Given the economic uncertainty over the past few years, you might think that the customer has reverted to making purchase decisions based on affordability, and little else.
That may have been true at the height of the COVID-19 pandemic. But that is not the priority now–and not as the customer emerges from pandemic life.
In fact, various studies show the customer is doubling down on a commitment to helping advance sustainability. And she wants to see real action from companies on environmental issues.
One study, Ernst & Young’s Future Consumer Index, tracks how consumers want to live their lives once the pandemic is over. And its most recent eighth edition shows they now care more about the future of the planet than they do about affordability and even their own health.
“There has been a compelling shift from a focus on ‘my health, my wallet’ to a focus on ‘me and my planet,’” says Kristina Rogers, EY’s global consumer leader.
The index found 26% of respondents rated the planet as their top concern, up from 16% the year prior, in October 2020. The planet led affordability at 25% (down from 32%) and personal health at 18%.
Consumers’ purchasing power
This shift in mindset will have a major impact on consumer behaviour, purchase decisions and brand preferences.
“Most people are reshaping their consumption habits,” says Rogers. “Some want to do more to preserve the planet; others want to buy less, but better quality. Understanding what’s driving customers’ purchase behaviour could require a radical response [from some companies],” says Rogers.
Lisa Hutcheson, managing partner at consulting firm JC Williams Group, says c-stores need to listen, and strive to make even small changes that will benefit their business.
“Consumer awareness – and their willingness to change loyalty based on sustainability – is here to stay,” she says. “And yet, retailers still seem to think that the brand is more important than if something is sustainable. But consumers are much more aware and savvier to buy into just a brand.” (And at least one major legacy product sold at c-stores is making sustainability core to its brand identity and consumer messaging—see below.)
This awareness is growing globally, says Hutcheson, and many retailers are responding by empowering shoppers.
She points to Danish grocery chain Coop, which launched a feature on its app that allows customers to get an overview of their CO2 footprint based on their shopping receipt. Customers see the products and brands they bought that had the smallest footprint—and the largest. (The analysis is based on factors like production, processing, transportation and food waste.)
“The demand for transparency is ever-increasing, and so this is an idea c-store operators should think about,” says Hutcheson. “The reason I say that is the cost to develop an app isn’t as cost prohibitive as it used to be. And so, giving customers a platform of transparency becomes very viable even if you own a few stores.”
Sustainability is a growing concern for consumers of confectionery products, according to research conducted by Savanta, on behalf of Cargill.
A survey of 7,000 consumers across 10 European countries revealed:
· 70% of consumers factor sustainability into their food and beverage purchase decisions–higher still amongst younger consumers
· 74% of high frequency chocolate purchasers prefer sustainable products.
· 56% of younger consumers bought more chocolate with sustainable cocoa than regular cocoa
According to Niels Boetje, managing director cocoa at Cargill, “Our research suggests that increasingly, consumers look for… concrete claims and compelling stories that connect the products they purchase with tangible progress on critical issues like child protection and deforestation elimination.”
Cargill is paying particular attention to consumers in the 18 to 35 demographic where “just over half of these Gen Z and millennial shoppers (reported) a corresponding uptick in sustainable product purchases.”
Committing to sustainability has the further advantage of delivering higher margins. More than two-thirds of consumers surveyed indicated “they would pay more for a chocolate product made with sustainable cocoa.”
- Coca-Cola Company: Recently unveiled its first-ever beverage bottle made from 100% plant-based plastic, excluding the cap and label, which was made using technologies that are ready for commercial scale.
- PepsiCo: 100% of its packaging is to be recyclable, compostable, biodegradable, or reusable by 2025.
- Mars: 100% of its plastic packaging is to be reusable, recyclable or compostable by 2025, plus the company is promising a 25% reduction in virgin plastic use.
- Hershey: 100% of its plastic packaging to be reusable, recyclable or compostable by 2030.
- Mondelēz International: Committed to making all packaging recyclable by 2025. In addition, the company has committed to a 2050 net zero emissions target across its full value chain.
Making an Impact!
Does your company have a sustainability initiative that you want to celebrate? Great news!
Convenience Store News Canada is thrilled to launch the CSNC Impact Awards, which recognizes initiatives introduced by retailers, suppliers and solution providers that are making a meaningful difference, from helping the planet to supporting employees and communities.
The goal is to celebrate companies—large or small—making a positive impact across four key areas:
· Sustainability (initiatives around food waste, ethical sourcing, energy efficiency etc.)
· Diversity, Equity & Inclusion
· Supporting Employees
· Community Service/Local Impact/Giving Back
There is no fee to nominate (you can even nominate in multiple categories), and honourees will be featured in Convenience Store News Canada in November. Tell the industry about the amazing work being done at your company!
Deadline to enter is August 26.
Originally published in the May/June 2022 issue of Convenience Store News Canada.