful ESG impact. Consumers are approaching a point of zero tolerance for greenwashing, and companies face significant risks if they attempt to make claims that aren't grounded in genuine actions.
So, where does this leave us? The old adage that a company can do well by doing good seems truer than ever. As we look towards a future where sustainability is increasingly important, businesses can lead the charge and make a real difference - not just for their bottom line but for the world.
Let's start making an impact, one product at a time. 💪🌿💼