Ethical Living - Mindful Consumerism

ETHICAL LIVING: MINDFUL CONSUMERISM
December 2017
INTRODUCTION
WHO IS THE ETHICAL CONSUMER?
WHAT ARE ETHICAL CONSUMERS BUYING?
DRIVERS OF MINDFUL CONSUMPTION
CONCLUSION
INTRODUCTION
Megatrend analysis at Euromonitor International
 Euromonitor International’s team of economic, consumer and industry Disclaimer

trend experts have identified 20 megatrends shaping consumer markets. Much of the information in this
briefing is of a statistical nature and,
The research team has further predicted the eight most influential while every attempt has been made
megatrends to watch for 2017. These megatrends, sharing common to ensure accuracy and reliability,
Euromonitor International cannot be
drivers, have the power to transform and disrupt entire categories. held responsible for omissions or
errors.
 Our megatrend analysis provides a framework for all Euromonitor Figures in tables and analyses are
analysis and enables us to better identify new emerging trends, while also calculated from unrounded data and
may not sum. Analyses found in the
monitoring the more established long-term megatrends shaping the world. briefings may not totally reflect the
With access to tens of millions of data points, we are uniquely positioned companies’ opinions, reader
discretion is advised.
to provide a holistic approach to megatrend analysis.
Increasing awareness around
ethical and environmental
issues is driving the rise in
mindful consumption. Although
interest in ethical living is higher
in emerging markets, it is still
developed economies that lead
the commercialisation of
sustainability and have high
value ethical labels markets.
Recycling is by far the biggest
selling ethical claim with
increasing focus on waste
recovery. The new frontier of
ethical consumption is
integrating into all aspects of
consumers’ lifestyles.
© Euromonitor International MEGATRENDS: ETHICAL LIVING: MINDFUL CONSUMERISM PASSPORT 3

INTRODUCTION
Megatrend framework
 Euromonitor International’s team of economic,

consumer, and industry trend experts have
identified 20 megatrends shaping consumer
markets. The research team has further predicted
the eight most influential megatrends to watch for in
years to come. These megatrends, sharing
common drivers, have the power to transform and
disrupt entire categories.
 Our launch of a megatrends framework and
subsequent megatrend report series, provide
thought leadership on the trends with the strongest
influence on the world of tomorrow. In a rapidly
changing global environment, megatrend analysis is
critical for companies seeking to drive sustainable
growth and remain relevant as competition
increases and new ideas disrupt entire industries.
 A megatrends framework enables us to better
identify new emerging trends, while also monitoring
the more established long-term megatrends
shaping the world. With our access to tens of
millions of data points, we are uniquely positioned
to provide a holistic approach to megatrends
analysis.

INTRODUCTION
Ethical Living is one of the eight key megatrends
 Consumers and business continue to

pay attention to ethics and moral values.
This translates into decisions framed by
concerns about the environment,
sustainability, animal welfare, production
and labour practices, as well as desires
to positively impact communities and
people.
 Driven primarily by environmental shifts
and pressures, population change and
changing consumer values, enriched by
opportunities emerging due to
technological advances and shifting
economic power, we are seeing the
“ethicalisation” of society.
 Mindful consumption is emerging,
replacing the conspicuous consumption
of the past. This forces businesses to
adapt to new market demand. However,
the pace of the change is slow.
 Ethical will slowly become integrated
into the mainstream.

INTRODUCTION
Ethical consumer: key findings
Environmentally The movement is more progressive in emerging markets where a higher than global
conscious mind-set average ratio of consumers seek out ways to make positive decisions about what they
buy and look for a solution to the negative impact consumerism is having on the world
Developed markets There is a conundrum of high interest in mindful consumption in emerging markets but
spend more on strong value sales of mainstream ethical labels in developed economies. This is due to
ethical labels the fact that in emerging markets, many local products inherently carry environmental
characteristics but are not commercialised as ethical label
Recycling label is In retail value terms, over 70% of sales of ethically labelled food and beverages carry a
most common and recycling label. However, recycling is not only the most common ethical label. It is also
most trusted the most trusted among green labels, however, recyclability of packaging is not an
worldwide influential purchasing factor, more of a post-purchase consideration
“All natural” and “All natural” and “Clean label” claims, such as “Hormone free”, “Non-GMO” and “No
“Clean label” artificial” stem from concerns around wellbeing and are important contributors not only
resonate with to ethical but also healthy living trends. The importance of these concerns varies
consumers country by country and is more pronounced in nutrition
Demand for eco/ While there is increasing maturity in the eco/ethical space for products with the myriad
sustainable of similarly positioned offerings on all “ethical” platforms, eco services is still a relatively
services lower than novel concept. Business models focusing on services with strong ethical credentials still
for products enjoy a period of low competition
Three As drive Awareness, availability and affordability drive consumers’ interest in ethical living.
responsible However, consumers still rank features such as efficacy and value as the main driving
consumption force behind their purchases

INTRODUCTION
Greening society
 “Ethicalisation” (or often interchangeably called

“greening”) is expected to accelerate.
 At national and international level, the
regulatory environment is tightening up. Regulation
 NGOs have long exerted pressure on law
makers and companies, but now their
strategies are becoming more sophisticated
and effective.
 Companies are also taking environmental
concerns more seriously. Furthermore, green
strategies are no longer just the preserve of People Ethical NGO
niche companies with a specialist power Living pressure
environmentalist positioning. Mainstream
players are also greening up their act.
 Among consumers, green issues are no longer
a niche area only of interest to a specific
demographic: they are issues that affect and
influence all of us, the young and the old, men
and women, rich and poor, from the developed Corporate
change
and developing worlds.
 The idea that “environmentalism” as an isolate
concept is outdated.

INTRODUCTION
Everyone is going “green”?
 In 2017, Euromonitor International Global Consumer Trends Survey asked consumers around the world
about their values, purchasing habits and attitudes to environmental issues, and found that:
65% 61% 26%

OF RESPONDENTS OF RESPONDENTS OF RESPONDENTS
STATED THAT THEY TRY STATED THAT THEY ARE STATED THAT BUYING
TO HAVE A POSITIVE WORRIED ABOUT ECO- OR ETHICALLY-
IMPACT ON THE CLIMATE CHange CONSCIOUS PRODUCTS
ENVIRONMENT THROUGH MAKES THEM FEEL
MY EVERYDAY ACTIONS GOOD
 The responses suggest that in some sense, everyone is, to a degree, green and ethical.
 The modern ethical consumer is not defined by a particular profile or demographic, but is simply an
average, ordinary person.

INTRODUCTION
CONCLUSION
More environmentally conscious mind-set in emerging markets
% of Respondents Agree or Strongly  Increasing awareness around ethical and

Agree: I try to have a positive impact on environmental issues is driving the rise in more
the environment through my everyday conscious consumption and consumers’ more
actions 2017 knowledge-based purchasing decisions.
Colombia  In Euromonitor International’s Global Consumer
Indonesia
Trends Survey 2017, 65% of respondents claim to try
India
to have a positive impact on the environment through
Mexico
Brazil everyday actions.
Middle East  The movement is even more progressive in emerging
Italy markets where a higher than global average ratio of
South Africa
consumers seek out ways to make positive decisions
Poland
China
about what they buy and look for a solution to the
France negative impact consumerism is having on the world.
US  The rapid economic development in emerging
South Korea
markets has also triggered negative environmental
Thailand
Turkey
changes, such as pollution, water scarcity or
Australia unmanaged industrial waste, which has a direct and
UK more severe impact on consumers’ lives and health.
Russia
 As a result, emerging markets are becoming the
Germany
Japan
world's environmental pioneers. They are at the
forefront of using technology and their emerging
0 20 40 60 80
% respondents
wealth to drive more sustainable economic models.

Consumers’ ethical values mirrored in their shopping attitudes
Shopping Preferences:  Although a significant majority of consumers, globally

“Buying eco- or ethically-conscious 65%, agrees with the statement to try to make a
products makes me feel good” 2017 positive impact on the environment through everyday
Colombia actions, a much smaller proportion follows through with
India actual purchase of eco- or ethically-conscious
China products.
Indonesia
Mexico  However, the pattern of shopping behaviour is
Turkey mirroring the more environmentally conscious mind-set
Brazil in emerging markets versus developed economies.
Thailand
 Understanding what motivates consumers to make
Germany
South Korea
ethical purchasing decisions and how to communicate
Middle East environmental positioning effectively is a key strategic
Poland priority for companies.
Russia
 The fact that eco/ethical claims rank high in emerging
Italy
South Africa
markets consumers’ list of shopping preferences
USA indicates that lower spending power does not dent
Australia people's desire to minimise their impact on the
Canada environment.
United Kingdom
 However, given the price sensitivity of these markets
France
Japan
paying premium for more ethical products and services
is still not likely, given the motivations to find a bargain
0 20 40 60
% respondents ticked as applicable and high quality still outranks ethical considerations.

Ethical living sparks interest at later age in developed markets
 Globally, consumers’ interest in ethical peaks after the age of 30, in line with the height of their careers and
earning potential. However, in developed markets there is stronger engagement with environmental values
among the over 60s consumer base. Product ranges with strong eco-ethical claims in Western Europe and
North America can tap into the most interested green consumer base by aligning their offerings closely with
the concerns and desires of senior consumers, with higher spending power on fmcg goods.
 One of the reasons for the lower awareness of ethical features in fmcg products in developed markets
compared to emerging is the high penetration of iconic, mainstream products and brands, such as Nivea,
Nestlé or Nike, and a strong trust among consumers in their quality and functionality.
 In this market environment, brands with ethical positioning need to propose clear differentiation from
mainstream products already considered to be of high quality. Offering added value by focusing on the
long-term benefits of ethical production processes and interlocking with the increasingly health-focused
lifestyles and can ignite more green interest in developed regions.
“I try to have a positive impact on the environment through my everyday actions”
by Age 2017
100
80
% respondents
60
40
20
0
15-29 30-44 45-59 60+ 15-29 30-44 45-59 60+ 15-29 30-44 45-59 60+ 15-29 30-44 45-59 60+
North America Europe Asia Pacific Latin America

Education and parental status broadly impact ethical consumption
I try to have a positive impact on the environment  The market for ethical and
through my everyday actions environmental formulations is
80
promising; however, awareness
70 and preference varies
60
considerably with educational
level. College and university
% respondents
50
graduates displayed the highest
40 consciousness regarding
30 important environmental
considerations.
20
 Consumers with children under
10
17 also show a measurably
0 higher interest in behaviour
Graduate or post- University Vocational school Secondary school Primary school
graduate studies graduate graduate graduate graduate protecting the environment
compared to non-parents.
 This suggests that greater
consumer education is required
to help people appreciate
scientific claims and the health
benefits of certain eco- and
ethical credentials, in order to
engage with a wider consumer
base.

Environmental considerations grow in line with income
 In addition to education and parental status, “I try to have a positive impact on the
income is also an important factor in consumer environment through my everyday actions” by
behaviour and mindful consumerism. Across Income Bracket 2017
100
all markets, the lowest income brackets show
the least interest in ethical consumption. 90
Awareness is steadily rising in line with income 80
up to the middle-income bands at which point
70
it is staying similar across all brackets.
% respondents
60
 Income factors differently in identifying the
ethical consumer across geographies. For 50
example, in China there is a significant 40
difference in ethical interest across income
30
levels, while in India income seems to be less
of a determining factor and consumers across 20
all brackets show strong environmental values 10

in their consumption. 0
US $0-$20,000
US $0-$20,000
US $0-$20,000
US $0-$20,000
US $100,101-$150,000
US $100,101-$150,000
US $100,101-$150,000
US $100,101-$150,000
US $20,001-$40,000
US $60,001-$80,000
US $20,001-$40,000
US $60,001-$80,000
US $20,001-$40,000
US $60,001-$80,000
US $20,001-$40,000
US $60,001-$80,000
 The challenge for the industry lies with the fact
that the majority of ethical brands are targeting
a young, highly educated and digitally
engaged and high income audience but they
need to expand their reach to drive a more
inclusive ethical trend and commercialise
sustainable processes. China India USA Germany

The typical ethical consumer
70%
OF RESPONDENTS IN EMERGING
MARKETS
71%
OF RESPONDENTS WITH
GRADUATE DEGREE
71%
OF RESPONDENTS WHO ARE
PARENTS OF UNDER 17S
Globally 65% of consumers agree with:

I try to have a positive impact on the environment through
65%
OF RESPONDENTS WITH INCOME
my everyday actions: OVER USD88,000

INTRODUCTION
CONCLUSION
Developed markets continue spending on ethical labels
 Research suggests that our society is becoming greener, although “ethicalisation” is not universal and it is
still the developed economies that drive the commercialisation of sustainability and have a relatively
developed ethical labels market. Although Euromonitor International’s Global Consumer Trends Survey
2017 data clearly show a significantly higher interest in ethical consumption and concerns about the
environment in emerging markets, the actual value sales of commercialised certifications and positioning
are significantly higher in developed markets.

Interest in ethical consumption versus actual value sales
 In 2016, 19 out of 25 top ethical labels markets are developed Packaged and Fresh Food Sales:
economies. The US is the biggest market with over a quarter Market Value (USD billion) 2017
of the global spend. Japan is second. China - one of the six China vs US
developing countries in the top 25 - is at number three.
 This contradictory situation is shaped by market dynamics
such as availability, pricing and consumption habits.
 The strong penetration of local products across a wide range Fresh Food: Fresh Food:
of industries, which inherently carry environmental 735.7 221.0
characteristics, eg locally produced, low carbon footprint with
no air freight needed, pesticides free (organic) are not
commercialised as ethical labels and, despite fitting into
“ethical” by nature, do not carry commercial ethical labels,
therefore are not called “ethical” and their sales are not
captured in Euromonitor International’s Ethical Labels system.
Packaged Food: Packaged Food:
 On the other hand, in developed markets, many of the 231.6 377.6
environmental credentials have become the norm across
industries, such as recyclable packaging or GMO free, which
are no longer unique selling points or purchase influencers.
 This conundrum of high interest in environmental claims in Number of Commercialised Ethical Label
price-sensitive markets and strong value sales of mainstream Brands on the Food and Beverages Market
ethical labels call for diverse strategies in the ethical market 2016
space. China: 118 US: 253

Consumer spending on ethical food and beverages
 Ethical living means being mindful of others (other human beings, animal welfare and/or the environment)
when making life decisions and consumer choices. However, when it comes to spending on products
marketed as ethical, not all dimensions of ethical resonate equally strongly with consumers.
 Sales of ethically labelled food and beverages in 2016 indicate that the majority of consumers’ spend on
ethical labels is centred around environmental causes, followed by spending in the areas of wellbeing and
animal welfare. Charitable causes and religious labels is the smallest area of ethical spending.
Ethical Living
Environment Wellbeing Society

Carbon Footprint
Bird/Insect Friendly
700,000 700,000 700,000
Grass Fed/Pasture
Retail value (USD million rsp)
Compostable/Bio Raised
600,000 degradable 600,000 No Antibiotics 600,000
500,000 From 500,000 Free Range 500,000

Sustainable/Ren
BPA Free
400,000 ewable Sources 400,000 400,000
Responsible Protected
Forestry Origin/Speciality
300,000 300,000 300,000
No Hormones
Sustainable
200,000 Sourcing 200,000 No Added Sugar 200,000
Charity
100,000 100,000 No MSG 100,000
Recycling Label
GMO Free Religious Labels
0 0 0

Recycling label is most common and most trusted worldwide
 Recycling label is by far the biggest selling ethical Top Countries Globally for Recycling
label. In 2016, ethical food and drink carrying a Label Sales in Packaged Food 2016
recycling label generated close to USD700 billion Japan
USA
globally. This means that in value terms over 70% Brazil
of sales of ethically labelled food and beverages Germany
also carry a recycling label. Italy
South Korea
 However, recycling is not only the most common Mexico
Australia
ethical label. It is also the most trusted among green UK
labels, according to Euromonitor International’s France
Global Consumer Trends Survey 2017. 0 20 40 60 80
USD billion
Consumer Trust in Green Labels 2017

70
“trustworthy” as an option
% respondents choosing
60
50
40
30
20
10
0
Recyclable Locally Natural Environ- Organic No artificial Sustain- Free range Non-GMO Fair trade Supports a Vegan Halal/
sourced mentally ingre- ably or UTZ charity or a kosher
conscious dients produced certified charit-
or eco- able cause
friendly
Descriptors used to label products

Waste management identified as one of eight main ethical trends
 Recycling and waste management was identified by Euromonitor among the eight key trends shaping
modern ethical living (Waste Not, Want Not). Alongside established and more traditional packaging
recycling approaches, companies explore new ways of reintegrating waste into production processes.
Powering the From Less Water Waste Not, Want Transparency

World to Waterless Not Rules
Alternative Means Animal Welfare Socially Active Everyone Counts

Waste recovery through recycling: established yet inconsistent
 Recycling of packaging materials is still one of the most Key Recycling Logos
established waste recovery approaches. Many common
pack types are recyclable. They can be collected and Möbius Loop
transformed into raw materials in order to be re-entered Universal Recycling
into the manufacturing process; provided the relevant
Symbol
facilities are in place. This requirement for adequate
recycling facilities usually requires involvement from the Green Dot European Logo
industry, government and end consumers, and largely for Recycling Financing
varies between countries.
(Duales System
 The more developed economies tend to benefit from the Deutschland)
strongest recycling systems. In the EU, all companies
contribute to recycling even if their materials are non- TerraCycle
recyclable. Outside the EU, it largely depends on the Recyclable Logo for
country. Hard-to-Recycle Items
 The Universal Recycling Symbol is the most widely
recognised symbol globally for recyclable packaging. It is RecycleNow UK
often confused by consumers with the Green Dot UK Recyclable Logo
symbol; logo of the dual system of industry funding for (WRAP)
packaging recycling, initiated in Germany, and is largely
in operation across the EU.
 Some countries also use their own symbols, for example Triman
the UK’s RecycleNow logo for recyclable materials. French Recyclable Logo

Some complexities in packaging recycling call for joint efforts
 Recyclability of a pack type depends on the complexity of the task, costs involved and the level of
consolidation in an industry. For plastics, the seven common triangular polymer symbols found on rigid
plastic packaging indicate that the polymer “is recyclable”. Only polymers 1 and 2, however, are widely
recycled; the others are more complex and require other types of facilities and resources.
 Some pack types require layers to be separated, such as liquid cartons. A few major manufacturers of
liquid cartons contribute substantially to liquid carton recycling globally. While the carton is to a large extent
reinjected into the manufacturing chain as raw material, the polyethylene and aluminium materials in liquid
cartons sometimes undergo pyrolysis so that energy can be recovered while eliminating solid waste.
 Other common pack solutions have elements that need to be removed so they can be recycled; such as
trigger closures on PET bottles, which contain several polymers.
 PET, glass, metal, folding cartons and flexible paper are among the most widely recycled pack types
globally. In most instances, these materials can re-enter their industry, for example food or beverages, as
raw packaging material.
 Certain programmes are in place for packaging that is harder to recycle; such as TerraCycle, which
operates in 20 countries and organises recycling for aluminium/plastic pouches used in prepared baby
food, and thin wall plastic containers for Tassimo and L’Or coffee pods. These pack solutions have to be
recycled into new products outside the retail packaging sphere. Further research is also conducted for
these less easy to recycle materials, such as through the CEFLEX European programme for the optimised
recycling of certain flexible pack types. CEFLEX is a project led by a consortium of European companies
which aims to result in an established collection, sorting and reprocessing infrastructure/economy across
Europe by 2025.

Innovation in plastic can help recycling but also creates challenges
 Much focus is on the recycling of rigid plastic, which represents 42% of retail packaging volumes in beauty
and personal care and 36% in home care. HDPE bottles are a major contributor of rigid plastic packaging in
home care and personal care; yet are not recycled far and wide. They are standard in shampoos,
conditioners and shower gel. They are even more important in home care, as the packaging of choice for
bleach, liquid detergents, softeners and surface cleaners. In 2016, leading packaging maker Alpla Werke
partnered with Henkel to produce 60,000 HDPE bottles for liquid detergent brand Perwoll; each made of
15% recycled HDPE. Alpla already uses rPET, such as through its PET recycling plants in Mexico.
 The plastic packaging industry is under particularly high pressure to innovate with/towards sustainable
solutions. Bio-based plastics - plastics in which carbon is partly derived from renewable feedstock - are
slowly becoming more common. At the same time, ocean plastic waste repurposing is also on the agenda
amid rising consumer awareness of the significance of plastic littering. Such alternatives have many
benefits over non-renewable, fossil-fuel based plastics, but their wider adoption is not without challenges
(eg release of other greenhouse gases such as methane, clear labelling and instructions on bottle disposal,
concerns over possible PET recycling programme contamination, lack of biodegradability etc).
Rigid Plastic by Type in Home and Personal Care 2016/2020
70
60
Billion units
50
40
30
20
10
0
2016 2020 2016 2020
Beauty/Personal care Home care
HDPE bottles Squeezable plastic tubes PET bottles Speciality cosmetic containers Other rigid containers Other plastic bottles

Ecover: green product in greener packaging
Ethically positioned company Ecover has a 0.4% share of home care value sales in Western
Europe in 2016. The company is known as an innovator in plastic packaging. In 2011, the
company launched green bottle, made from plastic derived from sugar cane. And since 2014, the
company has been working on repurposing beach plastic. Both initiatives have found following in
home and personal care industries.
 In 2014, Belgium-based company ecover released  In October 2017 in the UK, The company launched
The world's first washing-up liquid bottle made its ecover Ocean Washing-Up Liquid bottle made
from reclaimed ocean plastic. The First such with 50% plastic waste collected from the beaches
bottles contained 10% of plastic that had been of Rio de Janeiro, while the other 50% is also
retrieved from the sea. recycled.

Procter & Gamble: scaling up development of beach plastics recycling
With 10% value share in 2016, P&G’s Head & Shoulders is the best-selling shampoo brand
worldwide and the third biggest in France. Following the Ecover example, P&G became the latest
company to address ocean waste and beach plastics repurposing.
 In October 2017, Head & Shoulders received the  P&G partnered with US recycling company
UN Climate Change award for the first TerraCycle and the French waste management
commercially produced shampoo bottle made company SUEZ to launch its first bottle, made from
using beach plastic (launched in June 2017). 25% high-density polyethylene found on beaches.

Diversity in shades of green: key ethical considerations
Global Skin Care: Desired Eco/Ethical Features  However, it seems that it is not the recycling
2017 (recyclable, refillable or recycled packaging)
All natural ingredients that influences ethical purchases.
Recyclability of packaging is more often one
Plant/botanically derived ingredients
of the post-purchase rather than pre-
All organic ingredients purchase considerations.
"Free from” claims  According to the 2017 Euromonitor
Fragrance free International Beauty Survey, when it comes
to skin care (and other beauty and personal
Not tested on animals, cruelty free
care products), consumers seem to be
Water efficient to use and/or produce
prioritising natural, plant-derived and organic
Local medicinal, traditionally used herbs ingredients as well as “free from” and
Sustainably sourced ingredients “fragrance free” claims.
Recyclable packaging
 However, there are substantial regional
varieties in the importance of natural as well
Locally sourced ingredients
as plant and organic ingredients. Natural
Refillable bottles ingredients in personal care products seem
Recycled packaging to be more important for consumers in
emerging markets. For example, in facial
Gluten-free
moisturisers, 50.2% of respondents in South
Compliant with religious practice
Korea selected “All natural ingredients” as a
0 10 20 30 40 desired feature. And in Japan, only 8.1% of
% respondents respondents selected it as an option.

Belif: seeing is believing?
With high consumer interest in natural, organic and plant-based products, it is not surprising that
botanicals are at the front and centre of new product development in beauty. Over the forecast
period 2016-2021, a CAGR of 2% is expected for botanicals in beauty and personal care.
 The Korean cosmetic company Belif offers skin  The company has gone one step further in clean
care products with only natural ingredients. And not labelling, making the percentage value of each of
only that. Belif turns its ingredients list into a its ingredients an on-pack centrepiece.
packaging feature.

“Clean labels” define consumer priorities in nutrition
 The same can be observed when Path to Purchase: Influential Product Features, Global
it comes to purchase influencers Consumer Trends Survey 2017
in food and beverages. According Supports a charity or charitable cause
to the Global Consumer Trends
Sustainably sourced ingredients
Survey 2017, alongside the “All
natural” consumers seem to be BPA free
prioritising “Clean labels” such as Fair trade
“Hormone free”, “Non-GMO” and
Sustainably produced
“No artificial”. These priorities
stem from concerns around Grass fed/pasture raised
wellbeing and are important Recyclable packaging

contributors not only to ethical but
Environmentally conscious or eco-friendly
also healthy living trend.
Locally sourced or manufactured locally
 The importance of these concerns
also varies country-to-country. For Free range
example, over 40% of All natural

respondents in Russia, Poland
No artificial flavors or sweeteners
and Indonesia consider “no
artificial flavours or sweeteners” Non-GMO
as an important product feature in Hormone free

beverages. At the same time, only
0 10 20 30 40 50
22% respondents in Australia and % respondents
Canada selected it. Beverages Fresh Food Packaged Food

Capri-Sonne: reformulation, is the squeeze worth the juice?
Within soft drinks, it was juice that saw the majority of value sales of products bearing the no
artificial preservatives claim, with USD97 billion globally in 2016.
 Deutsche SiSi-Werke GmbH & Co KG is going  Capri-Sonne products with All Natural
beyond compliance and redefining the capri-sonne Ingredients contain no artificial colours or flavours
brand image in an effort to fend off the stagnation and no artificial preservatives. The company is also
in the juice category. committed to sourcing quality.

“All natural” appears to be influential product feature industry-wide
 “All natural” product features, according to Euromonitor International’s Global Consumer Trends Survey
2017, are an important purchasing influencer across many industries, with the exception of household
essentials. Environmentally/ethically conscious seems to be the most influential green feature in this
particular category - comprising home care and cleaning products.
Path to Purchase: Influential Product Features, Global Consumer Trends Survey 2017
Supports a charity or charitable cause
Locally sourced or manufactured locally
Fair trade
Sustainably produced
Environmentally/ethically conscious
All natural
0 10 20 30 40 50
% respondents
Skin Care Household Essentials Packaged Food Fresh Food Beverages Children's Products Apparel and Personal Accessories

Environmental/eco features score high in home and personal care
Global Consumers’ Willingness to Pay More  Environmental awareness and risk perception is
for “Environmentally friendly and/or ethical” especially high in household essentials, given that
Product Features by Industry 2017 powerful cleaning products are associated with
many health and ecological problems. For
Household Essentials example, the vulnerability of fresh water resources
has been linked to concerns about the detergents’
Skin Care water pollution. The high consumer awareness of
the environmental impact of the products indicates
Hair Care
the high potential for commercialising ethical
claims in the category.
 Consumers’ eco concerns are weighing least in
Food and Beverages - Fresh Food
apparel and personal care but a series of new
initiatives is tapping into the maturity of the
Colour Cosmetics “greenness” of the industry. For example, Rothy's,
a San Francisco-based footwear start-up, claims
Food and Beverages - Packaged
Food
ethical and low environmental impact production,
knitted from recycled water bottle materials and
Children's Products
placed on an eco-friendly, carbon-free sole.
 Given the apparel industry has acquired a bad
Apparel and Personal Accessories
reputation for unethical working conditions in its
emerging market factories, many new initiatives
0 5 10 15 20 are trading on the most prevalent “Made in ethical
% respondents working conditions” label.

adidas: cleaning the world’s oceans
adidas is another big name associated with tackling the ocean plastic waste issue. However
repurposing plastic in apparel and footwear might not resonate with wider consumer base as
according to Euromonitor International’s Global Consumer Trends Survey 2017, only 6.4% of
respondents named “Made from recycled materials” as an influential product feature for apparel
and personal accessories.
 In 2017, adidas in partnership with parley have  They have converted ocean plastic into technical
created a swimwear collection made from plastic yarn fibre called Econyl and used it to make the
waste collected from coastal areas. swimwear. Earlier in the year the company
released a sneakers collection.

Demand for eco/sustainable services lower than products
Global Travel Preferences: Travel  While globally some 26% of respondents claims:
Destination Features 2017 “Buying eco- or ethically-conscious products makes
me feel good”, when buying goods, only 10% shows
Relaxation
interest in eco/sustainable travel when choosing a
Nature and outdoor activities holiday destination. This shows that consumers might
be taking a more ethical approach when it comes to
Safe destination selecting goods versus services.
All-inclusive accommodations  This is the result of generally longer and more
complex supply chains when it comes to services
Shopping versus products. Benchmarking products against
ethical values, eg recycling or the origin of
Arts and heritage
ingredients is easier than evaluating more complex
Immersion in local culture services, such as travel provision.
 However, while there is increasing maturity in the
Sports and/or adventure activities
eco/ ethical space for products with the myriad of
Eco-tourism / sustainable travel similarly positioned offerings on all “green” platforms,
eco/ethical services is still a relative novel concept.
Urban area Business models focusing on services with strong
Group tours
ethical credentials still enjoy a period of low
competition.
Volunteer opportunities  The new frontiers of ethical consumption is pushing
0 20 40 60
forward from goods to services and integrating into all
% respondents aspect of consumers’ lifestyles.

Soneva Kiri Resort: slow life philosophy
Travel and tourism is big business in Thailand. In 2017, the industry is set to generate over USD19
billion. The Tourism Authority of Thailand hopes to increase the number of “high-spending” tourists
by discouraging zero-dollar tourism. It also plans to reduce the visa-on-arrival fee.
 Soneva Kiri Resort houses 24 villas and 11 private  The resort follows a SLOW LIFE philosophy:
residences that sit either on the beach or up on the Sustainable, Local, Organic, Wellness, Learning,
slopes of the rainforest. Every hut is built with Inspiring, Fun, Experiences. In 2014, the resort
sustainable materials, including local timber. was awarded The Butterfly Mark for its
environmental conservation practices.

INTRODUCTION
CONCLUSION
Three As to drive responsible consumption
 The three interrelated factors paving the path for

Awareness responsible consumption and ethical brands are awareness,
availability and affordability. These factors, however, make
ethical values “nice to have” instead of “need to have”.
Informed Conscientious Consumers rank higher primary features such as efficacy
and value as the main driving force behind their purchase.
 Ethical brands, however, can substantially increase brand
experience by incorporating efficacy and good value as part
of their key offerings.
 By default, ethical brands are harder to be placed within
Availability lower price points, but enhanced brand experience achieved
from combining all the necessary features can help to justify
Efficacy Accessible the premium pricing. Ethical values, in fact, are increasingly
becoming an important element of premium brands.
 Accessibility is another key factor, but due to the higher
price points, ethical brands are finding a place in department
stores and independent brand outlets mainly, but a growing
preference for online shopping can also facilitate their sale.
Affordability  The percentage of global population using the internet
increased from 28.9% in 2011 to 42.1% in 2016, and the
Value for Brand percentage of households possessing smartphones was up
money experience from 17.2% in 2011 to 45.6% in 2016.

Digital media drive awareness
Marketing Influences by Channel 2017  The phenomenal growth in

Friends/family recommendations
the internet and
smartphones is making it
Loyalty rewards program
easier to access
Independent consumer reviews
information about the
TV commercials
environment and social
Friends' social media posts or mentions
issues, shaping their
In-store advertising
opinions as well as
Print
promoting them to access
Social media posts from a brand or company
sites listing brands’ ethical
On-site booths or representatives at events records. Friends’ social
Brand or retailer advertising on social media media posts have a strong
Outdoor advertising bearing on marketing
Commercial shown before/during/after internet video influences.
Internet ads on my computer
 While there may not be
Internet ads on my mobile phone much about recommending
Location-specific ads or offers on my mobile phone an ethical brand just yet,
Radio any negative posting of a
Celebrity endorsements brand’s violation of ethical
Direct mail advertising code can spread like wild
Cell/ mobile phone text/ advertising fire, causing significant
0 20 40 60 80 damage to brand credibility.
% respondents

Volkswagen: social media backlash against emissions scandal
Volkswagen leads the global passenger cars market, but between 2014 and 2016 the company’s
share fell from 13.9% to 13.4% in car sales. In 2015, a scandal broke out about Volkswagen
employing software that could falsely improve the performance of its diesel engines on emissions
tests. It is reported that this scandal will cost the company USD30 billion in fines and repairs.
 “Deiselgate” led to a major backlash on social  The Number of posts mentioning Volkswagen shot
media. A dedicated account called @Vwscandal up by 540% within a week and its profit was down
was set up on Twitter. A major discussion was 20% as car sales suffered.
sparked on Facebook which directly associated the
company with environmental harm.

Availability of brands combining ethics and efficacy to do well (1)
 According to Euromonitor International’s Beauty Survey 2017, preference for environmentally friendly
features ranked below value for money and high quality, but efficacy combined with ethics is helping to
drive positive results for ethical brands.
 All natural is a good market positioning for brands as it denotes both ethics and efficacy.
 The perception for all natural/organic is that the supply chain is clean and the production process is
environmentally friendly. At the same time, natural/ organic is believed to have health benefits.

Beauty Survey 2017: % Selection by Important Skin Care Features

Value for money
High quality
Suited to or positioned for my skin type
Functions and/or benefits
Low price
Natural or organic
Super-high quality
Strong or well known brand
Hypoallergenic
Multi-functional and/or multiple benefits
Ingredient formulation
Environmentally friendly and/or ethical
Type of format
Medicated /clinical formulation with therapeutic ingredients
Suited to or positioned for my gender
Claims on label
International brand
Premium or luxury brand
Type of applicator
Local brand
Suited to or positioned for my race or ethnicity
Endorsed by celebrity
High price
0 5 10 15 20 25 30 35 40
%

Beauty Survey 2017: % Selection by Important Colour Cosmetics Features

Liked the colour
Value for money
Matched my skin tone
High quality
Low price
Liked the texture/feel of the product
Offered good coverage
Suits my skin concerns
Super-high quality
Appropriate or positioned for my skin type
Natural or organic
Hypoallergenic
Strong or well known brand
Functions and/or benefits
Multi-functional and/or multiple benefits
Environmentally friendly and/or ethical
Ingredient formulation
Liked the delivery format
Type of applicator
International brand
Suited to or positioned for my gender
Premium or luxury brand
Claims on label
Suited to or positioned for my race/ethnicity
Local brand
Endorsed by celebrity
Limited edition
High price
0 5 10 15 20 25 30 35
%

Natural/organic positioning helps combine health and ethics
 According to Euromonitor Consumer Preference: Natural/Organic over Efficacy in

International’s Beauty Survey Beauty 2017
25
2017, about one quarter of
respondents selected natural
over efficacy for colour 20
cosmetics, hair care and skin
care, indicating majority
preference for efficacy.
% respondents
15
 However, there are good

examples that show
10
combining both can yield
impressive results as in the
case of a number of
5
cosmetics brands such as
Weleda, L’Occitane and Lush.
0
Colour Cosmetics Hair Care Skin Care

Lush: brand excitement and ethics delivering impressive results
Lush is a UK-based cosmetics retailer specialising in hand-made cosmetics. The company’s

unique positioning has helped it to gain significant market share within a short period of time. Lush
is the UK’s fourth leading bath and shower company, recording 36% growth in sales between 2011
and 2016.
 Lush products are made from natural ingredients  The product display is colourful and aromatic,
and perceived to be good for the skin. The brand is offering customers an array of sights and senses.
sold through its own outlets, which are placed in The company is also involved in a number of
key locations including busy stations and shopping advocacy issues including animal rights and anti-
malls. tax avoidance.

Ethics can add to value perception of goods
 There is generally a trade off between higher Consumer Preference: Natural/Organic over
price and brand ethics, but this is slowly Price for Beauty 2017
45
changing as consumers show greater
propensity to pay a premium for efficacious
ethical brands which they can justify as an 40
enhanced brand experience.

 Some 40% of respondents in Euromonitor 35
International’s Beauty Survey 2017 stated that

they are willing to pay more for all natural and 30
organic products. This could be partly due to
% respondents
health benefits, but also because of the ethical/ 25
environmental considerations. Euromonitor’s
Ethical Labels system indicates that consumers
20
are willing to pay a premium for environmental
benefits, as the market for packaged food
brands positioned as environmentally friendly 15
increased by 19.7% between 2015 and 2016

globally. 10
 Ethical brands sales can be further facilitated in

the future despite the higher price points by the 5
growth of dedicated digital media sites that
specialise in creating awareness by 0
commenting on brands’ ethical records. Colour Cosmetics Hair Care Skin Care

Awareness: dedicated websites to help make ethical choices
Ethisphere is an institute that specialises in defining and promoting

ethical standards in business. It launches a list of the world’s most
ethical companies online based on three areas including internal
ethical standards, enabling employees to make good choices and
innovativeness in the area.
Ethical Company provides ethical information on companies and

brands to individuals. It carries out independent research on 30,000
plus companies using 15 different criteria under three general
headings including Environment, People and Animals and publishes
a list of ethical brands.
Ethical Consumer is a site that describes itself as a tool to help

consumers make easy ethical choices. It rates around 40,000
brands, companies and products globally to provide information
about ethical standards and practices. Some information on the site
is free, but the rest is available for a small subscription fee to help
fund the work.

INTRODUCTION
CONCLUSION
CONCLUSION
Future of the ethical industry
 Over the next five years, the global market for ethical products is set to expand. However, the pace of
growth will remain slow. If using food and beverages carrying widely recognised and commercialised ethical
label as a proxy, the market will post a 2.1% CAGR over 2016-2021 at constant 2016 prices to reach
USD1.1 trillion (ethically labelled food and beverages only).
 Interest in ethical goods is likely to remain stronger than demand for ethical services.

CONCLUSION
Sustainable packaging will continue to dominate “ethical dollar”
 Ethical products carrying some sort of sustainable packaging label (compostable/biodegradable, from
sustainable/renewable sources and recycling labels) will continue to dominate ethical labels. Packaging
carrying Terracycle and From Sustainable/Renewable Sources labels is forecast to be most dynamic.
 Developed markets will continue generating the bulk of sales but developing markets will grow faster.

CONCLUSION
Ethical consumer: what you need to know
Consumers’ ethical values mirrored in their shopping attitudes: Effective communication of

eco/environmental credentials is key to commercialisation
Although emerging markets consumers show higher interest in ethical consumption, developed markets
continue spending more on ethical labels
Recycling labels are most common and most trusted worldwide, however, recyclability of packaging is
more often one of the post-purchase rather than pre-purchase considerations
The new frontiers of ethical consumption is pushing forward from goods to services and integrating into all
aspects of consumers’ lifestyles
Ethical values, however, remain “nice to have” instead of “need to have”. Consumers rank features such as
efficacy and value as the main driving force behind their purchase decision
Society is slowly “greening”. Ethical is slowly becoming integrated into the mainstream. Companies that
have been reliant on their eco image will need to innovate beyond this to stay in the game

CONCLUSION
Leverage the power of megatrends to shape your strategy today
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For further insight please contact
Oksana Malynovska
Head of Industry
oksana.malynovska@euromonitor.com
Ildiko Szalai
Project Manager - Beauty and Fashion
ildiko.szalai@euromonitor.com
@emi_Ildiko
Oru Mohiuddin
Senior Consultant - Economies and Consumers
oru.mohiuddin@euromonitor.com
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ETHICAL LIVING: MINDFUL CONSUMERISM

Megatrend analysis at Euromonitor International

 Euromonitor International’s team of economic, consumer and industry Disclaimer

© Euromonitor International MEGATRENDS: ETHICAL LIVING: MINDFUL CONSUMERISM PASSPORT 3

 Euromonitor International’s team of economic,

© Euromonitor International MEGATRENDS: ETHICAL LIVING: MINDFUL CONSUMERISM PASSPORT 4

Ethical Living is one of the eight key megatrends

 Consumers and business continue to

© Euromonitor International MEGATRENDS: ETHICAL LIVING: MINDFUL CONSUMERISM PASSPORT 5

Ethical consumer: key findings

© Euromonitor International MEGATRENDS: ETHICAL LIVING: MINDFUL CONSUMERISM PASSPORT 6

 “Ethicalisation” (or often interchangeably called

© Euromonitor International MEGATRENDS: ETHICAL LIVING: MINDFUL CONSUMERISM PASSPORT 7

Everyone is going “green”?

65% 61% 26%

© Euromonitor International MEGATRENDS: ETHICAL LIVING: MINDFUL CONSUMERISM PASSPORT 8

More environmentally conscious mind-set in emerging markets

% of Respondents Agree or Strongly  Increasing awareness around ethical and

© Euromonitor International MEGATRENDS: ETHICAL LIVING: MINDFUL CONSUMERISM PASSPORT 10

Consumers’ ethical values mirrored in their shopping attitudes

Shopping Preferences:  Although a significant majority of consumers, globally

© Euromonitor International MEGATRENDS: ETHICAL LIVING: MINDFUL CONSUMERISM PASSPORT 11

Ethical living sparks interest at later age in developed markets

© Euromonitor International MEGATRENDS: ETHICAL LIVING: MINDFUL CONSUMERISM PASSPORT 12

Education and parental status broadly impact ethical consumption

© Euromonitor International MEGATRENDS: ETHICAL LIVING: MINDFUL CONSUMERISM PASSPORT 13

Environmental considerations grow in line with income

all brackets show strong environmental values 10

© Euromonitor International MEGATRENDS: ETHICAL LIVING: MINDFUL CONSUMERISM PASSPORT 14

The typical ethical consumer

Globally 65% of consumers agree with:

© Euromonitor International MEGATRENDS: ETHICAL LIVING: MINDFUL CONSUMERISM PASSPORT 15

Developed markets continue spending on ethical labels

© Euromonitor International MEGATRENDS: ETHICAL LIVING: MINDFUL CONSUMERISM PASSPORT 17

Interest in ethical consumption versus actual value sales

© Euromonitor International MEGATRENDS: ETHICAL LIVING: MINDFUL CONSUMERISM PASSPORT 18

Consumer spending on ethical food and beverages

Environment Wellbeing Society

500,000 From 500,000 Free Range 500,000

© Euromonitor International MEGATRENDS: ETHICAL LIVING: MINDFUL CONSUMERISM PASSPORT 19

Recycling label is most common and most trusted worldwide

Consumer Trust in Green Labels 2017

© Euromonitor International MEGATRENDS: ETHICAL LIVING: MINDFUL CONSUMERISM PASSPORT 20

Waste management identified as one of eight main ethical trends

Powering the From Less Water Waste Not, Want Transparency

Alternative Means Animal Welfare Socially Active Everyone Counts

© Euromonitor International MEGATRENDS: ETHICAL LIVING: MINDFUL CONSUMERISM PASSPORT 21

Waste recovery through recycling: established yet inconsistent

© Euromonitor International MEGATRENDS: ETHICAL LIVING: MINDFUL CONSUMERISM PASSPORT 22

Some complexities in packaging recycling call for joint efforts

© Euromonitor International MEGATRENDS: ETHICAL LIVING: MINDFUL CONSUMERISM PASSPORT 23

Innovation in plastic can help recycling but also creates challenges

© Euromonitor International MEGATRENDS: ETHICAL LIVING: MINDFUL CONSUMERISM PASSPORT 24

Ecover: green product in greener packaging

© Euromonitor International MEGATRENDS: ETHICAL LIVING: MINDFUL CONSUMERISM PASSPORT 25

Procter & Gamble: scaling up development of beach plastics recycling

© Euromonitor International MEGATRENDS: ETHICAL LIVING: MINDFUL CONSUMERISM PASSPORT 26

Diversity in shades of green: key ethical considerations

© Euromonitor International MEGATRENDS: ETHICAL LIVING: MINDFUL CONSUMERISM PASSPORT 27

Belif: seeing is believing?

© Euromonitor International MEGATRENDS: ETHICAL LIVING: MINDFUL CONSUMERISM PASSPORT 28

“Clean labels” define consumer priorities in nutrition

wellbeing and are important Recyclable packaging