Two billion consumers worldwide – ‘eco-actives’ are a valuable target group, highly concerned about the environment and 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 than other consumer groups.
But even eco-actives are not immune to the cost-of-living crisis – and for the first time since GfK started measuring eco-actives, we see a decline in the percentage of respective households: -4.6% compared to 2021. As COVID-19 surely accelerated eco-activism, inflation is now causing, what we expect to be a temporary glitch. Even in the worst of scenarios – if the current trend were to continue into the next few years – we predict one in four households in Europe to be eco-active within the next five years. Across the globe, their value could amount up to 1.12 trillion Euro by 2027.Currently, according to our analysis, eco-actives seem to be equally struck by the cost-of-living crisis, struggling to make ends meet. Whereas actions such as recycling, and saving energy and water are practiced widely even
among all consumers, eco-friendly shopping and using eco-friendly energy is primarily done by eco-actives. Hence, it is important to understand their barriers to eco-purchasing.
Barriers to eco-purchasing
More than half of all shoppers are held back by price (or perception thereof). But this is not the only obstacle: eco-actives, in particular, would like to act greener, but do not know how. Product functionality is the third most important barrier for eco-actives, who feel that environmentally friendly alternatives do not work for them. This argument is at its highest level since 2010 and saw the biggest jump since last year. Emphasizing green product superiority and quality is therefore of growing importance to beat green fatigue. In addition, many eco-actives state, that they are held back by the needs and wishes of other family members.
In recent years, sustainability was the fastest growing trend and after a small decline earlier this year – still less than the market average –, we are expecting it to bounce back to growth, based on early indications from the German market. Whereas prior to 2022, eco-options were – at +30% – growing much faster than the category average, this years’ performance is on par with the category average.
Profiting from the sustainability trend are especially (premium) private labels that grew above market average. In Germany, for example, private labels are the winners in all major sustainability product categories, with sales increases (YTD 6/2021 to 6/2022) most prominently in sustainable hygiene products +51.5%, white line vegetable (soy/imitate) +18.5%, and meat/cheese replacers (vegan/veggie) +17.8%.
GER - Sales development YTD June 2022 to YTD June 2021, in %
A closer look at retail channels shows a clear preference by the eco-actives for specialist trade, online and convenience stores. Although hard discounters under-trade with eco-actives, they still spend 20% of their budget there. Given the cost-of-living crisis, upgrading the range of eco-choices represents a sound opportunity for this retail channel.
With inflation rising, price has become a strong influencing factor on shopping behavior, but not the only one: asked about the main trends becoming more influential on their purchasing, shoppers list natural and healthy ingredients, followed by a strong focus on provenance and quality, as well as waste reduction and packaging. Eco-actives are willing to pay premium first and foremost for natural, followed by eco-packaging, eco-production and short transportation. We previously already highlighted the crisis-resistance of natural in our whitepaper “The shock of inflation: FMCG strategies to master shoppers' cuts”
When shopping I choose products…
When it comes to buying sustainable, regional products are most popular and most often bought by 88% of shoppers, followed by recycled, and personal care products with natural ingredients. Less prominent, though still bought at least occasionally by more than half of shoppers, are products that hold the promise of no microplastics or carbon zero. We expect carbon zero to gain grounds, as eco-actives already buy these products quite often. Yet, it requires more education on recognition and understanding: about one in four shoppers has never seen any such products in store.
Love it or hate it!? 61% of shoppers often or occasionally buy plant-based food, but at the same time, the highest number of shoppers dismiss these products completely. Plant-based is a good example for personal health being the primary choice driver for shopping such products. Good for the environment and animal welfare still rank second and third, but with a considerable gap of more than 25%. Hence, the notion of “good for me, good for the planet” should be kept in mind when communicating product benefits.
When it comes to sustainability, A-brands are currently losing against (premium) private labels – and not just because of price. Particularly in difficult economic times, it is extremely important to keep brand investment up, in order to keep private label growth at bay.Over the years, we have identified recurring patterns and learnings, which are extremely important for brands: What consumers think of A-brands in a category, has a strong effect on the respective private label share. If their brand trust is high, they perceive good value for money, innovation and advertising, the share of private labels tends to be 25% lower than in categories with less premium brand investment. Also, penetration remains key: once lost to private labels, consumers are not very likely to come back to A-brands1.Today, simple functionality is not the key driver of brand choice anymore. Brand identities that resonate with consumers, have to offer a credible balance of emotionalization and responsibility – the latter, however, not in the sense of restricting oneself, but with a positive, enabling connotation.
We are currently seeing the emergence of a new, especially younger group of consumers with a new sense of sustainability. Section 7 is dedicated to these “Glamourous Greens”.
1 - Europanel Global Private Label study; BG20 30 countries, 100 categories and 11500 brands, 2015 to 2019; BG 20 3800 brands 563 categories AT BE DK FR ES SE UK 2008 -2018
Sustainable brands that are performing extremely well with eco-actives include, for example, THE FLOWER FARM from the Netherlands, and DANKE in Germany.
So, what is their secret? The focus on one key message and eco-benefit
THE FLOWER FARM offers 100% vegetable margarine without preservatives and with only natural ingredients. Palm-oil free is the simple, yet strong message that clearly communicates the one contribution that shoppers are making, also boldly stated on the packaging. THE FLOWER FARM is especially popular among younger buyers, achieving a higher than average spend per buyer.
DANKE (German for Thank you) offers sustainable hygiene products – toilet paper, kitchen towels and paper tissues – produced from recycled material, thus contributing to the reduction of CO2 – the very claim and choice driver: “Your small contribution”. The success speaks for itself: In a category, that traditionally under-trades with eco-actives by 10%, DANKE is adding +9% of exclusive eco-active buyers to the category as a whole.
