Gen Z and Millennials will pay more for sustainable products, study says

Data released by Clear Channel UK has shown British consumers are placing greater value than ever on the sustainability claims of food and drink.

Interestingly, it’s older Gen Z and Millennial shoppers leading the charge, with 10% of these demographics saying they’d be willing to pay up to 50% more for sustainable produce, while one in three of 2,000 respondents asked in the OnePoll survey were happy to splash more cash for premium and luxury sustainable food.

Despite potentially having a lower income,10% of 24 to 35-year-olds said they would pay as much as 41-50% more for sustainable products, with 6% of this age bracket responding they’d pay 51-60% more.

Statistics showed consumers are also becoming more selective, as nearly one in 10 of those asked said they’d boycotted their go-to brands in the past year because of sustainability-related concerns, choosing to switch to more environmentally conscious products.

Waste reduction was the main reason consumers believed manufacturers should adopt more sustainable practices, the study showed, followed by ‘being good for the planet’, spreading awareness, enhancing brand reputation, trust, increasing customer loyalty, and gaining competitive advantage.

Key findings included

- 17% of people check labels for sustainability certifications.

- One in five plan to prioritise sustainable brands for future purchases.

- 23% rate brands that practice sustainable approaches.

- 14% claim they are more likely to purchase a sustainable product after repeated exposure to its advertising.

- 44% worry about the future of the planet.

- 25% are doing everything they can to minimise their carbon footprint.

- 1% of 18 to 34-year-olds claimed they would be willing to pay more than 80% towards a sustainable product.

As well as pointing out the positive impact investing more heavily in being sustainable, or shouting louder about existing environmental claims, could have on businesses, the study also demonstrated the barriers food manufacturers face.

Cost is the largest factor, as 62% of those asked pointed to inflated cost as the main reason they’d choose not to buy a sustainable product. Research suggests the need to put trust in a product might outweigh the benefits of shoppers taking a ‘risk’ on a sustainable brand.

Quality was a further consideration for those surveyed. As many as 20% asked said the perceived low quality of some more ethically minded brands puts them off buying. This could be, says Clear Channel, down to the often simplified and understated way some producers and their lines are presented. There’s also a lack of awareness, it recognised, around sustainable brands.

Ben Hope, marketing director at Clear Channel, said, “Our study has shown that while there is a high demand for sustainable products, one in five Brits rarely believe brand sustainability claims and around half only sometimes trust them. The data would suggest brands are not communicating their messaging effectively. We hope that our study will educate brands about sustainability-related expectations and how important it is for retailers to be aligned with consumers and encourage brands to embrace more effective communication strategies.”

It’s clear there is a huge amount of potential to be tapped into, especially around attracting and retaining youngers shoppers within the speciality sector. Data from consumer research platform, Attest, tallies with Clear Channel. CEO and founder, Jeremy King, said, “Gen Z consumers are significantly more likely to pay a premium for environmentally friendly/ethical products.” Attest’s data demonstrated nearly 76% would pay more, versus 59% of shoppers in general. “However, besides trying to buy from environmentally friendly brands, Gen Z under-index for other sustainable behaviours such as recycling and trying to use less single-use plastic.”

These are exciting times for shaking up retail, added Tom Gatehouse, senior strategist at Egg Soldiers. “Consider Gen Z as game changers. They’re fundamentally embracers of the new and the different, so it’s no surprise that brands positioning themselves as game-changing (be it through philosophy, product application, or indeed flavour profile), are finding success.”