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Nielsen Finds That Sustainability Sells In Latest Report

by Rudy Sanchez on 12/20/2018 | 2 Minute Read

The Nielsen Company has released a new study on the impact of sustainability claims on sales.  Titled “What's Sustainability Got to Do With It," the report found that brands with sustainability claims outperform their category in sales growth with an increase in sales over a 12-month period ending in March 2018.

Nielsen concluded that these brands, in particular, outperform their competitors in their category, but that sustainability is also a broad term, encompassing everything from fair trade, lack of artificial ingredients, organic, and recyclable packaging. Furthermore, the study finds that the impact on performance for a particular sustainability claim varies depending on the category.

The study tracked three categories-coffee, chocolate, and bath products, and for each section, Nielsen chose specific sustainability keyword groups to track. For chocolate and coffee, they focused on environmental claims, absent of artificial ingredients, and fair trade. For bath products, they tracked four keyword groups: environmental claims, organic, mineral presence and essential oil presence.

Sustainable chocolate is growing faster than non-sustainable chocolate. Total sales growth for the entire category was 5%, but if it was a sustainable brand, they grew by double digits, with environmental claims rising 22%, the absence of artificial ingredients by 16%, and fair trade by 10%. 

Neilsen also notes that while fair trade sales dollars grew by 10%, units sold grew at the same rate as the aggregate market (3%), concluding that fair trade chocolates sell at a premium.

Coffee with environmental interests saw a massive surge growing 52% by sales volume. Nielsen concluded that consumers are willing to pay a premium for sustainable coffee, with fair trade offerings growing 20% more than the overall category. Unlike chocolate, claims of no artificial ingredients had little impact, with just a 5% increase in sales volume.

The bath products category, similar to the coffee category, saw a 1% contraction in the entire industry, but products with sustainability claims actually grew slightly (1% growth).

Nielsen recommends that brands that are strategically positioned to communicate and connect with consumers over sustainability should take advantage of this growing consumer preference but warns that shoehorning sustainability into an entire portfolio is not necessarily ideal and integrating sustainability should be tailored to individual brands.

One of the most impactful ways a brand can highlight their sustainability practices is through labeling and packaging. Nielsen has found that there is a growing consumer base that’s making purchasing decisions based on their values, and these consumers are willing to pay a premium to support brands that act on the issues they care about.