Financial Constraints Are Blunting Consumers’ Sustainability Efforts

October 21, 2022

This article is included in these additional categories:

Brand-Related | CPG & FMCG | CSR & Environmental | Customer-Centric | Industries | Spending Trends

Inflation is now causing financial hardship for a majority of Americans, per recent Gallup research, and people the world over are feeling the effects of financial constraints. These are causing many to find it more difficult to act sustainably, and the number of shoppers who are highly concerned about the environment has declined, according to Kantar’s 4th annual “Who Cares? Who Does?” report.

The study, which bases its findings on a survey of almost 100,000 respondents across 24 countries, finds that 45% agree to some extent with the statement: “I have found it harder to act sustainably recently due to social or financial constraints.” That’s 3 times the share (15%) who disagreed with the statement.

Indeed, environmental issues have fallen down the list of priorities in most countries. In analyzing 10 markets, war emerged as the top concern in 8, with the COVID pandemic the leader in the other 2. The economy in general was a top-3 concern in 8 markets, while inflation was a top-3 concern in 5. By comparison, climate & environmental issues appeared within the top 3 in just 3 of those 10 markets.

Within this context, Kantar finds a decline in the percentage of shoppers deemed “Eco Actives,” the most sustainable shoppers. These are defined as “shoppers who are highly concerned about the environment, and are making the most of actions to reduce their waste. They feel an intrinsic responsibility to be more sustainable, follow the topic more actively and have a greater awareness.”

This year this group has dropped to 18% of shoppers, down from 22% in each of the past 2 years.

In their stead have risen “Eco Dismissers,” who have “little or not interest in the environment” and who are “making no steps to reduce waste.” This group now accounts for 44% share of shoppers, up from 37% in each of the past 2 years.

The remaining 38% are “Eco Considerers,” who are worried about the environment but not taking actions to reduce their waste. Kantar notes that these shoppers’ biggest obstacles are convenience and price.

Pricing is indeed a consideration. In a recent analysis, IRI and NYU Stern found that the average price premium for sustainability-marketed CPG products relative to conventionally marketed products stands at 27.6%. While it’s true that this gap has narrowed in recent years, cost continues to be the top barrier preventing Americans from buying more sustainable products.

The other barrier is skepticism around brands’ claims, and Kantar’s research shows that this is prevalent around the world. Some 53% of respondents agree with the statement: “All companies only care about profits and eco-claims are just another marketing tool.”

Despite this, Kantar forecasts growth in the number of Eco-Actives in the years to come. A pessimistic forecast sees Eco-Actives’ share of the population rising back only to last year’s levels (22%) by 2027, while an optimistic forecast projects this group rising all the way to 38% share of the population.

Time, and perhaps the global economy, will tell.

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