Sustainability Having a Bigger Impact On Consumer Buying Decisions

Sustainability has been a hot topic throughout 2022, and new research shows the growing impact the issue is having in the minds of consumers as they shop for new products.

New research from IRI and the NYU Stern Center for Sustainable Business (CSB) show that 93% consumers have maintained or increased their sustainable purchase habits during the past year. Additionally, 77% of consumers believe sustainability is important when selecting products to buy, up 8% from 2021 research. 

Of note for retailers, 27% of all shoppers–and 32% of Gen Z and Millennials–seek out retailers that carry sustainable products, indicating a shopper preference that is expected to continue and increase over time, IRI and NYU said.

“Because our research with CSB shows a growth of sales and interest for sustainable products year-over-year, it’s no surprise that we’ve seen successful new product launches incorporating sustainable benefits increasingly since 2017,” said Joan Driggs, vice president, Content and Thought Leadership, IRI. “Our new research finds that Gen Z and Millennials are noticing this increase and are more likely to try these new products than older generations.”

On the product side, while sustainable items represent only 17% of total CPG sales, they drove one-third of all CPG growth in the past year. The study revealed that sustainability-marketed products grow 2.7-times faster in their categories than conventionally marketed products. 

In 2021, the IRI/NYU study found that about 50% of all new products were sustainable, up 20% from 2017. Sustainability-marketed products can also command price premiums over their conventional counterparts that can range from 8% to 130%.

“Challenges such as supply chain disruptions and inflation have made it difficult for brands and manufacturers to identify which shopping behaviors are real trends, and which are a temporary response to market conditions,” said Randi Kronthal-Sacco, senior scholar, NYU Stern Center for Sustainable Business. “Each year, our research with IRI shows increasing interest in sustainability-marketed CPG products, showing that sustainability has become a lasting priority for consumers.