Sustainability and Consumer Insights: What CPG Brands Need to Know

78% of consumers consider sustainability as a major purchase factor, which means CPG brands have to go beyond just producing high-quality goods and demonstrate that they are actually doing good. 

 But what exactly are consumers looking for from CPG brands regarding sustainability? In this blog, you will explore top consumer insights and trends that will help you create an actionable, effective sustainability strategy.  

The Rising Demand for Sustainability 

Let's dive into market trends that highlight consumer's preference for sustainable products: 

What products consumers are seeking, and what products they are avoiding: 

1. 62% of consumers actively seek out goods produced by sustainable brands.
2. Conversely, 84% of consumers reported they would avoid a brand altogether if they discovered unsustainable practices within the company.

What consumers are willing to pay for sustainable products: 

1. 66% of consumers stated they are willing to pay more for sustainable products
2. On a global scale, people are willing to pay an average of 24% more for sustainable products.  
   

What consumers expect from brands regarding sustainability: 
 

Consumers want brand transparency in their sustainability efforts, from sourcing and manufacturing to packaging and distribution. Here are a few of the top expectations consumers have for brands when it comes to sustainability:  

1. Anti-Greenwashing: Actions speak louder than words. Saying your product is green isn't enough; consumers want tangible evidence that brands are backing up their claims. 52% of consumers claim they have experienced false or misleading information about sustainable actions from brands, which negatively impacts the brand's reputation.
2. Minimalistic Packaging: Excessive packing is not only more costly to produce but also gives consumers a negative perception of your brand. 64% of consumers want brands to reduce packaging and use recycled or biodegradable packaging to minimize waste.
3. Ethical sourcing: 9 out of 10 global consumers said they would choose to buy from companies with ethical sourcing over companies that did not prioritize proper sourcing practices. 
4. Conscious of Their Carbon Footprint:  Consumers are concerned about climate change and want brands to take the necessary steps to reduce their carbon footprint. 45% of buyers said they would stop buying from brands that do not track carbon emissions and actively try to minimize their carbon footprint.
5. Giving Back to the Community: 53% of consumers shared they are driven to brands with community commitment. Brands that engage with the community to support the social causes they care about can strengthen their relationships with consumers because it is more evident that their efforts are not performative.  

Gathering Consumer Insights 

While the consumer insights mentioned above come from the broader market, it is essential to have a deeper understanding of your target audience's specific preferences.  

Collecting data from your core demographic and assessing those insights is essential to validate your audience's wants and needs. While there are a variety of data collection methods, they can be bucketed into three main categories: 

Direct Data Collection: 

1. Surveys and Questionnaires: These versatile tools allow you to design surveys with multiple-choice questions, open-ended questions, and rating scales. Distribute them online, in-store, or via email to gain insights into preferences.
2. Focus Groups and Interviews: Conduct in-depth discussions with small groups of consumers to explore qualitative preferences. 

 Online Data Collection: 

1. Website Analytics: Track user behavior on your website to understand which pages are most viewed, how long people stay on product pages, and what links they click, to reveal implicit preferences and areas of interest.
2. Social Media Listening: Monitor conversations to gauge consumer sentiment about your brand, competitors, and sustainability issues. Use social listening tools and innovative green technologies to identify trends.
3. Online Reviews and Ratings: Analyze customer reviews on your website, retail platforms, and social media for valuable insights into preferences, pain points, and areas for improvement. 

Transactional Data Analysis: 

1. Purchase History: Analyze customer purchase data to identify frequently bought products, demographic preferences, and changes in purchasing habits over time.
2. Loyalty Programs: To understand customer motivations and explore purchase history, redemption patterns, and reward preferences from loyalty programs. 

Benefits of using AI for sustainability insights: 

1. Uncover Hidden Trends: AI sustainability tech can identify subtle patterns and correlations in consumer data that humans might miss, revealing hidden trends and opportunities.
2. Faster Analysis: AI sustainability solutions can process massive datasets much faster than traditional methods, allowing for quicker identification of emerging trends and faster response times.
3. Data-driven decision-making: AI green technology provides objective insights based on real-world consumer behavior, leading to more informed and data-driven decisions. 

Applying Insights to Product Development 

To make faster, better decisions – you can leverage the power of AI in various ways. Now, let's examine how you can use consumer insights and sustainable technology to inform the development of your product offering.  

Advanced-Data Processing: 

1. Natural Language Processing (NLP): AI with NLP capabilities can analyze unstructured data like social media posts, reviews, and surveys to identify sentiment towards sustainable practices and preferred sustainability initiatives.
2. Machine Learning (ML) algorithms can sift through large datasets of purchase history, website analytics, and loyalty program data. By recognizing patterns in consumers preferred product choices, brands, and pricing – you can shape your product's go-to-market strategy. 

Identifying Consumer Segments 

1. Clustering Algorithms: Clustering algorithms allow you to group consumers based on their sustainability preferences to customize messaging and product offerings for specific demographics with common concerns.
2. Predictive Analytics: Advanced AI models can predict future trends in consumer behavior related to sustainability, enabling you to proactively develop products and marketing strategies that align with evolving preferences. 

Actionable Insights: 

1. Automated Reporting: AI can generate automated reports summarizing key findings from consumer data analysis, providing clear and actionable insights for your product development teams, marketing departments, and sustainability initiatives.
2. Real-time Feedback Analysis: AI systems can monitor brand mentions and social media conversations in real time for immediate adjustments to marketing strategies or product features based on consumer feedback. 

Successful Sustainability Initiatives:

Beverage Companies Using Biodegradable Plastic Rings 
 
Saltwater Brewery is a Florida-based brewery that is available in major retailers, including Publix, Total Wine, Whole Foods, and ABC Fine Wine and Spirits.  
 
Florida is among the top five most environmentally friendly states, so it's no surprise that its consumers are more inclined toward sustainable brands.
 
You could probably guess, based on their name "Saltwater" and the fact that they are located in Delray Beach, that the company is passionate about not only beer but the ocean.  
 
Like many others in the state, the founding members grew up as boaters, surfers, and fishermen and saw the pollution challenges firsthand.
 
The traditional plastic rings on a six-pack of beer kill as many as 100,000 marine animals a year, leading the Saltwater team to create a better six-pack using one of their key in-house ingredients: grain. They are also reducing waste from the grain by recycling it into biodegradable six-pack rings that fully disintegrate in 120 days and are significantly less harmful to marine life.  
 
Major brewers, such as Corona and Guinness, have expressed interest in the biodegradable rings. A testament to consumer sustainability preferences is that the first batch of Guinness beer with biodegradable rings sold out in record time. 

Marketing Sustainable Practices 

As mentioned, consumer insights show buyers want brands to avoid greenwashing.  

This is specifically true for the Gen Z demographic, which makes up more than 40% of the world's consumer population.  

Gen Z is hyperconscious about inauthentic marketing, especially when it comes to greenwashing and sustainability initiatives. Nasdaq reported that nearly a third of Gen Z has canceled a brand over a recent marketing campaign, ad, or brand affiliation that doesn't align with their values.  

In a competitive market with a skeptical audience, it has become increasingly important to convey sustainability efforts effectively and transparently. Here are a few marketing strategies for effectively communicating your sustainability efforts to resonate with your target audience: 

Focus on Tangible Benefits 

Highlight proven, quantifiable benefits from your product features, packaging, and impact on the environment and consumers' lives. Demonstrate how much plastic you saved with your packaging, the amount of renewable energy saved in production, or how your product helps consumers save water or electricity usage.  

Be Clear and Transparent 

Steer clear of greenwashing using clear, genuine language to explain your sustainability practices. You have to find a middle ground to avoid being too high-level with fluff or too in the weeds with technical jargon. Make sure your messaging is concise, and if you want your audience to learn more, you can add a QR code or URL that links to more details.  

Develop Engaging Content and Campaigns 

Share the reasons, the value, and the story behind your sustainable practices. Paint the picture of how your products are being sourced, manufactured, packaged, and distributed with an environmental responsibility. Establish partnerships with environmental organizations with the same goals and brands or influencers with the same values.  

Continuously Build Trust and Show Accountability 

Showcase your efforts by publishing reports regularly that outline your sustainability goals and track your progress, developing programs that incentivize customers with rewards to participate alongside your sustainable efforts, and fostering community building to connect your audience to your brand's mission.  

Remember, authenticity and transparency are critical for effective brand sustainability marketing. Following these strategies, CPG brands can effectively connect with eco-conscious consumers and build trust in a competitive market.  

Enhancing Brand Loyalty 

Building trust with your audience is essential for the longevity of your brand's success. 81% of consumers need to trust a brand before they consider buying. Consumers feel confident supporting brands that care about the bigger picture and act responsibly. 

Companaes prioritizing sustainability can cultivate more in-depth relationships with their customers through establishing trust, shared values, and a mutual desire to make a positive impact.  

Connecting on a deeper emotional level can increase customer loyalty and willingness to recommend the brand to others. You can build trust through consistent actions demonstrating your commitment to social responsibility.  

Here are a few ways you can stay accountable, keep your audience engaged, and increase brand loyalty: 

1. Sustainability Programs: encourage consumers to recycle through incentives like discounts or credit. 
2. Eco-friendly packaging: choose to use minimalistic packaging or biodegradable or recycled materials. 
3. Consistent Communication and Awareness: routinely share updates on your brand's sustainability initiatives, educate your audience, and share the impact of these efforts.  

Measuring Impact 

But how do you know that your sustainability efforts are paying off? Track these essential metrics to assess the effectiveness of your sustainability efforts. 

Here are five key performance indicators (KPIs) that can help you measure the success of your sustainability strategy: 

1. Carbon Footprint Reduction: Tracking the reduction in greenhouse gas emissions.
2. Resource Efficiency: Measuring energy or water consumption and efficiency improvements.
3. Waste Reduction: Monitoring waste generation and diversion from landfills.
4. Supply Chain Transparency: Assessing the sustainability practices of suppliers.
5. Social Impact: Evaluating positive social outcomes of the community or environment and sharing the results. 

Tracking these KPIs will help identify inefficiencies in your sustainability practices to maximize results. You can leverage green technology to measure your sustainability efforts in real-time for quick adjustments.  

Another way to improve your sustainability efforts is to actively seek consumers' opinions.  

Through customer feedback, companies can identify areas for improvement and make adjustments that can lead to enhanced results. Incorporating this feedback also makes customers feel more involved with your initiatives, strengthening their connection with your brand.  

Conclusion 

The consumer landscape has evolved, and brands that do not prioritize sustainability efforts will lose out to their competitors that do. Since sustainability is a driving force in consumers' purchasing decisions, it presents organizations with the opportunity to build trust, loyalty, and emotional connections with their audience on a deeper level.  

On an ongoing basis, you should analyze consumer insights to see where you can align your brand values with your target audience's values.  

Here are a few additional resources that will help you do that: 

1. Empowering CPG professionals to innovate faster and reduce waste with AI 
2. Game of Attention: AI, Sustainability Tech, and the Future of Marketing
3. Dragonfly AI's Consumer Insights