Sustainability and the Consumer 2018

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Winifred Allen
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1 Citta Del Vino From Millennial-raised Alphas to pro-active Gen X and Boomers, 2018 is the year consumer expectations will demand more brand responsibility. Consumer Insight Sustainability and the Consumer 2018

Analysis Consumer d ema nd for susta ina b le p r od ucts tha t a r e ethica lly-sour ced, g ood for the env ir onment a nd ma d e b y b r a nd s tha t ha v e sha r ed cor e b eliefs ha s nev er b

2 Analysis Consumer d ema nd for susta ina b le p r od ucts tha t a r e ethica lly-sour ced, g ood for the env ir onment a nd ma d e b y b r a nd s tha t ha v e sha r ed cor e b eliefs ha s nev er b een g r ea ter. A Ja nua r y inter na tiona l stud y b y Unilev er found tha t 33% of consumer s a ctiv ely seek out a nd p ur cha se fr om b r a nd s tha t they know to b e socia lly a nd env ir onmenta lly r esp onsib le. And w e know tha t this sentiment is ev olv ing r a p id ly, w ith the " clicktiv ism" of the socia l med ia w or ld of a few yea r s a g o g iv ing w a y to mor e d ir ect, p ositiv e consumer a ction. Cone Communica tions' CS R r ep or t r ev ea led tha t US consumer s a r e now mor e likely to a ctiv ely eng a g e w ith a socia lly-conscious r eta iler thr oug h p ur cha sing (80% ) tha n they a r e to simp ly L ike a comp a ny (6 5% ) or sha r e r eta iler -g ener a ted content socia lly (6 0% ). Millennia ls a r e lea d ing the cha r g e (a ccor d ing to Cone, 85% of US Millennia ls cla im to b uy r esp onsib le p r od ucts w her ev er p ossib le), a s they comb ine a p a ssiona telysha r ed socia l consciousness w ith a ctiv e sp end ing p ow er. B ut the tr end is p r ov ing cr oss-g ener a tiona l, g a ining tr a ction w ith Gen Z, Gen X a nd B oomer s. Mary Norwood

Gen Alpha: kindergarten activists Blinq The futur e consumer of the 2 02 0s onw a r d s w ill ha v e a n outlook sha p ed b y their Millennia l p a r ents a nd a mor e p r og r essiv e, ethica

As cov er ed in our r ep or t Millennia l Pa r ents: R ed efining F a mily Va lues, these p a r ents ha v e a fa r less hier a r chica l a p p r oa ch to the tr a d itiona l fa mily unit, w ith ev er

3 Gen Alpha: kindergarten activists Blinq The futur e consumer of the s onw a r d s w ill ha v e a n outlook sha p ed b y their Millennia l p a r ents a nd a mor e p r og r essiv e, ethica lly-focused ed uca tion. As cov er ed in our r ep or t Millennia l Pa r ents: R ed efining F a mily Va lues, these p a r ents ha v e a fa r less hier a r chica l a p p r oa ch to the tr a d itiona l fa mily unit, w ith ev er yone g etting inv olv ed, fr om w or k to r est a nd p la y, a nd tha t includ es r a ising their child r en to sha r e their str ong ly held v iew s on socia l justice, eq ua lity a nd the env ir onment. Alp ha s a r e mor e likely to ha v e b een exp osed to fr ing e food tr end s flexita r ia nism, fa r m-to-ta b le, clea n ea ting, fer mented food s a nd w ill ha v e a much b r oa d er inter est in ing r ed ient a nd sup p lycha in tr a nsp a r ency. And w hile the Veg a n S ociety cla ims tha t ther e ha s b een a 350% r ise in v eg a nism in the la st ten yea r s, v eg a ns a nd v eg eta r ia ns still r ep r esent a fr a ction of the g lob a l p op ula tion. Gr ow th a r ea s a r e in flexita r ia nism a nd r ed uceta r ia nism, a s concer ns a b out food sa fety, a nima l w elfa r e a nd hea lth d r iv e a d ecline in mea t consump tion. S a les of mea t a lter na tiv es a r e p r ojected to r ise b y 2 5%. Community Kids Accor d ing to the US Ener g y Infor ma tion Ad ministr a tion' s Inter na tiona l Ener g y Outlook r ep or t, ener g y consump tion is estima ted to incr ea se b y 2 8% b etw een a nd , w ith ov er 50% of this g r ow th a ttr ib uted to Asia, includ ing Ind ia a nd China. Na tur a l g a s consump tion incr ea ses a s coa l d eclines, w ith r enew a b les offer ing comp a r a b le g a ins a s d ev elop ing Asia n countr ies tr y to b a la nce commer cia l exp a nsion w ith d ecr ea sing a ir q ua lity in hig h-d ensity ur b a n a r ea s a nd g r ow ing p op ula tions. These fa ctor s w ill ha v e a str ong influence on a r ed istr ib uted p op ula tion, esp ecia lly in Asia, a s young Millennia ls mov e their Alp ha kid s to less p op ula ted r ur a l a r ea s. With schooling tha t encour a g es cr ea tiv ity, entr ep r eneur ship a nd a n emp a thy w ith the na tur a l w or ld, this cohor t w ill fa v our b r a nd s a nd p r od ucts tha t ha v e a d emonstr a b le r ecor d of r ed ucing ca r b on footp r ints, comb a tting commer cia l env ir onmenta l er osion a nd fa v our ing a lter na tiv e ener g y sour ces a nd p a cka g ing ov er existing p olluting ones.

Gen Z: conscious authentics Coca Cola Canvas8 Ha v ing g r ow n up in a d ig ita l-fir st socia l ecosystem, Gen Z ha v e follow ed in the Millennia l w a ke of socia l a nd env ir onmenta l

S up p or ted b y p op ula r food netw or ks like Teen Veg a n Netw or k, a nd YouTub er s a nd b log g er s like Tess B eg g a nd Nina Ga b r iela, these messa g es a r ound ea ting susta ina b ly r

They v a lue tr a nsp a r ency w ith food la b elling a nd ing r ed ients, a nd ha v e a sop histica ted und er sta nd ing of d iet a nd hea lthy ea ting, a nd this holistic, ethica l a p p r oa ch a

4 Gen Z: conscious authentics Coca Cola Canvas8 Ha v ing g r ow n up in a d ig ita l-fir st socia l ecosystem, Gen Z ha v e follow ed in the Millennia l w a ke of socia l a nd env ir onmenta l consciousness, w ith Gen Z celeb r ities a nd influencer s like Ar ia na Gr a nd e a nd Noa h Cyr us setting mea t- a nd cr uelty-fr ee a g end a s tha t a r e hug ely influentia l to this cohor t. S up p or ted b y p op ula r food netw or ks like Teen Veg a n Netw or k, a nd YouTub er s a nd b log g er s like Tess B eg g a nd Nina Ga b r iela, these messa g es a r ound ea ting susta ina b ly r esona te w ith a n a g e g r oup tha t ca n sup p or t or d isa p p r ov e of a b r a nd en ma sse a nd in r ea l time a t a ny g iv en moment. They v a lue tr a nsp a r ency w ith food la b elling a nd ing r ed ients, a nd ha v e a sop histica ted und er sta nd ing of d iet a nd hea lthy ea ting, a nd this holistic, ethica l a p p r oa ch a lso infor ms their w id er w or ld v iew. Accor d ing to The Ma sd a r Gen Z Glob a l S usta ina b ility S ur v ey r elea sed in Nov emb er 2 016, 81% of those sur v eyed sta ted tha t g ov er nment a nd b usiness ha v e a n eq ua l r esp onsib ility for " d ev elop ing clea n technolog y a nd r enew a b le ener g y", w hile 83% a g r ee tha t g ov er nments should listen to them mor e.

5 Millennials: the mass effect F r om tr a v el to inv estment, Millennia ls a r e the key g r oup d r iv ing the d ema nd for susta ina b le g ood s a nd ser v ices. Mor g a n S ta nley' s Aug ust S usta ina b le S ig na ls r ep or t found tha t Millennia ls a r e tw ice a s likely a s the ov er a ll inv estor p op ula tion to inv est in comp a nies a ctiv ely inv olv ed in g ood socia l a nd economic p r a ctices. Supermarket News "GR AT EFU L T O BE 24 AN D O U T OF T HE WORKFORCE T O H O M EST EAD ( W I T H T H E H EL P O F A SU P P O R T I V E P AR T N ER ). GL AD T O H EAR T H ER E' S M O R E O F U S O U T T H ER E." Gabriel Bane Member, Permies.com This consumer a ttitud e is mir r or ed in the w or kp la ce. The Mor g a n S ta nley r ep or t a lso sa ys tha t " Millennia ls w er e thr ee-times mor e likely to ha v e soug ht emp loyment w ith a susta ina b ly-mind ed comp a ny". With Millennia ls ma king up mor e tha n 50% of the w or kfor ce b y , a ccor d ing to Pw C, susta ina b ility is less a b out a n outw a r d fa cing g ener a tiona l g estur e a nd mor e a b out a collectiv e d esir e to d o g ood thr oug hout a ll a sp ects of their liv es a nd p a ssing these b eliefs on to their child r en. As w ith inv esting a nd ca r eer exp ecta tions, this cohor t is a n esp ecia lly socia llyconscious consumer (b eing v er y w a stea d v er se a nd keen on r esa le a nd r ep a ir ), a nd r esp ond fa v our a b ly to ca mp a ig ns fr om b r a nd s tha t r esona te w ith their w or ld v iew a nd a ctiv ely sup p or t sha r ed ca uses. Ev olv ing fr om The Vision Pa r t 1: " Common Gr ound ", w e' r e a lso b eg inning to see a Millennia l mov ement emer g ing fr om the cultur a l fr ing es a nd g a ining tr a ction in the ma instr ea m. " Per mies" a r e p a r t of a g r ow ing p er ma cultur e a nd homestea d ing mov ement w ith or ig ins in the US, w her e the g oa l is to mov e fr om a n ur b a n to a r ur a l lifestyle a s susta ina b ly a s p ossib le. Online communities offer for ums for a d v ice a nd sup p or t on ev er ything fr om or g a nic food p r od uction a nd low -p r essur e ir r ig a tion to tech-b a sed time-sa v ing ha cks a nd zer o-w a ste solutions. A Nov emb er Wa shing ton Post stor y noted tha t a ccor d ing to the la test Census of Ag r icultur e fr om the US Dep a r tment of Ag r icultur e, " 6 9 % of the sur v eyed young fa r mer s ha d colleg e d eg r ees sig nifica ntly hig her tha n the g ener a l p op ula tion. " These sma ll hold ing s, often less tha n 50 a cr es, a r e mor e likely tha n usua l to fa r m or g a nic p r od uce a nd sell to loca l r esta ur a nts a nd fa r mer s ma r kets. We see simila r tr end s in ur b a n p op ula ces, w ith sig ns tha t esta b lished ur b a n sup p ly cha ins a r e b eg inning to g r ow a s susta ina b le communities esta b lish themselv es.

Gen X: pivotal influencers Desp ite b eing la b elled a s cynica l a nd p essimistic, w hen it comes to susta ina b ility Gen X a r e p r ov en to b e mor e a ction tha n ta lk.

This is a g ener a tion r a ised d ur ing hea d line-g r a b b ing ca mp a ig ns a g a inst g r eenhouse g a ses, w ha le hunting a nd fur in the 80s, a nd their op en-mind ed outlook p er mea tes d

6 Gen X: pivotal influencers Desp ite b eing la b elled a s cynica l a nd p essimistic, w hen it comes to susta ina b ility Gen X a r e p r ov en to b e mor e a ction tha n ta lk. A Nov emb er sur v ey b y S er co a nd F utur e Thinking found tha t only 4 9 % of yea r -old s in the UK " r ecycle a ll they ca n", comp a r ed to 70% in the a g e g r oup. This is a g ener a tion r a ised d ur ing hea d line-g r a b b ing ca mp a ig ns a g a inst g r eenhouse g a ses, w ha le hunting a nd fur in the 80s, a nd their op en-mind ed outlook p er mea tes d ow n to their Millennia l kid s. Channel 4 "T HE C ASE FO R A SI NGLE O R GAN I SI N G I DEA T H AT C H AN GES BU SI N ESS FO R GO O D AN D PU T S SU ST AI N ABI LI T Y AT T H E C O R E W O U L D SEEM L I K E C O M M O N SEN SE." Neil Gaught Strategy advisor and author Deter mined to not b e the p a r ents tha t they w er e b r oug ht up b y, Gen X often find themselv es a t the centr e of a multig ener a tiona l home (of w hich nea r ly one-infiv e Amer ica ns w er e in ) a nd ca n exer t a p ow er ful influence in b oth d ir ections. The Jour na l of Ma r keting a nd Ma na g ement p ub lished a stud y in tha t found tha t this cohor t w er e the most ethica l sup er ma r ket shop p er s, la r g ely tha nks to a sp end ing p ow er tha t ca n a ffor d to ma tch their socia lly- a nd env ir onmenta llyconscious outlook. And this ethica llyinfluenced b eha v iour is a lso r eflected in b ig ticket, luxur y a nd fa shion p ur cha ses. "W E AR E A R EV O L T AGAI N ST T H E BO O M ER S, A R EV O L T AGAI N ST T H E R EV O L T, A M AR K ET C O R R EC T I O N, A R EST O R AT I O N N O T O F A P O W ER EL I T E BU T O F A P H I L O SO P H Y." Rich Cohen Writer, Vanity Fair Inhabit

Boomers: agile explorers The or ig ina l eco-w a r r ior s a r e something of a p a r a d ox.

If they b eliev e tha t the solution is their inv ention, then they a lso need to ta ke r esp onsib ility for the p r ob lem. S o w her e d o they sta nd now a s consumer s?

70% or mor e" likely to p a y extr a for susta ina b le p r od ucts.

7 Boomers: agile explorers The or ig ina l eco-w a r r ior s a r e something of a p a r a d ox. Counter cultur a lists in the 6 0s, ind ustr ia lists in the 70s, entr ep r eneur s in the 80s, this p ost-w a r cohor t sow ed the seed s for b oth the mea ns a nd the r ea son for p r otest. If they b eliev e tha t the solution is their inv ention, then they a lso need to ta ke r esp onsib ility for the p r ob lem. S o w her e d o they sta nd now a s consumer s? eshopworld Industry Week Accor d ing to the Ha r tma n Gr oup ' s S usta ina b ility r ep or t, 82 % of B oomer s a r e fa milia r w ith the ter m " susta ina b ility", b ut only 2 6 % a r e " 70% or mor e" likely to p a y extr a for susta ina b le p r od ucts. The r ep or t shed s some lig ht on this low conv er sion r a te 58% of B oomer s ha v e no id ea w hich b r a nd s sup p or t susta ina b le v a lues a nd 4 5% d on' t know w hich p r od ucts meet the cr iter ia. We d o know tha t B oomer s a r e eng a g ed on socia l med ia, how ev er. A Ma y sur v ey b y DMN3 r ev ea led tha t 82 % use F a ceb ook a nd a r e mor e likely (57% ) to follow up socia l med ia content b y v isiting a comp a ny w eb site. S o, the solution her e w ould a p p ea r to b e mor e ta r g eted messa g ing. Discover Corps As a ca se in p oint, B oomer s w ill sp end time r esea r ching for susta ina b le op tions w hen they tr a v el. A sur v ey fr om B outeco found tha t the ov er -4 5s r ep r esented a n a g ile, a ffluent g r oup tha t w hile still insisting on home comfor ts a nd luxur y w ould often ma ke id entifying d estina tions, itiner a r ies a nd hotels a s susta ina b le a p r ior ity. S up p or ting socia l a nd env ir onmenta l initia tiv es r a nked hig hly, a s d id tr ip s tha t b r oug ht them " closer to conser v a tion, w ild life a nd cultur e". Another g r ow th a r ea for a ttr a cting B oomer s is the hyb r id a nd electr ic v ehicle ma r ket. A July sur v ey for Ca r ma x a nd Clea ntechnica r ev ea led tha t 4 1% of hyb r id a nd EV ow ner s in the US a r e a g ed 50+, w ith a n Ap r il AAA stud y sta ting tha t the lev el of consumer inter est in EVs now r iv a ls tha t for p ickup s. B oomer s ha v e a lr ea d y p r ov ed to b e a key ta r g et d emog r a p hic for the e-b ike ma r ket. " Ma ny a r e r etir ed w ith d isp osa b le income a nd they w a nt to keep a ctiv e, tr a v el a nd exp lor e, " sa ys Joshua Hon, found er of Ter n B icycles.

Action points A July 2 017 Ip sos MOR I p oll found tha t nea r ly ha lf of consumer s a g ed 18 a nd ov er (4 8% ) ha v e a p r efer

Travel Alaska CNN Millennia ls in p a r ticula r a r e w illing to p a y a p r emium for p r od ucts tha t come fr om b r a nd s w

This cohor t is a lso set to ov er ta ke B oomer s in ter ms of sp end ing p ow er, a s the p ost-w a r g ener a tion' s w ea lth tr

The fir st w a v e of 16 + Alp ha consumer s w ill come of a g e fr om 2 02 6 onw a r d s, a nd w ill ha v e ev en hig her exp ecta

8 Action points A July Ip sos MOR I p oll found tha t nea r ly ha lf of consumer s a g ed 18 a nd ov er (4 8% ) ha v e a p r efer ence for p ur cha sing fr om ethica l b usinesses. Travel Alaska CNN Millennia ls in p a r ticula r a r e w illing to p a y a p r emium for p r od ucts tha t come fr om b r a nd s w ith a commitment to susta ina b ility, a ccor d ing to Nielson' s Glob a l Cor p or a te S usta ina b ility r ep or t. This cohor t is a lso set to ov er ta ke B oomer s in ter ms of sp end ing p ow er, a s the p ost-w a r g ener a tion' s w ea lth tr a nsfer s to Gen X a nd Millennia l child r en. The fir st w a v e of 16 + Alp ha consumer s w ill come of a g e fr om onw a r d s, a nd w ill ha v e ev en hig her exp ecta tions a b out tr a nsp a r ency a nd r esp onsib ility tha n Millennia ls. Clima te cha ng e, r enew a b le ener g y a nd susta ina b le ma ter ia ls w ill a ll fea tur e hig hly on their a g end a, so esta b lishing a n a uthentic r ela tionship thr oug h sha r ed g oa ls a nd b eliefs now is cr itica l. CNN Medium

Research matrix A thir d of consumer s p r efer susta ina b le b r a nd s Cone Communica tions CS R S tud y 2 017 The r ise in flexita r ia n lifestyles Inter na tiona l Ener g y Outlook 2 017 Ma sd

9 Research matrix A thir d of consumer s p r efer susta ina b le b r a nd s Cone Communica tions CS R S tud y The r ise in flexita r ia n lifestyles Inter na tiona l Ener g y Outlook Ma sd a r Gen Z Glob a l S usta ina b ility S ur v ey Mor g a n S ta nley: S usta ina b le S ig na ls White Pa p er A g r ow ing numb er of young Amer ica ns a r e lea v ing d esk job s to fa r m New p oll show s Millennia ls a r e lea st likely a g e g r oup to r ecycle A r ecor d m Amer ica ns liv e in multig ener a tiona l homes Ethica l p ur cha sing : p r ea ched b y the young, p r a ctised b y the mid d le-a g ed? S usta ina b ility a nd B oomer s: a ll ta lk, no w a lk? The S usta ina b ility Imp er a tiv e: New Insig hts on Consumer Exp ecta tions Ecowatch

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