Companies are constantly seeking ways to distinguish themselves in the marketplace. Increasingly, brands are using sustainability as a key value proposition to strengthen corporate reputations and customer relationships. Part of this shift is due to growing consumer demand for sustainably sourced products and packaging, as well as overall transparency relative to corporate environmental practices. Offering sustainability information (e.g., recycling info, made from deforestation-free sources) on product labels is becoming an emerging priority for companies, as it assures customers that their brand of choice is complying with their environmental standards. Furthermore, increased labeling means that companies will need to dig deeper into their global supply chains to ensure social, environmental and legal compliance. According to a recent survey by Asia Pulp & Paper (APP), nearly two-thirds of Americans (60%) want sustainability / environmental-related information on product labels. The paper and packaging and food industries ranked as the top choices for where consumers want to see sustainability information on product labels.
The findings yielded from this research afford businesses important insights on shifting consumer preferences and how brands should adjust sustainability efforts accordingly. Below are three important consumer insights that businesses should implement for ongoing and future strategic planning efforts, particularly within the context of customer purchasing decisions. Labels influence consumer purchasing decisions Labels are now becoming a staple for consumers at point of purchase, and if companies want to keep up with their customers, they will need to make sustainability information on labels a top priority for the business. According to APP research, more than 80% of Americans have checked for sustainability / environmental information on labels when making a purchase. In fact, the survey also revealed that more than half of Americans (51%) are more likely to recommend a brand or product if it includes sustainability information on labels. Similar research conducted by Nielsen underscores the importance of how purchasing decisions are influenced by sustainability practices. “Fifty-five percent of global online consumers across 60 countries say they are willing to pay more for products and services provided by companies that are committed to positive social and environmental impact.” The growing proportion of Americans prioritizing sustainability as a key factor in purchasing decisions, as well as how this influences perceptions of brands, signals a broader preference for sustainability in the marketplace. Make it clear Consumers today insist that companies provide clearer sustainability-related labeling on their products. According to the survey, four in 10 Americans believe sustainability information on product labels is confusing and needs to be simplified. There have been recent debates around mandatory labeling for genetically engineered foods, as well as for clearer recycling labels and instructions on products – all to better inform the consumer. Recyclable packaging in particular is, after all, only as good as a user’s understanding of how to recycle it. Labels must provide easy-to-understand information about how to manage various packaging components at the end of the product’s life. There are many initiatives underway to reform recycling information on labeling, such as the How2recycle label, a nationwide labeling initiative to reduce confusion and misinformation about recycling by creating universal on-package labeling, and there are hopes for many more to follow. Representing the entire supply chain Businesses that understand the importance of environmental stewardship and clearly communicate this information to the public will go a long way to foster trust and brand credibility. Currently, only one-third of Americans think environmental and sustainability related information provided on labels is trustworthy and accurate according to APP research. Therefore, companies need to look deep into their supply chains to evaluate how their current practices stack up against what consumers want. Aside from implementing sustainability throughout the supply chain, companies need to more closely monitor their business on all levels, from suppliers to manufacturers, to ensure that sustainability is prioritized and accounted for sufficiently. This will not only benefit the consumer and the business, but the health of the environment as well. Long-term changes ahead While listing sustainability information on product labels is only one element of the overarching shift in consumer attitudes toward greater preferences for environmentally friendly products, the need for business to address these requests are vital for their long-term success. Over the next few years, there will likely be a transformation in product labels, so in order to keep up with the trend, make sure your business keeps up with the demand.