Nielsen Global Sustainable Shoppers Report

SUSTAINABLE SHOPPERS
BUY THE CHANGE THEY WISH TO SEE IN THE WORLD
A STRATEGY GUIDE BY
Copyright © 2018 The Nielsen Company (US), LLC. All Rights Reserved.
THE WHO ESTIMATES 12.6 MILLION PEOPLE
GLOBALLY DIE FROM ENVIRONMENTAL
FORCES OF CHANGE
HEALTH RISKS ANNUALLY WITH AIR AND WATER
POLLUTION REACHING DANGEROUS LEVELS ARE DRIVING
SUSTAINABILITY’S
MOMENTUM
A new era of sustainability is rising and it’s touching
CORPORATE GOVERNMENT every corner of the world. Driven in part by
INVOLVEMENT ACTION
ION CRISIS
Corporations are stepping Sustainable legislation,

consumers, governments, corporations and the
up to sustainability,
changing both the economic
aimed at cleaning up
the earth will impact
growing visible effects of pollution, sustainability
and retail landscape. global economies and initiatives are becoming more ubiquitous, more
influence production and
distribution practices. aggressive, and more expected. Looking for a better
lifestyle, consumers are searching for options that are
T
healthier for them and for their homes.

OLLU
CONSUMER THE GOOD NEWS IS THAT COMPANIES CAN

P
DEMAND
Consumers see the impact of
their purchases on the world and
BE BENEVOLENT AND BANKABLE IF THEY
their health and need help making
sustainable choices. UNDERSTAND THE INTRICACIES OF THESE
FORCES AND REACT ACCORDINGLY.
THE
CHALLENGE:
SUSTAINABILITY IS A BROAD, ALL-ENCOMPASSING This report highlights what consumers care about
when it comes to sustainability, the biggest
TERM AND IT’S OFTEN DIFFICULT TO KNOW growth opportunities and the differences among
WHERE TO START. consumer sentiments across markets.
We will also highlight the forces of change moving

this mega trend forward: the environmental
challenges impacting people around the world
and how governments and corporations are
responding.
Then we’ll provide strategies for companies that

hope to succeed in the continuously evolving
sustainability space.
TABLE OF CONTENTS
THE EVOLUTION OF THE SUSTAINABLE MINDSET POLLUTION AND GOVERNMENT PRESSURES
GET WITH THE PROGRAM: CONSUMERS GLOBAL POLLUTION REACHING A CRISIS POINT > 33
DEMAND SUSTAINABILITY > 5
THE EVOLVING APPROACH TO CORPORATE SUSTAINABILITY > 7 GOVERNMENT REGULATIONS IN PLAY > 35
UNPACKING THE SUSTSAINABILITY LANDSCAPE FINDING SUCCESS THROUGH SUSTAINABILITY

GROWTH AT THE INTERSECTION OF HEALTHY YOUR GUIDE TO SUCCESS THROUGH SUSTAINABILITY > 39
FOR ME AND HEALTHY FOR WE > 9
WHAT DOES THE FUTURE OF SUSTAINABILITY HOLD? > 43
SPOTLIGHT: WHO’S SUCCESSFULLY CONNECTING
THE SUSTAINABILITY DOTS? > 12
SUSTAINABILITY LESSONS FOR EVERY MARKET TYPE > 13
FRANCE > 14
U.S. > 18
CHINA > 24
INDIA > 28
GET WITH THE CORPORATE SUSTAINABILITY IN HIGH
DEMAND ACROSS GENDER AND GENERATIONS
PROGRAM: PERCENTAGE OF RESPONDENTS WHO SAID THAT IT IS “EXTREMELY” OR “VERY”
IMPORTANT THAT COMPANIES IMPLEMENT PROGRAMS TO IMPROVE THE ENVIRONMENT
CONSUMERS 80%
DEMAND 81%
OF GL OB A L
OF ME N
SUSTAINABILITY R E S P ONDE N T S
81%
OF W OME N
In a recent global online survey, a whopping
81% of global respondents feel strongly
that companies should help improve the GEN Z 80%
environment. This passion for corporate 15 -2 0
responsibility is shared across gender lines MILLENNIALS 85%

21 - 34
and generations. Millennials, Gen Z and Gen
GEN X 79%
X are the most supportive, but their older
35 - 49
counterparts aren’t far behind.
BABY BOOMERS 72%
50 - 64
SILENT GENERATION 65%
65+
Source: The Conference Board® Global Consumer Confidence Survey, conducted in collaboration with Nielsen Q2 2017
WHO’S MOST ENTHUSIASTIC
FOR COMPANY-DRIVEN FACING RAPID URBANIZATION
ENVIRONMENTALISM? AND A GROWING DISPARITY
BETWEEN CLASSES, MANY
Emerging market consumers, many of whom are dealing with PEOPLE IN EMERGING MARKETS
environmental hazards in their everyday lives. In search of better
solutions, it’s no surprise that these consumers are more demanding of
ARE EXPERIENCING THE
companies. HARSH REALITY OF POLLUTION
IN THIS POST-MODERN
TOP COUNTRIES WHERE CONSUMERS DEMAND INDUSTRIAL AGE. AS A RESULT,
CORPORATE SUSTAINABILITY
SUSTAINABILITY HAS BECOME
PERCENTAGE OF RESPONDENTS WHO SAID THAT IT IS “EXTREMELY” OR “VERY” IMPORTANT THAT
COMPANIES IMPLEMENT PROGRAMS TO IMPROVE THE ENVIRONMENT BY COUNTRY AN URGENT OPPORTUNITY
97%
FOR COMPANIES TO CONNECT
96% 95% 94% 94% 94% 94%
92% 92% 92% 92% WITH CONSUMERS WHO ARE
EXCITED ABOUT CHANGE.
REGAN LEGGETT,
S
AN
O
U
ILE
A
ELA
A
IA
L
BIA
E
XIC
PER
AZI
ESI
TIN
IND
PIN
IST
CH
LUM
EZU
BR
ON
ME
GEN
EXECUTIVE DIRECTOR,
PAK
ILIP
IND
VEN
CO
AR
PH
THOUGHT LEADERSHIP AND
This opportunity hasn’t gone unnoticed, and the strategies employed FORESIGHT, GLOBAL MARKETS
by corporations to date have been influential in driving sustainability NIELSEN
forward.
THE EVOLVING APPROACH TO
WHAT’S GROWING IS THE BOLDNESS
CORPORATE SUSTAINABILITY
OF THE MARKETING MESSAGES AND From pledging to eliminate single-use plastics to using artificial intelligence to
build greener production processes, companies large and small are feeling the
THE COMMITMENTS THAT BRANDS
pressure from consumers and governments to be both reactive and proactive in
ARE WILLING TO TAKE. WE’RE SEEING
their sustainability strategy.
A BIGGER TREND TOWARDS ‘VISIBLE
AND EMOTIONAL SUSTAINABILITY’— This notion of corporate sustainability isn’t new for many companies, particularly
global multi-nationals, but it’s both evolved and gained steam in the last four to
BRANDS TAKING A STANCE ON
five years.
SOCIAL AND POLITICAL ISSUES AND
MAKING MAJOR COMMITMENTS TO CORPORATE SUSTAINABILITY GAINS STEAM OVER LAST FIVE YEARS
ELIMINATE WASTE. AT THE MOST NINETY-NINE FOOD
EXTREME END, WE SEE BRANDS ONLY 20% OF S&P 500® 65% OF SALES MANUFACTURERS,
COMPANIES, A MULTI- REPRESENTED BRANDS RETAILERS AND
BEING PERSONIFIED—BEING INDUSTRY STOCK GROUP USING SUSTAINABLE ASSOCIATIONS HAVE
REFERENCED AS ‘BRAVE BRANDS’ OR OF LARGE CAPITAL U.S. MARKETING. SIGNED THE UK
BASED COMPANIES, A 10 YEAR BASES STUDY PLASTICS PACT.
‘HERO BRANDS. CHOOSE TO DISCLOSE SHOWS ONLY 5% OF ALL WINNING INNOVATION
THEIR ENVIRONMENTAL, INITIATIVES TESTED CONCEPTS TESTED BY 85% OF S&P 500
SOCIAL & GOVERNANCE INCLUDED SUSTAINABLE BASES INCLUDE: ECO- COMPANIES DISCLOSE
CRYSTAL BARNES, (ESG) INFORMATION. BENEFITS-INCLUDING FRIENDLY PACKAGING, THEIR ESG STATUS.
NATURAL AND ORGANIC. LESS PACKAGING,
SVP, GLOBAL RESPONSIBILITY NATURAL INGREDIENTS, ALMOST A QUARTER (22%)
& SUSTAINABILITY PLANT BASED. OF 2018 SUPER BOWL ADS
WERE SOCIALLY-CHARGED.
NIELSEN
PRE - 2013 2013 2014 PRESENT
Source: Nielsen BASES, Governance & Accountability Institute, http://www.wrap.org.uk/, The Nielsen Sustainability Imperative Report 2015
Copyright ©
Copyright © 2018
2018 The
The Nielsen
Nielsen Company
Company (US),
(US), LLC.
LLC. All
All Rights
Rights Reserved.
Reserved.
In the public eye, retail and manufacturing industries are collaborating with governments to make major
commitments to reduce waste — particularly single-use plastics. Adjacent industries such as fast-food, restaurants
and food delivery organizations are also jumping on the bandwagon — rolling out plans to curb plastic by
eliminating utensils or straws, to coordinating with local service organizations to ensure un-purchased food goes to
underserved communities.
FIVE CURRENT SUSTAINABILITY STRATEGIES FOR RETAILERS AND MANUFACTURERS
REDUCE AND / OR REFORMULATE REVAMP THE SUPPLY CHAIN DIVERSIFY THE PRODUCT
1 PACKAGING AND INGREDIENTS 2 AND / OR SUPPLIERS 3 AND / OR VENDOR PORTFOLIO
4 UPDATE AND / OR CHANGE 5 INTEGRATE SUSTAINABILITY INTO

EXISTING BUSINESS MODELS CONSUMER TOUCHPOINTS AND
MARKETING
The more companies embrace sustainability, the more they change the product and retail landscape. Consumers
are constantly reacting to and evolving in this space, growing more sophisticated. In order to stay relevant,
companies will need to ensure they are putting consumer needs at the center and doubling down on their
marketing and execution strategies.
GROWTH AT THE INTERSECTION OF
HEALTHY FOR ME AND HEALTHY FOR WE
Consumers aren’t just demanding that companies
make changes to better the world. As their
E ABILI
conscientiousness grows, they’re also making a
few adjustments themselves.
ENC TY
ENI
THE MAJORITY (73%) OF CONSUMERS SAY
TO S
CONV
THEY WOULD DEFINITELY OR PROBABLY
PEND
CHANGE THEIR CONSUMPTION HABITS TO OR C
ORGANIC
REDUCE THEIR IMPACT ON THE ENVIRONMENT. ALL-NATURALL
AL
GMO-FREE
LOW FAT NO ARTIFICIAL CRUELTY-FREE
That doesn’t mean every sustainability trend
LOW SODIUM INNGREDIENTSS ECO-FRIENDLY
provides an equal opportunity for growth. There’s CARBON NEUTRAL
a wealth of sales trends globally that show that HIGH PROTEIN PARRABEN-FRE
REE
GLUTEN FREE RECYCLABLE
products living in the sweet spot of “healthy for
me and healthy for the world” are growing in
S
demand. As consumers weigh the choices in front

S
PRI
E
of them, they view each new opportunity through

EN
the lens of convenience, price and awareness. R CE

AWA
Consumers are becoming increasingly aware of what they put into their bodies and on their skin and are
also interested in purchasing—and sometimes in paying more for—products that simultaneously help the
environment.
Half of global respondents (49%) say they’re inclined to pay higher-than-average prices for products with
high-quality/safety standards, which consumers often associate with strong sustainability practices. Just
behind safety and function, consumers are willing to open their wallets for products that are organic (41%),
made with sustainable materials (38%) or deliver on socially responsible claims (30%).
HEALTHY FOR ME & HEALTHY FOR THE WORLD CAN BE LINKED TO TOP PREMIUM FACTORS
HOW WILLING ARE YOU TO PAY A PREMIUM (MORE THAN YOU CONSIDER AVERAGE PRICE) FOR PRODUCTS THAT PROVIDE THE FOLLOWING ATTRIBUTES OR BENEFITS?
WITH HEALTH Y FOR ME & THE WORLD EXAMPLES
COMES WITH HIGH-QUALITY / SAFETY STANDARDS 49%

ORGAN IC , AN TI B I OTI C F R EE, H O R M O N E F R EE, N O N - G M O
PROVIDES SUPERIOR FUNCTION OR PERFORMANCE 46%

S U L FAT E-F RE E, H O R M O N E FR EE, M I N ER A L S
CONTAINS ORGANIC / ALL-NATURAL INGREDIENTS 41%

ORGAN IC , AL L- N ATU R A L , N O A RTI F I CI A L I N G R ED I EN TS, PR ESE R VAT I VE-FR E E , PAR AB E N-FR E E
CONTAINS ENVIRONMENTALLY FRIENDLY /

SUSTAINABLE MATERIALS 38%
B PA-F RE E , T ER R ACYCL E CERTI FI ED, CO M P O S TA B L E O R PL ANTAB L E PAC KAGI NG, R E U SAB L E
OFFERS / DOES SOMETHING NO OTHER PRODUCT ON

THE MARKET PROVIDES 37%
U P C YC L E D, M A D E FR O M WAS TE / R ECYCL ED P R O D U CTS, E DI B L E PAC KAGI NG
DELIVERS ON SOCIAL RESPONSIBILITY CLAIMS

F RE E-RAN GE , PAS TU R E- R A I S ED, H U M A N E 30%
SUSTAINABILITY IS A WAY TO At the same time, many consumers are less picky about who
is producing products that have sustainable attributes they’re
SHOW CONSUMERS THAT YOU seeking; potentially opening the door for non-name brands.
LISTEN TO THEM, CARE FOR THEIR ALMOST HALF (46%) OF SURVEYED GLOBAL
NEEDS AND ARE THOUGHTFUL CONSUMERS SAID THEY WOULD BE WILLING
ABOUT THE PRODUCTS YOU TO FORGO A BRAND NAME IN ORDER TO BUY
PRODUCE FOR THEM. WITH ENVIRONMENTALLY FRIENDLY PRODUCTS
THE RIGHT MESSAGING
SUSTAINABILITY CAN REPRESENT The healthy for me and healthy for the world framework can be
PREMIUM INDICATORS SUCH applied universally, but the nuances of each market affects what
consumers care most about at the healthy for me and healthy for
AS QUALITY, SUPERIOR the world junction, and just how much they’re willing to pay for it.
FUNCTION, UNIQUENESS,
AND ARE OFTEN TIED TO THE ENC
E
E A
ABIL B
ITY
‘GO-LOCAL’ MOVEMENT.
UTION CRISIS
ENI
CORPORATE GOVERNMENT
TO S
CONV
INVOLVEMENT ACTION
PEND
SUSTAINABILITY
CRYSTAL BARNES, LANDSCAPE

POLL
CONSUMER
SS
SVP, GLOBAL RESPONSIBILITY
ENE
PRI
DEMAND R CE
& SUSTAINABILITY AWA
NIELSEN
SPOTLIGHT
WHO’S SUCCESSFULLY CONNECTING
THE SUSTAINABILITY DOTS?
SUSTAINABILITY PRODUCT INNOVATIONS THAT ARE RELEVANT, ENDURING AND DISTINCT
A look at successful innovations launched over the past five years shows a few examples of where brands have found
opportunity at the intersection of health and wellness and sustainability. These products stood out from their peers
for having provided a distinct value to their category, strong sales in their first year, and continued strong sales in their
second year.
RELEVANT NATURAL100%
NATURAL, 100%
REALREAL ANTIBIOTIC-FREE
ANTIBIOTIC FREE RECYCLABLE
RECYCLABLE ORPACKAGING
OR LESS LESS PACKAGING
MINIMUM SALES ACHIEVED

IN YEAR 1
2015 UK 2015 GERMANY 2015 TURKEY 2017 US 2017 US 2015 EUROPE 2018 FRANCE
WITHOUT
WITHOUT PARABENS
PARABENS / SULFATES
/ SULFATES
ENDURING
2017 US 2016 FRANCE 2016 RUSSIA 2017 US 2018 MEXICO
ACHIEVED AT LEAST 90% OF
YEAR 1 SALES IN YEAR 2 NON-GMO,
NON-GMO, NO ARTIFICIAL INGREDIENTS
NO ARTIFICIAL / PRESERVATIVES
INGREDIENTS / PRESERVATIVES 2018 MEXICO
Source: Nielsen Breakthrough Innovation Reports 2015 - 2018

Note: date is after a two-year evaluation of sales performance
DISTINCT 2016 US 2016 US 2015 INDIA 2016 US
DELIVERED A NEW VALUE

PROPOSITION TO THE MARKET
2016 AUSTRALIA 2016 US 2018 FRANCE 2016 US
SUSTAINABILITY LESSONS
FOR EVERY MARKET TYPE
QUICK LINKS
Winning with sustainability is more nuanced
than offering an organic label or recyclable
packaging.
FRANCE The sustainability sophistication of each

market, economy, and environmental
situation presents its own unique
U.S. opportunities and challenges.

We look at four markets in various stages
CHINA to examine where fast-moving consumer

goods (FMCG) sustainability trends are
headed for similar markets, sharing
INDIA effective strategies and watch-outs.
FRANCE
FMCG SUSTAINABLE GOVERNMENT
SUCCEED IN SUSTAINABLY-SAVVY COUNTRIES
WITH PRECISE EXECUTION AND INNOVATION
CORPORATE ECONOMIC POLLUTION
OFFERINGS ACTION INVOLVEMENT GROWTH
France tops the list as one of the most sustainable FRANCE’S ORGANIC SALES SOAR, BOOSTED BY NEW PRODUCTS
countries in the world, especially when it comes to its YEAR OVER YEAR VALUE GROWTH VS TOTAL FMCG (VALUE SALES)
food systems, ahead of Japan, Germany, Spain and MEASURED IN HYPERMARKET AND SUPERMARKETS
Sweden according to the EIU’s Food Sustainability Index.
Their aggressive approach in passing legislation aimed at
tackling food waste has paid off, currently losing only 1.8% 18.6%
17.4%
annually. Building on this progress, they plan to further
slash that percentage in half by 2025. Despite slowing GDP
growth in the first half of 2018, high unemployment rates
5.8% 8.3%
and rising inflation, consumers continue to demonstrate +22% INCREASE
3.2%
their interest in sustainable goods through their IN ASSORTMENT
purchasing decisions. 1.7% 6.7%
2.6%
In recent years, the number of organic products in the
French market has exploded. In 2016 alone, there was 0.8% 0.2% 0.4% 0.9%
a 22% increase in assortment and the number of new
organic launches doubled between 2017 and the first half
of 2018. Over the past five years, sales of organic products 2012 2013 2014 2015 2016 2017
have enjoyed a healthy growth rate, but more recently
sales have spiked into the double-digits. Many of these TOTAL FMCG ORGANIC FMCG
new, organic products are sold in smaller packages and at
higher prices. Source: Nielsen ScanTrack ending December 31, 2017
Bigger isn’t always better for French consumers when it Private label has filled the gap by offering lower-priced but
comes to organic goods. Small and private label organic similar quality organic goods. 79% of French consumers
brands are regularly outperforming non-organic offerings. buy both private label and branded organic items, and as
Small brands continue to be the most prolific innovators a result, private label represents half of all organic’s sales.
and are taking advantage of aligning the benefits of their Within the private label space, organic has become a huge
sustainability strategies with being local. differentiator.
Private label organics sales grew 16 percentage points faster
FRANCE’S SMALL BRANDS AND PRIVATE LABEL EXCEL AT ORGANIC than the overall private label category (17.1% vs 0.8%) as of
VA L UE S H A R E B Y T Y P E OF BR A ND A C R O S S A L L C H A NNE L S
August 2018. Its volume saw a similar increase (15.7%), while
the overall private label category experienced a drop (-1.4%).
LARGE BRANDS 26.0%
> 250 MM
52.8%
11.3%
IN FRANCE, ORGANIC PRIVATE LABEL DRIVES THE
MEDIUM BRANDS OVERALL PRIVATE LABEL CATEGORY
250 - 50 MM 8.0% M O V I N G A N N U A L T O TA L ( M AT ) VA L U E A N D V O L U M E C H A N G E A C R O S S A L L C H A N N E L S
SMALL BRANDS 19.4% % VALUE CHANGE % VOLUME CHANGE

50 - 2 MM 10.5%
17.10%
15.70%
SMALLER BRANDS 3.9%
< 2 MM 3.3%
0.80%
39.4%
PRIVATE LABEL
25.4% -1.40%
ORGANIC NON-ORGANIC PRIVATE LABEL OVERALL ORGANIC PRIVATE LABEL

Source: Nielsen ScanTrack ending December 31, 2017 Source: Nielsen ScanTrack ending August 12, 2018
79%
Source: Nielsen Homescan Semptember 2017
OF ORGANIC BUYERS BUY BOTH PRIVATE
LABEL AND BRANDED ORGANIC PRODUCTS
MAKING UP 96.6% OF
ORGANIC PURCHASES
Other facets of sustainability are gaining popularity as That doesn’t mean that sustainability is going out
well, including ‘natural’ and ‘additive free’. Despite the of style. With more products entering the scene, it’s
increase in new sustainable goods, fewer have floated become more difficult to capture large sales volumes.
to the top. In 2017 just 7% of the top 30 launches were However, there are a few examples of success. When
sustainable products compared to 13% in 2016. supported by strong execution and marketing, leading
innovations saw sales growth rates rise anywhere from
53% to 120% after their first year.
NATURAL’S SHARE OF ‘TOP PERFORMING’
INNOVATIONS SHRINK IN FRANCE
% O F T O P P E R F O R M I N G I N N O VAT I O N S T H AT A R E N AT U R A L
TOP PERFORMING 2016 SUSTAINABLE INNOVATIONS WON
WITH STRONG CONCEPTS AND EXCELLENT EXECUTION
SUSTAINABLE OTHER YEAR TWO SALES VERSUS YEAR ONE
13%
SODEBO MON
ATELIER SALADES +53%
2016 ORANGINA MAY TEA +54%

87%
HERTA LEBON VEGETAL +128%
7%
2017
93%
Source: Nielsen ScanTrack - January 2018 Source: Nielsen ScanTrack - January 2018
SUSTAINABILITY LESSON FROM FRANCE
WHERE SUSTAINABILITY IS GAINING STEAM, THE LANDSCAPE IS BECOMING
MORE COMPETITIVE. THIS IS MAKING IT HARDER FOR NEW INNOVATIONS TO
BREAK THROUGH THE CLUTTER AND CAPTURE A BIGGER SLICE OF SALES.
BRANDS LOOKING TO MAKE THEIR MARK IN THIS SPACE MUST INVEST IN TESTING TO
REFINE THEIR CONCEPT, IDENTIFY THEIR DIFFERENTIATION POINTS AND BUILD IN
LONG-TERM SUPPORT FOR ITS NEW LAUNCHES.
WHETHER YOU’RE PRIVATE LABEL OR PREMIUM, YOU WILL NEED TO RE-EVALUATE YOUR
EXECUTION STRATEGY AND LOOK AT NEW WAYS TO CAPTURE SALES THROUGH
PRICE, PROMOTION AND ENGAGEMENT.
U.S.
FMCG SUSTAINABLE
SPECIFIC-SUSTAINABILITY IS KEY IN
SATURATED AND DISCERNING MARKETS
GOVERNMENT CORPORATE ECONOMIC POLLUTION
The United States presents a unique, but sizeable, Compared to global respondents, surveyed Americans
sustainability opportunity. On one hand, it is a country are less likely to say it’s extremely or very important
marked with strong corporate responsibility participation, that companies implement programs to improve the
an increase in ‘challenger’ brands adopting socially-charged environment (68% vs 81%) or that they’ll change their own
advertising, and vocal consumer activists. On the other consumption habits to reduce their environmental impact
hand, it is consistently rated below its economic peers (48% vs 73%). However, sustainably-minded consumers still
in sustainability indices, particularly when it comes to make up a significant portion of the population and sales
sustainable agriculture, climate change and inequalities. say consumers are committed to buying specific types of
U.S. consumers worry about the economy and their sustainability.
own health, which manifests itself in the interesting
contradiction of spending on premium fresh products and
private label. In this market, the FMCG industry’s recovery
has been rocky and manufacturers and retailers are feeling TWO-THIRDS (68%) OF SURVEYED AMERICANS
the pressure of consumers’ tightening belts.
SAY IT’S EXTREMELY OR VERY IMPORTANT THAT
COMPANIES IMPLEMENT PROGRAMS COMPARED
TO 81% OF GLOBAL RESPONDENTS
THERE IS A SIGNIFICANT U.S. Millennials are far more likely to be sustainably-minded than
GENERATIONAL DIVIDE their older cohorts. Millennials are already coming into their
own as an up-and-coming economic powerhouse, which means
companies that embody their compassionate views have an
IN THE U.S. WHEN IT COMES TO SUSTAINABILITY. opportunity to build a strong relationship on the ground floor.
MILLENNIALS ARE THE FUTURE OF SUSTAINABILITY IN THE U.S

I T I S E X T R E ME LY OR V E R Y IMP OR TA N T F OR ME T H AT C OMPA NIE S I DE F INI T E LY OR P R OB A BLY W IL L C H A NGE M Y P UR C H A S E /
IMP L E ME N T P R O GR A M S T O IMP R O V E T HE E N V IR ONME N T C ON S UMP T ION H A BI T S T O R E DUC E M Y IMPA C T ON T HE E N V IR ONME N T
83%
81%
GLOBAL AVERAGE 75%
GLOBAL AVERAGE
66% 62% 73%
46%
34%
MILLENNIALS GEN X BABY BOOMERS MILLENNIALS GEN X BABY BOOMERS

21-34 35-49 50 - 64 21-34 35-49 50 - 64
Source: The Conference Board® Global Consumer Confidence Survey conducted in collaboration with Nielsen Q2 2017
SUSTAINABILITY CLAIMS OUTPACE TOTAL U.S. FMCG
L E V E L S OF C L E A N L A BE L A ND F OOD & BE V E R A GE S S A L E S GR O W T H V S YA
Surveyed Americans showed the

highest levels of concern about
water pollution and pesticide CONVENTIONAL -0.3%
use. At the intersection between
healthy for me and healthy for
the world, this translates into
a strong desire for ingredient NO ARTIFICIALS
transparency, support of plastic
initiatives, and organic and
FREE FROM ARTIFICIAL COLORS / FLAVORS
/ PRESERVATIVES / SWEETENERS, +1.2%
natural products. HORMONES & ANTIBIOTICS
In fact, all measured levels of

sustainability and transparency CLEAN
are outpacing the sales of MEETS ‘NO ARTIFICIAL’ REQUIREMENTS,
PLUS CONTAINS NONE OF THE ‘NO NO’ LIST +1.2%
conventional products across the OF INGREDIENTS DEFINED BY NIELSEN
board.
SIMPLE <10
MEETS ‘CLEAN’ REQUIREMENTS PLUS
HAS LESS THAN 10 INGREDIENTS, ALL +1.0%
OF WHICH ARE RECOGNIZABLE
SUSTAINABLE
MEETS ‘SIMPLE <10 REQUIREMENTS’, +7.2%
PLUS HAS A SUSTAINABILITY CLAIM
Source: Nielsen Product Insider, powered by Label Insight, 52 weeks ending 4/29/2017
Digging deeper into these claims, we see organic and natural As the natural and organic claims hit their mainstream
products’ dollar sales are up 12% and 7.3%, respectively, stride, consumers are beginning to search for more clarity
versus the year prior for the period ending in February around sustainability messaging.
2018. Price and accessibility play a major part in this growth.
In the U.S., organics are found in nearly every channel It’s no longer enough to say something is recyclable, when
from warehouses to value grocery chains. The markup for consumers know that many recyclable items still end up
organics can vary from 122% for eggs to 43% in pasta sauce, in landfills and oceans. Instead, they want to know how
but store brands are undercutting national brands with recyclable your product is.
cheaper alternatives.
ORGANIC PRICES ARE SIGNIFICANTLY HIGHER IN THE U.S.

% P R ICE DIF F E R E NCE F R OM NON - OR G A NIC
+122% +87% +78% +55% +43% +41% +40% +20%
EGGS MILK YOGURT LOTION PASTA ICE VITAMINS BABY

Source: Nielsen Answers On Demand, 52 Weeks Ended 8/26/2017
SAUCE CREAM FOOD
CONSUMERS WHO SEE ORGANIC STORE BRANDS ON SHELVES NEXT TO PRICIER SARAH SCHMANSKY
BRAND NAME ORGANICS OF THE SAME PRODUCT TYPE HAVE STARTED TO ASK VICE PRESIDENT
THEMSELVES WHAT ‘ORGANIC’ MEANS TO THEM. THE DEFINITION OF ORGANIC FRESH / H&W GROWTH
CAN VARY GREATLY BETWEEN PRODUCT CATEGORIES, LEADING CONSUMERS & STRATEGY
TO CONSIDER OVERALL SUSTAINABILITY MESSAGING, VERSUS AUTOMATICALLY NIELSEN
ACCEPTING THAT THEY NEED TO PAY MORE SPECIFICALLY FOR ‘ORGANIC’ LABELS.
TOP THREE GROWING GR A S S- F E D 24%
Nuance can be an incredibly important differentiator
for consumers in markets like the U.S.. Recent Nielsen
AND SHRINKING F R E E- R A NGE 22%
Product Insider figures for animal welfare claims SUSTAINABILITY B - C OR P OR AT ION 15%
showed that “farm raised” and “farmed seafood” CLAIMS IN THE U.S. 0%
categories saw declines of -19% and -4% respectively, R E C Y C L A BL E
H E A LT H Y F O R M E A N D
while “grass fed” (+24%), “free range” (+22%) and H E A LT H Y F O R T H E -4%
WORLD CL AIM FA R ME D S E A F O OD
“dolphin safe” (+4%) saw major growth.
-19% FA R M R A I S E D
Source: Nielsen Product Insider, powered by Label Insight, 52 weeks ended March 31 2018
Consumer demand for specific sustainability is even

louder across the aisle in beauty care. Paraben free
U.S. BEAUTY CARE CONSUMERS CELEBRATE
dominates beauty care, particularly in cosmetics and SPECIFIC SUSTAINABILITY
facial skin care. Here it accounts for more than half of $ SHARE OF INGREDIENT IN CATEGORY AND SHIFT FROM 2015 TO 2017
sales and has grown over 6 pts in the last two years.
“Natural” cosmetics is a bit too opaque for true beauty
users and sales declined -1.2% between December 2017
and 2016, while paraben-free cosmetics grew 2.3%. 33% CLEAN +1.0 PT
GROCERY LABEL SHIFT 67% CONVENTIONAL
FREE FROM PARABENS BOOSTS COSMETICS SALES IN U.S.

% CHANGE IN SALES 2016 - 2017
65% PARABEN-FREE +6.7 PT 35% CONTAINS
SHIFT PARABENS
COSMETICS -0.9% COSMETICS
NATURAL -1.2% FACIAL +6.1 PT 41% CONTAINS

59% PARABEN-FREE
COSMETICS SKIN CARE SHIFT PARABENS
COSMETICS FREE 2.3%

FROM PARABENS
Source: Nielsen Wellness Track & Product Insider, powered by Label Insight, 52 weeks ending December 30, 2017 *Natural Cosmetics are those with Source: Nielsen Product Insider, powered by Label Insight, 52 weeks ending December 30 2017 *Includes products that are rated Clean Label or above.
Natural Cosmetic claims
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Nielsen (US),(US),
Company LLC.LLC.
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All Rights Reserved.
SUSTAINABILITY LESSON FROM THE U.S.
IN MARKETS WHERE THE BROADER SUSTAINABILITY CLAIMS ARE NOW UBIQUITOUS,
CONSUMERS WANT COMPANIES TO GET MORE SPECIFIC. THEY KNOW WHAT THEY’RE
LOOKING FOR - OR RATHER NOT LOOKING FOR. THEY’RE GETTING EDUCATED, READING
LABELS AND GROWING INCREASINGLY CRITICAL OF QUESTIONABLE INGREDIENTS.
COMPANIES NEED TO TRULY UNDERSTAND WHAT CONSUMERS CARE ABOUT, AS

IT RELATES TO THEIR PRODUCT AND CATEGORY, AND REFINE THEIR MARKETING
AND CLAIMS TO CLEARLY COMMUNICATE THEIR SUSTAINABILITY APPROACH.
BUT IT’S NOT ALL MARKETING - EMBED SUSTAINABILITY CONSIDERATIONS

INTO EACH STEP OF YOUR PRODUCT CREATION AND GROWTH STRATEGY IN
ORDER TO RESONATE WITH CONSUMERS IN A TRULY AUTHENTIC WAY.
ADDITIONALLY, KNOWING WHO’S MOVING THE SUSTAINABILITY LANDSCAPE IS CRITICAL.

IN SOME MARKETS THERE’S A CLEAR GENERATIONAL DIVIDE. FIND PEOPLE WHO WILL
ACT AS THE FIRST ADOPTERS, AND BRING SUSTAINABILITY TO THE MAINSTREAM.
CHINA
MAKE A PREMIUM APPEAL IN MARKETS WHERE
SUSTAINABILITY IS URGENT AND ON THE UPSWING
China is the world’s biggest energy consumer with Retail consumption, particularly of premium goods,
significant pollution challenges, especially when it comes remains the primary economic driver, giving Chinese
to air quality. But recently, the government has doubled consumers significant influence. At the shelf, healthier,
down on sustainability initiatives — from curbing coal-fired high-quality products that enable them to lead better lives
power plants to investing in green technology. are getting more attention.
In 2016, only 10% of Chinese companies had corporate
social and environmental initiatives according to the
CHINESE CONSUMERS CRAVE SUPER PREMIUM AND PREMIUM PRODUCTS
corporate sustainability consulting firm SynTao. Just one PRICE TIER VALUE SHARE OF TOP 100 INNOVATIONS MEASURED
IN HYPERMARKETS AND SUPERMARKETS
year later, Bloomberg data showed the ESG-reporting
corporations in the top tenth percentile were already
seeing a big upside, gaining 33% and outperforming the 11%
Hang Seng China Enterprises Index by 17 percentage SUPER PREMIUM
points. 25%
PREMIUM
During this same time period, Chinese consumer MAINSTREAM
confidence, willingness to spend, and eco-mindedness also
grew. In fact, 41% of consumers say they want eco-friendly VALUE
products. This new mindset plus government incentives 35%
has sent the sales of new energy vehicles soaring to
138.4% year over year as of April 2018 according to the 29%
China Association of Automobile Manufacturers (CAAM).
Source: Nielsen BASES Database Meta-Analysis / RA Data
Healthy is intersecting with NATURAL AND ORGANIC ARE TOP HEALTHY FOOD ATTRIBUTES IN CHINA
sustainability, sending W H AT M A K E S F OOD HE A LT H Y ? T OP AT T R IB U T E S A S S O C I AT E D W I T H HE A LT H Y F O OD S
consumers reaching for products
with natural ingredients or
no additives and organic
certifications. NATURAL INGREDIENTS / NO ADDITIVES 54%
China’s consumers are GREEN / ORGANIC CERTIFICATION 48%
associating these healthy and
sustainable attributes with THE BRAND IS HEALTHY FOR ME 46%
premium indicators: superior
functionality (health) and BENEFICIAL INGREDIENTS 42%
high-quality ingredients. In an
environment where expectations
Source: China Consumer Confidence Surveys Q3 2017
for premium products have

grown across the board, these
two factors remain the most EXPECTATIONS FOR PREMIUM PRODUCTS GROW IN CHINA
important. T O P F I V E AT T R I B U T E S T H AT M A K E A P R O D U C T P R E M I U M I N C H I N A
2016 2018
60%
53% 56% 52% 51%
51%
43% 44% 47% 50%
SUPERIOR FUNCTION HIGH QUALITY MATERIALS SUPERIOR CUSTOMER WELL-KNOWN OR SUPERIOR STYLE
OR PERFORMANCE OR INGREDIENTS SERVICE TRUSTED BRAND OR DESIGN
Source: The Conference Board® Global Consumer Confidence Survey conducted in collaboration with Nielsen Q2 2018, Q1 2016.
Copyright ©
Copyright © 2018
2018 The
The Nielsen
Nielsen Company
Company (US),
(US), LLC.
LLC. All
All Rights
Rights Reserved.
Reserved.
Healthy and green products—a small but mighty population—are driving growth across categories and
commanding a higher price. A prime example is super premium facial care, which is personal care’s fastest
growing and largest price segment. Here, natural ingredients are the second most preferred ingredient,
comprising of 23% of value share. This is quickly becoming a competitive space, with new launches in personal
care accounting for 40% value growth in personal care.
CHINA’S SUPER PREMIUM FACIAL CARE GROWS ALONGSIDE NATURAL

OF F L INE VA L UE S H A R E A ND GR O W T H R AT E B Y P R IC E T IE R INGR E DIE N T VA L UE S H A R E IN S UP E R P R E MIUM FA C I A L C R E A M
NON-PREMIUM PREMIUM SUPER-PREMIUM GROWTH RATE NON-PREMIUM PREMIUM SUPER-PREMIUM
19%
0% 46% 45% +1%
42%
25% +6%
+7% 27%
+21% 26% 39% +24% 35%
PERSONAL CARE FACIAL CARE

Source: Nielsen RMS MAT June 2018, Top 100 selling items with price index above 200, Nielsen Online TSI
This trend has repeated itself in

INFANT FOOD SUPPLEMENT INFANT FORMULA
baby care. Again, organic is small
but swiftly growing, by 53% and CHINA’S ORGANIC BABY FOOD 31% 19%
49%, respectively, in infant food GROWTH IS BOOMING
supplements and formulas. Organic
baby cereal with multiple organic
ingredients is seeing similar trends
VA L U E C O N T R I B U T I O N A N D G R O W T H R AT E
FOR MIDDLE AND HIGH PRICE TIERS
+53%
GRO W T H
+49%
GRO W T H
ORGANIC NON-ORGANIC 69% 81%
and growing in the double digits. Source: Nielsen RMS MAT August 2017, Nielsen E-Commerce Tracking
SUSTAINABILITY LESSON FROM CHINA
IN MARKETS WHERE CONSUMERS ARE QUICKLY GAINING AFFLUENCE AND ARE LOOKING
FOR WAYS TO MAKE THEIR LIVES BETTER, “HEALTHY FOR ME AND HEALTHY FOR THE
WORLD” PRODUCTS PROVIDE AN EXCELLENT OPPORTUNITY FOR PREMIUMIZATION.
TO DO THIS, COMPANIES MUST CONNECT SUSTAINABILITY FACTORS TO

PREMIUMIZATION INDICATORS THAT APPEAL MOST TO THESE CONSUMERS.
BEING QUICK TO MARKET, BUT WITH A QUALITY PRODUCT, IS IMPORTANT TO BEING

ABLE TO MAXIMIZE THE GROWTH OPPORTUNITY BEFORE THE SPACE BECOMES
TOO CROWDED.
AS COMPETITORS FLOCK TO THE SUSTAINABILITY SPACE, BRANDS NEED TO KEEP

EXECUTION TOP OF MIND AND EVOLVE AS THEIR CONSUMERS DO IN ORDER
TO STAY RELEVANT.
INDIA
KEEP IT SIMPLE IN NEW SUSTAINABILITY MARKETS: BE AVAILABLE ON
SHELVES AND HELP CONSUMERS SEE THEMSELVES IN SUSTAINABILITY
According to the World Health Organization, India is home Retail consumption, particularly of premium goods,
to 11 out of 12 of the cities with the highest air pollution in remains the primary economic driver, giving Chinese
the world. While the government has started to take steps consumers significant influence. At the shelf, healthier,
to reduce both air and water pollution, even mandating high-quality products that enable them to lead better lives
that companies above specific fiscal benchmarks must are getting more attention.
donate 2% of their net profits to charities, it still ranks low
on food sustainability and sustainable agriculture practices INDIA’S MODERN TRADE GROWTH CONTINUES TO OUTPACE TRADITIONAL TRADE
in global indices. TOTAL FMCG MODERN TRADE TRADITIONAL GROCERY
TRADITIONAL CHEMIST OTHER TRADITIONAL
Indian consumers have been emboldened by the recent
positive economic environment, discounts and promotions, VALUE CONTRIBUTION GROWTH RATE
and have provided a boost to the FMCG market. With
their standard of living improving, they are seeking out
more premium goods and products that are personally 10% 9% 11.6%
and environmentally safer. In fact, global warming is 8%
consistently one of the top three concerns for Indian 20.0%
consumers, behind job security and the economy. Modern
11.0%
trade channels, like supermarkets and hypermarkets,
are offering a wider variety of goods, and allowing Indian 8.4%
consumers to express themselves in the products they 29%
purchase. While modern trade currently only represents 73% 12.0%
9% of the Indian channel mix, it is growing nearly twice as
fast as the traditional competition. Source: Quarter By Numbers Q2 2018 Report, Retail Measurement Service
The personal care category in
India shows one way that its INDIA’S NATURAL PERSONAL CARE MARKET IS GROWING
consumers are demonstrating
a personal commitment to
TWICE AS FAST, DESPITE A PRICE INCREASE
sustainability in the products % VA L UE C ON T R IBU T ION OF N AT UR A L S T O P E R S ON A L C A R E
they buy. Despite significant NATURAL PERSONAL CARE NON-NATURAL PERSONAL CARE
price increases in the category
at the time, in March 2018, year
over year sales growth in natural
products (+19.6%) far outpaced
non-naturals (+7.6%). Volume 35%
sales of natural products were
unaffected by this price increase,
growing 13.1% compared to
non-natural’s 1.2%, underscoring 65%
consumers’ monetary
commitment to sustainable
products.
N AT UR A L S P E R S ON A L C A R E GR O W T H NON - N AT UR A L S P E R S ON A L C A R E GR O W T H I S
DR I V E N B Y V OL UME L E D B Y P R IC E , V OL UME A R E S TA G N A N T
13.1% 1.2%
3.6%
1.3% 6.3%
4.6% 5.8% 2.7%
2017 2018 2017 2018
VOLUME GROWTH PRICE GROWTH
Source: Nielsen Retail Audit All India Urban and Rural 12 Months Ending March 2018. Natural Segment is defined by adding Sub brands in with a basic natural proposition for Face Care, Hand & Body,
Shampoo, TP & TS category
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Copyright © 2018
2018 The
The Nielsen
Nielsen Company
Company (US),
(US), LLC.
LLC. All
All Rights
Rights Reserved.
Reserved.
LOCAL COMPANIES As a result, their products have grown to make up 81% of the naturals
market. Recently, many multinational companies have launched line
extensions in the market, but core natural brands are seeing double the
IN PERSONAL CARE HAVE BEEN growth of line extensions.
QUICK TO CAPITALIZE ON THEIR In the past two years, local Indian and global multinational companies have
experienced a parallel value growth trajectory in the naturals category, but
SUSTAINABLY-MINDED CONSUMERS. local companies have been able to grow to a much higher rate, comparatively.
LOCAL INDIAN COMPANIES DOMINATE NATURAL PERSONAL CARE SHARE AND GROWTH
VA L UE C ON T R IBU T ION T O N AT UR A L P E R S ON A L C A R E IN INDI A VA L UE GR O W T H T O N AT UR A L P E R S ON A L C A R E IN INDI A
22.7%
22.70%
2016 78% 22%
12.1% 12.2%
2017 80% 20%
1.7%
2018 81% 19%
2017 2018
Source: Nielsen Retail Audit All India Urban and Rural ending March 2016, 2017, 2017 Moving Annual Total (MAT). Natural Segment is defined by adding Sub brands in with a basic natural proposition for Face Care, Hand & Body, Shampoo, TP & TS category
SUSTAINABILITY LESSON FROM INDIA
SUSTAINABILITY PROVIDES AN IMMENSE OPPORTUNITY FOR GROWTH IN MANY
EMERGING MARKETS.
AS THE STANDARD OF LIVING IMPROVES, CONSUMERS ARE EAGER FOR BETTER,

HEALTHIER PRODUCTS. THIS IS ESPECIALLY TRUE IN REGIONS WHERE POLLUTION
LEVELS ARE HIGH AND ARE HAVING A DIRECT IMPACT ON CONSUMER HEALTH.
GLOBAL MULTINATIONALS MUST BE QUICK SO AS NOT TO MISS THIS OPPORTUNITY AND

UTILIZE THEIR EXISTING ADVANTAGES IN SCALE, DISTRIBUTION AND MARKETING. THESE
COMPANIES SHOULD ALSO CONSIDER THE AUTHENTICITY AND CREDIBILITY OF A LINE
EXTENSION OVER A PURELY SUSTAINABLY-FOCUSED BRAND.
LOCAL BRANDS, WITH THEIR PULSE ON THE CONSUMER, CAN QUICKLY CAPTURE THE
SUSTAINABILITY MARKET BY LEANING ON THEIR SPEED AND MARKET KNOWLEDGE. IF
THESE COMPANIES CAN STRIKE QUICKLY, WHILE THE MARKET IS HOT, THEY TAKE
ADVANTAGE OF THE BIG GROWTH GAINS. TO STAY COMPETITIVE, THEY’LL NEED TO
ENSURE THEIR PRODUCT MAINTAINS ITS QUALITY AND INTEGRITY, AS WELL AS CONTINUE
TO SUPPORT THESE PRODUCTS WITH THE RIGHT EXECUTION AND MARKETING.
THESE CASE STUDIES HIGHLIGHT THAT AROUND THE WORLD, THE PUSH FOR SUSTAINABILITY REMAINS STRONG, ESPECIALLY AT THE
HEART OF WHAT’S HEALTHY FOR CONSUMERS AND HEALTHY FOR THE WORLD. THE ENTRY POINT FOR NEARLY EVERY MARKET LARGELY
LEADS WITH NATURAL AND ORGANIC INGREDIENTS AND CERTIFICATIONS, THEN BECOMES MORE SPECIFIC AND FRAGMENTED.
Companies that hope to succeed should start by identifying the existing level of market saturation in these products
and the level of scrutiny placed on them by consumers.
In sustainably sophisticated markets, companies must focus on fine-tuning their product in order to stand out and
support these new innovations with the right marketing and promotions. What clicks for these consumers will vary
based on their current economic standing and sustainability mindset.
In developing markets, sustainable efforts are still in their relative infancy, and consumer demands aren’t nearly as
nuanced. This presents a golden opportunity for companies to build trusted relationships with consumers who care,
and develop loyalty to reap long-term benefits as they continue on the path of environmental responsibility.
GETTING STARTED AS MARKETS ADVANCE
NEW INTEREST IN NEW AFFLUENCE DRIVES PRODUCT LANDSCAPE CONSUMERS SEEK OUT
SUSTAINABILITY SUSTAINABILITY BECOMES MORE SPECIFIC SUSTAINABILITY
DELIVERS HIGH GROWTH PREMIUMIZATION CLUTTERED
• INVEST IN INNOVATION TESTING

• BE QUICK TO MARKET—KEEPING QUALITY IN MIND— TO MAXIMIZE GROWTH
• SUPPORT LAUNCHES WITH THE RIGHT EXECUTION
• TIE SUSTAINABILITY FACTORS TO PREMIUMIZATION FACTORS
• UNDERSTAND WHICH CONSUMERS ARE DRIVING DEMAND & CUSTOMIZE MESSAGES
TO WIN, CONNECT THE DOTS ACROSS HEALTHY, SUSTAINABLE, GOVERNMENT REGULATIONS,

CORPORATE INVOLVEMENT, ECONOMIC SITUATION AND POLLUTION IMPACT.
GLOBAL POLLUTION
IS REACHING A CRISIS POINT THE WORLD HEALTH
ORGANIZATION (WHO)
Why are consumers in markets big and small increasingly challenged ESTIMATES THAT 12.6
to be more environmentally conscious and to exercise their power and
voice through the products they buy? Why do these shifts feel so urgent? MILLION PEOPLE DIE FROM
There is mounting evidence to support that in many parts of the world,
sustainability has become a life and death matter.
ENVIRONMENTAL HEALTH
Health issues like asthma and typhoid have been linked to deteriorating
RISKS ANNUALLY, AND THAT
air and water quality, and in extreme cases, decreased brain function
and death.
ENVIRONMENTAL FACTORS
IN DEVELOPING COUNTRIES
NINE-IN-TEN PEOPLE AROUND THE WORLD ARE CURRENTLY CARRY ROUGHLY 25% OF
BREATHING IN HIGHLY POLLUTED AIR ACCORDING TO THE WORLD THE DISEASE BURDEN.
HEALTH ORGANIZATION.
In fact, outdoor air pollution is believed to contribute to 4.2 million
deaths every year, with people in emerging countries from South-East
Asia and Eastern Mediterranean regions bearing the brunt of the impact.
THE IMPACT OF SIGNIFICANT AIR POLLUTION IS SEEN AROUND THE WORLD
NUMBER OF DEATHS
> 20,000
NO DATA AVAILABLE
NOT APPLICABLE
Source: The World Health Organization, 2016. Age-standardized mortality rate per 100’000 capita
Water pollution levels tell a similar story. The UN World Water Assessment Programme estimates that 80% of
global wastewater goes untreated, carrying pollutants that range from animal waste and toxic chemicals to plastic.
Again, residents in low- and lower-middle income countries carry the greatest risk to exposure, due to faster
population and economic growth, and the lack of wastewater management systems.
While there are many sources of water pollution -- industrial agriculture and single-use plastics are the two
most notable pollutants driving today’s consumer sustainability trends, particularly in the fast-moving consumer
goods industry. Consumers are becoming more aware of the extent that agro-pollutants such as livestock waste,
pesticides and nitrates, and antibiotics are contaminating their water sources, the associated health impacts, and
the challenges with managing these pollutants once they get into waterways.
GOVERNMENT REGULATIONS IN PLAY
Governments are waking up to the impact of environmental pollution, motivated by the real costs to its citizens
and economic burden it places on healthcare systems, basic infrastructure, and agricultural output and economic
development. The World Bank estimates that air pollution cost the global economy $5.7 trillion USD in 2016.
Environmental protection initiatives aren’t new, but they are capturing more global attention than ever, specifically
when it comes to plastics. Countries around the world have decided to tackle plastic pollution by either banning
or taxing single-use plastics. Common initiatives range from proactive (investing in better waste management,
mobilizing citizen clean-up days, and creating alliances with corporations) to reactive (publishing industry pollution
ratings, fines, jail time). While the upside is big, companies with industrial-based economies must weigh the
economic productivity that comes from their heaviest polluting industries with their pollution discharge.
PLASTIC
BANS ARE
GROWING
GLOBALLY
TOTAL BAN
TAX
PARTIAL BAN OR TAX
Source: Reuters, SBS News, The Earth Day Network https://
www.earthday.org/plasticban/ , Reusethisbag.com, and other
public sources.
FOR SOME
Australia was able to reduce their plastic waste by a third and China
saw a two-thirds drop in plastic bag usage. Taxes have also proved
successful for some countries, such as the UK which saw an 80%
COUNTRIES, THE reduction in plastic bag consumption.

But the success story isn’t always straightforward. When a
INITIATIVES ON ban went into effect in the Indian state of Maharashtra, where
Mumbai is located, it reportedly caused more than 300 plastic bag
PLASTIC BAGS HAVE manufacturers to close. Public and industry support, buy-back
incentives, sufficient warning and money for effective enforcement
are all necessary for initiatives like this to succeed. Companies that
BEEN PARTICULARLY are able to maintain an open dialogue with governments around
sustainability can help shape policies in ways that benefit everyone.
EFFECTIVE. While plastic isn’t the largest contributor to water pollution, it has
high levels of consumer support, and many alternative solutions.
AMONG PLASTICS, PACKAGING IS THE LARGEST OVERALL

CONTRIBUTOR AT 36% OF THE 400 MILLION TONS OF PLASTICS
PRODUCED EACH YEAR, ACCORDING TO RESEARCH PUBLISHED
BY THE AMERICAN ASSOCIATION FOR THE ADVANCEMENT OF
SCIENCE.
A growing number of countries are implementing bans and taxes,
and while they may prove effective in reducing waste, how does it
impact the retail landscape? And who pays?
WHO PAYS? TAXES, PARTIAL AND BROAD BANS
Many plastic bans focus on reducing
or eliminating plastic bags or at least
non-recyclable “thin” bags, putting the
responsibility on retailers. In regions
with a large percentage of traditional
trade such as kiosks and small mom- PARTIAL PLASTIC / BROAD SINGLE-USE TAX ON
and-pop run stores it can be difficult BAG BAN PLASTIC BAN PLASTICS
and expensive for governments
to enforce the bans and penalties.
When these measures are rolled
out too quickly, especially without
retailer buy-in, it can cause impacted
companies to feel uneasy that they’ll
see a drop in customers.
Broader plastic bans impact more RETAILER MANUFACTURER
ACTIONS ACTIONS
than retailers, as manufacturers are
required to invest in new suppliers Re-evaluate manufacturer Change suppliers
and packaging reformulations. relationships & store format
Sometimes, these added costs are

Sell alternative containers
passed down to the consumer. and / or allow consumers Reformulate packaging
to bring own containers
Similarly, when manufacturers are
taxed, those costs are typically passed
Pass on cost / price Pass on cost / price
on to the consumer, either directly or increases to consumers increases to consumers
indirectly.
CONSUMERS PAY
BE PREPARED FOR CHANGE
WHICHEVER STRATEGY GOVERNMENTS CHOOSE TO ADOPT, IT’S CLEAR THE PATH
TOWARDS LESS RELIANCE ON PLASTIC REQUIRES INVESTMENT IN NEW ALTERNATIVES,
PACKAGING DESIGN FOR MANUFACTURERS AND NEW BUSINESS MODELS AND STANDARDS
FOR RETAILERS. SOMETIMES GOVERNMENT INITIATIVES COME SWIFTLY, OTHER TIMES
THERE’S A LONG RUNWAY TO PLAN.
EITHER WAY, CHANGE IS SWEEPING IN AND COMPANIES SHOULD PLAN NOW TO AVOID
BEING CAUGHT OFF GUARD.
SMALLER COMPANIES WILL HAVE AN ADVANTAGE HERE DUE TO THEIR SMALLER SUPPLY
CHAIN, AGILITY, AND FEWER NUMBER OF MARKETS. BUT LARGE COMPANIES HAVE
THE BENEFIT OF LARGER RESEARCH AND DEVELOPMENT BUDGETS AND CAN ACHIEVE
GREATER ECONOMIES OF SCALE WITH ALTERNATIVE SOLUTIONS.
YOUR GUIDE TO SUCCESS
THROUGH SUSTAINABILITY SUSTAINABILITY IS PERSONAL
FOR CONSUMERS, WHICH IS
Corporate responsibility and sustainability strategies may take different
WHY HEALTHY FOR ME AND
shapes around the world, but one thing is clear: consumers are using
their spending power to effect the change they want to see.
HEALTHY FOR THE WORLD
CLAIMS DO SO WELL. BY
This isn’t a trend a company can simply side-step. Sooner or later,
whether through government regulation, sheer force of nature, or public
IDENTIFYING AN OPPORTUNITY
outcry, companies will need to respond. No matter what market you’re in, TO BE MORE SUSTAINABLE,
connecting sustainability factors to how it impacts consumers is the key. AND IMPLEMENTING A
When building an approach to corporate responsibility and sustainability, REASONABLE PLAN OF
companies must understand how each factor plays into a consumers’ ACTION TO ACCOMPLISH
mindset and the sustainability sophistication of their market.
IT, COMPANIES ACHIEVE AN
AUTHENTICITY THAT PAID
E ABIL
ENC ITY ADVERTISING CAN’T BUY.
UTION CRISIS
ENI
CORPORATE GOVERNMENT
TO S
CONV
INVOLVEMENT ACTION SUSTAINABILITY PEND CRYSTAL BARNES,

SVP, GLOBAL RESPONSIBILITY
LANDSCAPE & SUSTAINABILITY
L
CONSUMER
L
SS
NIELSEN
O
ENE
PRI
P
DEMAND R CE
AWA
WHERE THE SUSTAINABILITY PRODUCT LANDSCAPE IS LESS DEVELOPED, COMPANIES THAT ESTABLISH
THEMSELVES EARLY CAN BECOME SUSTAINABILITY CHAMPIONS, WHICH COULD GIVE THEM A LEG UP BEFORE
THE MARKET BECOMES MORE CROWDED. WHILE INTEREST MIGHT BE NEW, THESE CONSUMERS ARE QUICKLY
BECOMING HYPER-AWARE OF THE IMPACTS OF POLLUTION AND ARE DEMANDING STRONGER, MORE AGGRESSIVE
ACTION FROM THEIR COMPANIES AND GOVERNMENTS.
IN COUNTRIES WHERE “ORGANIC,” “NATURAL” AND “ARTIFICIAL-FREE” ARE BECOMING COMMONPLACE TERMS,
CONSUMERS WILL START ASKING “WHAT DO YOU MEAN?” AND LOOKING FOR MORE CLARITY IN THESE CLAIMS.
GETTING STARTED AS MARKETS ADVANCE
NEW INTEREST IN NEW AFFLUENCE PRODUCT LANDSCAPE CONSUMERS SEEK OUT

SUSTAINABILITY DRIVES BECOMES MORE SPECIFIC
DELIVERS HIGH SUSTAINABILITY CLUTTERED
GROWTH PREMIUMIZATION SUSTAINABILITY
• BE QUICK TO MARKET—KEEPING QUALITY IN MIND— TO MAXIMIZE • INVEST IN INNOVATION TESTING

GROWTH • SUPPORT LAUNCHES WITH THE RIGHT EXECUTION
• TIE SUSTAINABILITY FACTORS TO PREMIUMIZATION FACTORS • UNDERSTAND WHICH CONSUMERS ARE DRIVING DEMAND & CUSTOMIZE
MESSAGES
HERE ARE A FEW RECOMMENDATIONS TO HELP YOUR BRAND WIN IN
THIS EVOLVING SUSTAINABILITY SPACE.
IN THE SHORT TERM: LONGER TERM:
nn Understand the impact of ingredients and the level of nn Invest in product development, testing and research.
scrutiny that consumers apply to the products they As the market becomes more crowded, it’ll take more
purchase. to stand out.
nn Connect the dots between what’s healthy for the nn Support your launch with the right marketing,
environment and healthy for the consumer. promotions and distribution. Bonus: Keep a pulse
on your marketing and fine-tune your messaging in-
nn Communicate the value-add / benefit in your flight.
marketing.
nn Seek to build and grow your sustainability strategy to
nn Incorporate the applicable sustainability claims on encompass every part of the business.
your packaging.
nn Build a roadmap for product enhancements you’d like
to make, whether it’s shifting to more sustainability-
focused suppliers, reducing your use of packaging
materials, or changing the ingredient line-up across
your portfolio.
nn Address consumer skepticism and be wary of
overused labels and claims.
nn Understand that consumers and their expectations
will continue to evolve.
nn Get ahead of government bans and taxes and borrow
successful tactics used in recent sugar and tobacco
reforms.
LEARN FROM OTHER TAX LAWS
IT’S IMPORTANT TO KEEP IN MIND THAT SUSTAINABILITY IS INTRICATELY LINKED
WITH CORPORATE REPUTATION AND AUTHENTICITY. ANY FALSE CLAIMS OR SLOPPY
VENDOR MANAGEMENT CAN RESULT IN A MAJOR SCANDAL AND DAMAGE THE
BRAND’S REPUTATION.
SUGAR TOBACCO
• PLAN FOR BUDGET REDISTRIBUTION • BET ON PREMIUM USERS
• EXTEND SUPPORT TO TRADE • WORK CLOSELY WITH TRADE OUTLETS
• ACTIVE PRICE CONTROL • LAUNCH A MID-PRICE LINE
• INNOVATE IN PREMIUM • LOOK AFTER THE LOW-COST LINE
• RE-EVALUATE THE PORTFOLIO • USE SMALLER PACKS
• REFORMULATE • DELAY TAX IMPLEMENTATION
WHAT DOES THE
FUTURE OF SUSTAINABILITY HOLD?
AS PEOPLE BECOME MORE AWARE OF THE EFFECTS OF POLLUTION ON THEIR BODIES, PRESSURE FOR GOVERNMENTS AND CORPORATIONS
TO DO MORE WILL CONTINUE TO GROW. THE BIGGER THE POLLUTION IMPACT, THE MORE LIKELY IT IS FOR GOVERNMENTS TO LEAN INTO
CORPORATIONS TO SUPPORT AND DRIVE THEIR SUSTAINABILITY INITIATIVES.
THANKFULLY, TECHNOLOGY AND SCIENTIFIC ADVANCEMENTS ARE ENABLING COMPANIES TO BETTER MANAGE THEIR OUTPUTS AND
DESIGN SUSTAINABLE BUILDINGS, FARMS AND PRODUCTS, CHEAPER AND FASTER. HERE ARE A FEW PREDICTIONS FOR THE FUTURE OF
SUSTAINABILITY.
EMERGING MARKET CONSUMERS’ SUSTAINABILITY SAVVY WILL GROW; LOCAL CHALLENGER BRANDS WILL GROW WITH SOCIALLY-CHARGED ADVERTISING
BRANDS WILL USE SUSTAINABILITY AS A VENUE FOR CROSS-BORDER SALES Challenger brands will grow in number and seek to appeal to
In emerging markets, where consumers are demanding a the hearts of consumers through socially-charged advertising.
strong corporate response and have the economic means, These companies must be careful to not overstep the line
we’ll see an exponential rise in demand for sustainable and be seen as capitalizing on human tragedy. Before making
products and sustainable-focused retailers. Fast-acting local their bold statement, they must evaluate and understand the
brands who capitalize on this trend will be well-positioned consumer response at a high level of granularity.
to use these popular products to hop across the border
and grow in similar nearby markets. These consumers SUSTAINABLE COMPANIES WILL GROW IN INFLUENCE
and companies will quickly catch up to more developed Companies that take on sustainability challenges and win
sustainable markets and perhaps even leapfrog over them. will wield more political and cultural influence than ever.
Consumers will reward brands that keep them, their families
SPECIFIC SUSTAINABILITY WILL MORPH INTO PERSONALIZED SUSTAINABILITY and the world safe. Governments will recognize corporations
Specific sustainability will continue to rise and as technology that are driving major change, improving the lives of their
catches up, we’ll see it morph into personalized sustainability. constituents.
Technology will enable consumers to match the right
ingredients to their needs or ailments. Companies will need
to clearly communicate and have the data to prove how their
sustainable factors help consumers.
METHODOLOGY
THE INSIGHTS FROM THIS REPORT USED THE FOLLOWING SOURCES:
Nielsen Sources Third Party Sources
The Conference Board® Global Consumer Confidence Survey China Association of Automobile Manufacturers
conducted in collaboration with Nielsen Q2 2017 & Q2 2018
Economist Intelligence Unit Food Sustainability Index 2017
Chinese Consumer Confidence Survey
Jambeck et al. (2015). Plastic waste inputs from land into the ocean.
Nielsen Product Insider, Powered by Label Insight
R. Geyer, J. R. Jambeck, K. L. Law, Production, use, and fate of all
Nielsen Answers plastics ever made. Sci. Adv. 3, e1700782 (2017).
Nielsen BASES, Nielsen Breakthrough Innovation Reports 2015 - Governance and Accountability Institute, Inc (2017)
2018
FAO, Water, Water, Land and Ecosystems (WLE) Program of the
Nielsen E-Commerce Tracking CGIAR, International Water Management Institute (IWMI) (2018)
More people, more food, worse water? a global review of water
Nielsen Homescan pollution from agriculture
Nielsen Quarter By Numbers Q2 2018 Report Morningstar Sustainability Atlas 2018
Nielsen Retail Audit SDG Index and Dashboards Report 2018
Nielsen Retail Measurement Service The World Bank: Environmental Pollution
Nielsen ScanTrack, Nielsen ScanTrack - HMSM World Bank and Institute for Health Metrics and Evaluation. 2016.
The Cost of Air Pollution: Strengthening the Economic Case for
Nielsen Wellness Track Action. Washington, DC: World Bank. License: Creative Commons
Attribution CC BY 3.0 IGO
World Health Organization: Air pollution
2016. Preventing disease through healthy environments: a global

assessment of the burden of disease from environmental risks /
Annette Prüss-Üstün … [et al]. Link 1; Link 2
WWAP (United Nations World Water Assessment Programme).

2017. The United Nations World Water Development Report 2017:
Wastewater, The Untapped Resource. Paris, UNESCO.
ABOUT NIELSEN
Nielsen Holdings plc (NYSE: NLSN) is a global measurement and data analytics
company that provides the most complete and trusted view available of
consumers and markets worldwide. Our approach marries proprietary Nielsen
data with other data sources to help clients around the world understand
what’s happening now, what’s happening next, and how to best act on this
knowledge. For more than 90 years Nielsen has provided data and analytics
based on scientific rigor and innovation, continually developing new ways
to answer the most important questions facing the media, advertising, retail
and fast-moving consumer goods industries. An S&P 500 company, Nielsen
has operations in over 100 countries, covering more than 90% of the world’s
population. For more information, visit www.nielsen.com.
THE SCIENCE BEHIND WHAT’S NEXT TM

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SUSTAINABLE SHOPPERS

BUY THE CHANGE THEY WISH TO SEE IN THE WORLD

Corporations are stepping Sustainable legislation,

healthier for them and for their homes.

CONSUMER THE GOOD NEWS IS THAT COMPANIES CAN

We will also highlight the forces of change moving

Then we’ll provide strategies for companies that

UNPACKING THE SUSTSAINABILITY LANDSCAPE FINDING SUCCESS THROUGH SUSTAINABILITY

responsibility is shared across gender lines MILLENNIALS 85%

FIVE CURRENT SUSTAINABILITY STRATEGIES FOR RETAILERS AND MANUFACTURERS

4 UPDATE AND / OR CHANGE 5 INTEGRATE SUSTAINABILITY INTO

demand. As consumers weigh the choices in front

of them, they view each new opportunity through

the lens of convenience, price and awareness. R CE

COMES WITH HIGH-QUALITY / SAFETY STANDARDS 49%

PROVIDES SUPERIOR FUNCTION OR PERFORMANCE 46%

CONTAINS ORGANIC / ALL-NATURAL INGREDIENTS 41%

CONTAINS ENVIRONMENTALLY FRIENDLY /

OFFERS / DOES SOMETHING NO OTHER PRODUCT ON

DELIVERS ON SOCIAL RESPONSIBILITY CLAIMS

CRYSTAL BARNES, LANDSCAPE

MINIMUM SALES ACHIEVED

Source: Nielsen Breakthrough Innovation Reports 2015 - 2018

DISTINCT 2016 US 2016 US 2015 INDIA 2016 US

DELIVERED A NEW VALUE

FRANCE The sustainability sophistication of each

U.S. opportunities and challenges.

CHINA to examine where fast-moving consumer

INDIA effective strategies and watch-outs.

SMALL BRANDS 19.4% % VALUE CHANGE % VOLUME CHANGE

ORGANIC NON-ORGANIC PRIVATE LABEL OVERALL ORGANIC PRIVATE LABEL

2016 ORANGINA MAY TEA +54%

MILLENNIALS ARE THE FUTURE OF SUSTAINABILITY IN THE U.S

MILLENNIALS GEN X BABY BOOMERS MILLENNIALS GEN X BABY BOOMERS

Surveyed Americans showed the

In fact, all measured levels of

ORGANIC PRICES ARE SIGNIFICANTLY HIGHER IN THE U.S.

EGGS MILK YOGURT LOTION PASTA ICE VITAMINS BABY

Consumer demand for specific sustainability is even

FREE FROM PARABENS BOOSTS COSMETICS SALES IN U.S.

NATURAL -1.2% FACIAL +6.1 PT 41% CONTAINS

COSMETICS FREE 2.3%

COMPANIES NEED TO TRULY UNDERSTAND WHAT CONSUMERS CARE ABOUT, AS

BUT IT’S NOT ALL MARKETING - EMBED SUSTAINABILITY CONSIDERATIONS

ADDITIONALLY, KNOWING WHO’S MOVING THE SUSTAINABILITY LANDSCAPE IS CRITICAL.

Source: Nielsen BASES Database Meta-Analysis / RA Data

for premium products have

CHINA’S SUPER PREMIUM FACIAL CARE GROWS ALONGSIDE NATURAL

NON-PREMIUM PREMIUM SUPER-PREMIUM GROWTH RATE NON-PREMIUM PREMIUM SUPER-PREMIUM

PERSONAL CARE FACIAL CARE

This trend has repeated itself in

TO DO THIS, COMPANIES MUST CONNECT SUSTAINABILITY FACTORS TO

BEING QUICK TO MARKET, BUT WITH A QUALITY PRODUCT, IS IMPORTANT TO BEING

AS COMPETITORS FLOCK TO THE SUSTAINABILITY SPACE, BRANDS NEED TO KEEP

2016 78% 22%

AS THE STANDARD OF LIVING IMPROVES, CONSUMERS ARE EAGER FOR BETTER,

GLOBAL MULTINATIONALS MUST BE QUICK SO AS NOT TO MISS THIS OPPORTUNITY AND

GETTING STARTED AS MARKETS ADVANCE

• INVEST IN INNOVATION TESTING

TO WIN, CONNECT THE DOTS ACROSS HEALTHY, SUSTAINABLE, GOVERNMENT REGULATIONS,

COUNTRIES, THE reduction in plastic bag consumption.

AMONG PLASTICS, PACKAGING IS THE LARGEST OVERALL

Sometimes, these added costs are

INVOLVEMENT ACTION SUSTAINABILITY PEND CRYSTAL BARNES,