Are consumers willing to pay more for sustainable CPG products?
By Joe Lyons-Rising

March 2023

According to a new joint study by NielsenIQ and McKinsey & Company that analyzed sales growth for products that claim to be environmentally and socially responsible dubbed “Consumers care about sustainability—and back it up with their wallets” the answer to that question is: YES!

Eco-friendly packaging options are not new to the CPG (FMCG) industry, however the higher costs associated with sustainable packaging have made the rollout painfully slow. And whether or not you agree, the fact remained that consumers in the past 30 years have not been as motivated to spend more on products that are fully recyclable or compostable.

It still blows my mind that in 2023, where we are trying to move away from single use plastics in CPG, retail tray packed meat is still primarily packaged on non-recyclable Styrofoam. Something QSR burger chains moved away from decades ago, opting for recyclable corrugate.

The positive news for manufacturers and the industry as a whole is that we appear to be beyond the risk/reward tipping point of moving to more sustainable product and packaging options. Even with historically high inflation hitting household grocery bills. 

Commercializing such ESG-friendly products turns out to be not just a value and socially minded goal but a smart business strategy for growth now and in the years to come.

Key highlights from the study:

  • 60 percent of respondents said they’d pay more for a product with sustainable packaging
  • 78 percent of US consumers say that a sustainable lifestyle is important to them
  • Products making ESG-related claims averaged 28 percent cumulative growth over the past five-year period, versus 20 percent for products that made no such claims
  • Environmental, social, and governance-related claims can help boost growth for a variety of brand types
  • Appeal of environmentally and socially responsible products isn’t limited to niche audiences and is making genuine headway with broad swaths of America
  • Brands with more sales from products making environmental, social, and governance-related claims enjoy greater loyalty

Read the full study HERE

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