None of this is surprising. COVID-19 has accelerated the trends we saw in its lead-up: the decline of retail, the growth of direct-to-consumer channels, wellness as a movement and values-driven consumerism. That sustainability will be a foundation of the economy that comes out of this pandemic is a reaffirmation of what Gen-Z has already told us.
The Gen-Z generation is already aging into the workforce and becoming the largest consumer group. Studies show that millennials will spend more for sustainable products, but Gen-Z is willing to pay an even higher premium. They’re also more likely to boycott and “cancel” brands that aren’t moving toward sustainability fast enough. And they process digital media faster than ever before which has, over time, honed their BS detectors.
Beyond consumer sentiment, sustainability is proving itself as one of the most reliable brand differentiators. A recent New York University Stern Center for Sustainable Business study found that since 2013, sustainable products grew 5.6 times faster than conventionally marketed products, and 3.3 times faster than the CPG market as a whole.
For brands to survive and compete, sustainability can no longer be an afterthought. Here’s how brands are beginning to embrace sustainability:
Starting with low-hanging fruit
As first steps to sustainability, we’re seeing brands improve packaging recycling, create emissions offsets and partner with nonprofits–finding ROI when these efforts are paired with smart marketing tactics. This means taking the consumer on the path with them, creating educational messaging to have a more positive impact.
Credo, the clean beauty retailer, for example, has created a packaging recycling program with TerraCycle that gives consumers loyalty points for returning empty beauty products—even non-Credo products–turning a competitor’s customers into their own loyalty members. For brands looking for those “easy wins,” SMAKK’s Mission Plan pairs these types of tactics with marketing strategies, and the Slow Factory Foundation offers a primer on sustainable literacy as well as a sustainability crash course.
Creating circular product experiences
Recycling is broken and single-use packaging is a massive problem. Circular product experiences are moving to fill the gap with countless new challenger brands rising up to disrupt the CPG marketplace and reduce waste.
Brands including Bite, by Humankind and Clean Cult use innovative refill programs to convert one-time purchases to subscription models. A refill model turns a single purchase into a repeat with very little friction, often passing savings on to the consumer. In the case of the whole-food supplements brand STAMBA, the durability and design of the packaging adds to shelf presence in retail, while the refill program brings the consumer data into the brand’s digital ecosystem.
Turning trash into a cult object
Nonprofits like 4 Ocean and Parley are using products created from the problems they are trying to solve to shine a light on the issues themselves. In the case of Parley’s collaboration with Adidas, the covet-worthy shoes made from ocean plastic becomes a tool to spread awareness, with consumers retelling the story of their purchase. Other brands like Everlane, Girlfriend Collective and Rothy’s have developed campaigns that highlight recycled materials in their products to quantify the impact of their purchase for shoppers.
Going beyond zero
The most ambitious companies are going beyond carbon neutral to truly offer reparative solutions. Microsoft has set aggressive emissions reductions goals including going carbon negative by 2030. By 2050, its goal is to remove all the carbon the company has emitted since it was founded in 1975.
As awareness in understanding businesses’ historical impacts grows, simply making incremental changes to reduce emissions or add recycled content to new packaging won’t be enough. Brands that have invested billions in their shelf presence will have to think about the inadvertent consumer touchpoints their trash is creating and invest there as well. It’s likely we’ll see more pressure for legacy brands to step up.
Coming out of Covid-19, we now have an opportunity to rebuild a better economy where the bottom line includes sustainability. As Greta said, “The world is waking up and change is coming, whether you like it or not.”