The Hartman Group: Customized Market Research, Insights...

ALISON WORTHINGTONUC DAVIS WORKSHOPMARCH 25, 2009

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Sustainability: The Rise of Consumer Responsibility

The Hartman Group: Customized Market Research, Insights and Consulting

Understanding cultural change that shifts consumer behavior in new directions

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A Deep Well of Consumer Insights in Sustainability

The Redefinition of Quality

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Sustainability Has a History

“Report Says Global Warming Poses Threat to Public Health”—The New York Times

"Most Consumers Say They Would Like More Green Products”—The Financial Times

"More New Alternative Fuel Vehicles Continue to Roll Off US Automaker Assembly Lines” —The Oil & Gas Journal

"Tomorrow's Shade of Green: Environmentally Oriented Construction Materials for the 21st Century” —Home Improvement Market

"Can Retailers Turn Green This Year?” —Marketing Magazine

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Sustainability Has a History

“Report Says Global Warming Poses Threat to Public Health”—The New York Times

"Most Consumers Say They Would Like More Green Products”—The Financial Times

"More New Alternative Fuel Vehicles Continue to Roll Off US Automaker Assembly Lines” —The Oil & Gas Journal

"Tomorrow's Shade of Green: Environmentally Oriented Construction Materials for the 21st Century” —Home Improvement Market

"Can Retailers Turn Green This Year?” —Marketing Magazine

These headlines all occurred between 1996 and 1997!

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Sustainability Is Now Moving Into The Mainstream

Food & Beverages

fresh, local, seasonal, organic, biodynamic

organic baby food

farmers markets, CSA

wild salmon, grass fed beef, free range chicken

Rainforest Alliance, Fair Trade

Sources

writings: Al Gore, Michael Pollan, Marion Nestle, Paul Roberts

food movements: Slow Foods

blogs, groups: Greentopia, Ideal Bite, Grist, Green Festival

lifestyle retailers: Whole Foods, Timberland, IKEA, Am Apparel

Home

natural/organic cleaners

sustainably harvested wood

solar panels

programmable thermostats

green waste recycling

faucet aerators

Personal Goods

baby products

natural /organic skin care

bamboo & organic clothing & bedding

reusable shopping bags

Prius, bus pass, biking

Sigg water bottles

Garden

garden in every school, urban gardening

grow-your-own veggies & herbs

drip irrigation system

ladybugs

native plants

Pet Care

raw foods

organic food

herbals, acupuncture

non-toxic pet grooming products

non-PVC toys

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We Draw Our Conclusions From Two Significant Waves Of Research (conducted in 2007 and 2008)

Qualitative Ethnographic Immersions• Over 150 hours of consumer interviews

» In-depth interviews in homes, social network parties, consumer photo journaling

» Observation of sustainability activities

• Field locations

» In 2007: Chicago, Raleigh, Boston, Newark, Los Angeles, Seattle

» In 2008: Columbus, Dallas, Seattle

Quantitative National Survey• Custom online survey; sample size 1,600, nationally

representative of US population

• Conducted January 2007 and in September 2008

• Additional teen (14-17 years of age) survey

• Customized category reports

A Consumer-Centric Approach

• Our research methods give consumers great freedom to define sustainability objectively and broadly

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5%

13%

58%

14%

10%

Total

Always Usually Sometimes Rarely Never

Over 75% of Consumers Consider Sustainability At Times When Making Purchases

Q6: “How often are your purchasing decisions based upon your concerns for issues such as the environment and social well-being?”Base: All respondents (n=1,856) Source: Sustainability 2008 Survey, Sept. 2008

How often are your purchasing decisions based upon your concerns for issues such as the environment and social well-being?

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12% can identify a sustainable company

25% can identify a sustainable product

Sustainability Is A Vast Untapped Opportunity

Q12: “Are you familiar with the term "sustainability"? Base: All respondents (1606 U.S. adults in 2007; 1856 U.S. adults in 2008).Sources: Sustainability 2007 (Jan.) and 2008 (Sept.) surveys.

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Life Stage Changes Are Entry Points To Build Sustainability Connections With Consumers

Overarching Dimensions of Responsibility

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Consumers Speak Up: Sustainability:

The Rise of Responsibility

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Paul – A Periphery Consumer

Learns most information about sustainability-related concerns from talk shows or the local news

Skeptical about claims that human behavior is causing global warming, but believes that reducing waste “just makes sense”

Has been a consistent recycler since the city made curb-side pick-up available (because it saves him money on his garbage bill!)

Believes that eco-friendly products are too expensive, but will purchase the green versions of a product when it is on sale

Gas prices would have to reach $5/gallon to consider taking the bus or sharing a ride to work

Just bought an energy efficient dishwasher because of a rebate

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Katie – A Mid-level Consumer

Concerned that natural resources will be depleted when son gets older

Tries to buy refillable containers both to save money and prevent wasteful packaging

Uses reusable canvas bags for grocery shopping out of concerns that plastic and paper bags require more energy to produce and recycle (it doesn’t hurt that she saves money with each bag too)

Shops at a large national grocer because prices are affordable and it’s close to home, but frequents a natural food store for produce

Dislikes how national chains are “taking over”mom-and-pop businesses and frequently eats at local eateries and coffee shops to support the community

Purchased hardwood floors from a local, family-owned bamboo importer

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Marilyn – A Core Consumer

Believes that real, substantive change must occur at a systemic level if we are to solve the world’s challenges

Distrustful of big companies and retailers, and always looks online to investigate ownership

Only buys Fair Trade coffee due to concerns about economic equity in other countries

Shops at farmer’s market and also receives a weekly Community Supported Agriculture (CSA) box

Takes the bus to work at least three times a week

Composts food scraps and yard waste

Chose reclaimed wood flooring, recycled plastic countertops for home improvement despite the significant price premium

Most new children’s toys she buys are locally crafted wooden toys

Uses rain water barrels to water her garden

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Marilyn – A Core Consumer

Believes that real, substantive change must occur at a systemic level if we are to solve the world’s challenges

Distrustful of big companies and retailers, and always looks online to investigate ownership

Only buys Fair Trade coffee due to concerns about economic equity in other countries

Shops at farmer’s market and also receives a weekly Community Supported Agriculture (CSA) box

Takes the bus to work at least three times a week

Composts food scraps and yard waste

Chose reclaimed wood flooring, recycled plastic countertops for home improvement despite the significant price premium

Most new children’s toys she buys are locally crafted wooden toys

Uses rain water barrels to water her garden

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Consumer Depictions of Sustainability Include “Green” ….

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… But There is A Broader Movement of Hope, Responsibility and Action that Extends Beyond Green

Be Responsible

Sense of Urgency

Hope

Connection

Simple Living

Authenticity

Control

Care/Nurturing

Local

Community

Healthy

“It comes a lot from every person taking personal responsibility and saying, I’m gonna commit to this, this is

important, I’m gonna do my part.” - midlevel consumer

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Consumers Describe Sustainability in Terms of Community, Local, Health, Preserving Resources, and Simple Living

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Healthy: For Many, Sustainability Starts At a Personal Level: In, On, Around The Body…

“What goes in our bodies is the most important, what goes on our bodies is a close second.” – mid-level consumer

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Healthy: Perception of Risk is an Important Trigger to Participation in Sustainability

As consumers learn more about risks, they are not willing to accept the status quo

Implications: natural/green is becoming the cost of entry in many categories

Fear of harmful effects of industrial ingredients

Heightened bodily sensitivity (irritations, allergies)

Awareness of where something is made (local, fair trade)

All Natural

Organic

“Locale”

Green

Personal experience, anecdotal stories & urban legends feed

anxieties

Translates to aspirational

behavior at retail

Increased social pressure to care about the environment

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Organic: A Growth Category Driven By Personal Benefits (e.g., Health, Safety)

83%

67%

62%

59%

57%

49%

46%

29%

28%

27%

22%

21%

14%

13%

11%

Absence of pesticides

Absence of growth hormones

Absence of GMO's

Safer for one's health

Environment-friendly

Absence of antibiotics

Absence of food irradiation

Family (small-scale) farms

Absence of BSE

Better treatment of farm animals

Better taste

Locally grown

Gourmet cooking

Sustainable production

Fair TradeSource: Organic 2006 Study (n=2109)

From the following list, what properties do you think are implied or suggested by the term "ORGANIC"?

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However, Freshness, Local and Sustainable Now Rank Higher Than Organic

When selecting foods and beverages to purchase, how important are the following labels or phrases to you?

All respondents (n=2,161)Top 2 Box based on 7-point scale ranging from “Not at all important” (=1) to “Extremely important” (=7)

90%

64%

53%

49%

47%

46%

45%

36%

35%

34%

32%

30%

29%

29%

11%

Fresh

Pesticide-free

Natural

Hormone-free

Origin of ingredients

Certified humane

Locally grown

Sustainable

Seasonal

USDA Organic

Fair trade

Free range

Grass-fed

Organic

Heirloom

Top 3 Box*

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Local: Defined By More Than Distance

Shows respondents who “agree”. Source: 2007 Sustainability Study (n= 1,600)

52%

37%

37%

36%

31%

27%

23%

It's important for me to buy locally grown food wheneverpossible.

It's important for me to know whether the milk I buy comes fromcows that have been given growth hormones.

When I think of food quality, I only think of how the productlooks, tastes, and smells rather than where it is produced.

It's important for me to buy meat and poultry that have beenraised without routine use of antibiotics.

When I think of food quality, I only think of how the productlooks, tastes, and smells rather than how it is produced.

I trust the government to insure the safety of my food.

It's important for me to buy organically grown food wheneverpossible.

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Local: Is Most Powerful When It Includes a Product Narrative

Question: Thinking about how local products are marketed, how much do you agree with the following statements?

20%

25%

25%

23%

33%

32%

35%

38%

31%

28%

24%

24%

9%

8%

12%

11%

7%

6%

5%

5%

Seeing a picture of the peoplethat make a product makes it

more credible to me.

Seeing a picture of where alocal product is made makes

the product more credible thanmass produced products.

Learning about the peoplebehind a local product (who

makes it) is important to me.

Learning about the storybehind a local product (how it's

made) is important to me.

Completely agree Partly agree Neither agree nor disagree Partly disagree Completely disagree

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Local Has Both Symbolic and Objective Meanings To Consumers

Objective: Geographic Symbolic: Locale

When asked in survey format which statement they think best defines a “local product” consumers defer to geographic definitions:

• 50% say “made or produced within 100 miles”

• 37% say “made or produced in my state”

Geographically local is important to consumers because it signifies “fresh”

During in-person interviews, when describing distinctions about local products, consumers also describe products using locale:

• Unique: Expressing the distinct geography of a region which implies quality attributes

• Distinctive: Specific tastes attributed to a locale

• Authentic: Cues a small producer

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Preserving Resources: There is a Growing Awareness of the “Social Life” of Products

Consumers are weighing in product distinctions based on production, consumption, and beyond

Implications: natural/green products resonate with a holistic connection to self, community and earth

Pre-consumption

Renewable materials

Ethical production

Consumption

Clean ingredient list

Safe

Post-consumption

Biodegradable

Reusable

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Packaging is the First And Last Sustainability Cue Consumers Notice

Food Packaging Materials That Consumers View Most Negatively

Importance of Packaging Materials

Q38: When purchasing products, how important is it that [the] packaging be...” (5-point scale of importance). Q42: “Which of the following types of food packaging/containers are you concerned about when it comes to your health or the

environment?“ (Select up to 3).Base: Consumers inside the World of Sustainability (n=1,662)

Source: Sustainability 2008 Survey, Sept. 2008

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Simple Living: Consumers Increasingly Desire to Live More Responsibly

The Green lifestyle (eco-chic) is becoming something to envy and

desire rather than being about trade-offs

Implications: natural/green products are considered to be “good for me” AND “good for the environment”

Increased concern for ill effects of ramped up consumption, increasingly scarce resources and economic crisis has resulted in:

Cultural Shift: Consumers rethinking purchase/lifestyle habits (e.g. commuting, buying less, living simply)

Responsible Purchases: Consumers now feel a moral obligation to “do my part” by “doing the right thing” and “voting with my wallet”

Sustainability has arrived! Politicians, celebrities and everyday consumers not just hard core environmentalists are leading the dialogue

In times of economic hardship, sustainable products are a way to express personal values

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There is a “Constellation of Values” that Trigger Consumer Interest in Sustainability

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Consumers Define Sustainability in a Multitude of Ways

76%

55%

44%

44%

35%

33%

32%

25%

23%

22%

17%

12%

12%

12%

11%

11%

9%

7%

6%

4%

Ability to last over time

Ability to support oneself (self-reliance)

Conserving natural resources

Recycle, reuse, reduce

Responsibility

Environmentally friendly

Economic viability

Responsible farming methods

Green

Reducing carbon footprint

High quality

Humane treatment of animals

Fair trade

Simple living

All natural

Organic

Connecting with others

Local

Social activism

Reduction of meat consumption

Q13: “The word ‘sustainability’’ may mean different things to different people. What does it mean to you?”

Base: Consumers familiar with the term “sustainability” (n=151)Source: Sustainability 2008 Survey, Sept. 2008

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The Hartman Model Looks At Sustainability Through A Consumer Lens Defined By “Responsibility”

Though widely used in business circles, the term “sustainability” is not a household word and has limited traction as a marketing term

Consumers interpret the word “sustainability” as green and link it to only one zone, environmental

“Responsibility” is a broader theme and better word to depict sustainability

• a value-laden term describing a call to action to contribute to the greater good

• goes beyond green• articulates the role of companies and consumers as

they negotiate their respective sustainable behaviors

The Hartman model starts with a traditional foundation of the interconnection of economic, social and environmental zones, but uniquely….

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…Incorporates Personal Benefits That Motivate Consumers To Act on Sustainable Aspirations

Consumer Lens

What I value

What I know

What I choose to do

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Importance of Company Practices in Consumers’Purchasing Behavior - It Isn’t Just about the Environment

85%

79%

77%

76%

76%

75%

72%

71%

70%

66%

63%

62%

61%

54%

45%

Provides quality products

Provides safe working conditions for its employees

Sells products/services at low prices

Tries to reduce waste and pollution

Tries to minimize the environmental impact of its production

Produces and distributes products in an energy-efficient manner

Provides good wages and benefits to its workers

Avoids inhumane treatment of animals

Tries to reduce the use of non-renewable resources

Takes steps to reduce its carbon footprint

Avoids unnecessary packaging

Uses green building techniques in its manufacturing and facilities

Represents the principles I agree with

Maintains supportive relationship with local community

Ensures the best possible return to its shareholders

Top 2 Box*

*Top 2 Box based on 5-point scale ranging from “Very Unimportant” (=1) to “Very Important” (=5)Q10/Q11: “When deciding which product/service to purchase, how important is it that the company that produces the product/service……?”

Base: Significant shoppers inside the World of SustainabilitySource: Sustainability 2008 Survey, Sept. 2008

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Consumers Frame their Evaluations of a Company Using Dimensions of Responsibility

Resource consumption

Biodiversity

Waste disposal

Employment practices

Community involvement

Fair trade

Animal welfare

Profitability

Ownership

Money circulation

Household finances

Personal protection

Belonging/feeling good

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Consumers View Sustainable Companies as Responsible Companies

Consumers make subjective interpretations about a company’s objective actions.

•E.g., Company uses petroleum and coal as power source ….

•E.g., Company switches to solar power …

Company is environmentally irresponsible

Company is more eco-friendly, but limited by bad social policies toward employees

It is therefore critical for a company to engage in self-reflexive inquiry and evaluation regarding what’s important and where it stands in light of the dimensions of responsibility.

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Evaluations of Corporate Responsibility are Made in the Context of Transparency and Authenticity

Access to a company’s values, policies, and practices; open communications.

The extent to which a company’s activities are true and consistent with their values.

How accessible is information ?

How easy is it for consumers to learn about your company?

Does your company do what it says it does?

How long has your company been doing what it says it does?

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Foods and Beverages are Central to Consumer Perceptions of Sustainability

“Food is so basic. Everyone has to have it. And it impacts everything. So it makes sense that sustainability has to start with food.” ~ Sustainability Consumer

Consumers believe foods and beverages are a central sustainability issue that impact all zones of sustainability:

Personal Benefit

Personal safety; nourishment and vitality; enjoyment

Environmental (responsible) Farming practices; (decreased) food miles

Social Ethical treatment of animals; connection to local food producers

Economic Community support; Fair trade practices

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Sustainable Product Adoption Pathways

Food and Beverage Specific:

Sustainable Product Adoption Pathway:

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Current Market Reach and Immediate Growth Opportunity (by Product Category)

Q30: “Which of the following specific foods or beverages have you purchased or consumed in the past 30 days?”Q31: “For which of the following foods/beverages are you willing to pay 20% more for a sustainable version?”Base: Significant shoppers inside the World of Sustainability who purchased general product category (base size varies by category, from 174 [meat alternatives] to 1,461 [bread]).

70%

36%

24%

26%

19%

18%

13%

17%

22%

12%

14%

18%

19%

8%

6%

16%

5%

14%

8%

8%

7%

20%

18%

25%

21%

25%

25%

26%

20%

14%

24%

20%

16%

15%

24%

23%

13%

23%

13%

19%

17%

32%

0% 10% 20% 30% 40% 50% 60% 70% 80%

Meat alternatives

Bottled water

Seafood

Fruits

Vegetables

Eggs

White meat

Milk

Yogurt

RTD beverages

Red meat

Bread

Packaged rice

Pre-packaged coffee

Deli cheese

Butter

Rice-based products

Wine

Fresh prepared food/deli

Packaged cheese

Chocolate

Buyers of Sustainable Version (Among General Category Buyers)

Non-buyers of Sustainable Version Who Would Pay 20% Extra (Among General Category

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6%

15%

21%

37%

47%

48%

66%

78%

77%

54%

Yourhousehold

Your localcommunity

Your state

The UnitedStates

The world

2007

2008

Percentage answering “much worse” or “somewhat worse” to the question: “When you think about the direction things are headed, how you think the quality of life will change in each of the following areas?”

Sources: 2007 Sustainability Survey (n=1,489 consumers within the World of Sustainability).2008 Sustainability Survey (n=1,662 consumers within the World of Sustainability)

Recent Events Have Shifted Consumers Perceptions that Quality of Life Will Change for the Worse

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Economic Concerns Top the List of Consumer Concerns

88%

77%

76%

74%

69%

61%

52%

50%

42%

42%

31%

30%

29%

28%

25%

23%

20%

Higher gas / heating oil prices

Healthcare costs

Dependence on imported oil

Bank and mortgage crises

Unemployment

Rapid rise of inf lation

Climate change / global w arming

Natural disasters

Depletion of natural resources

Air pollution

Lack of food safety

Social inequality (gender, race, economic)

Carbon emissions

Overpopulation

Heavy use of pesticide/fertilizer in agriculture

Contaminated drinking w ater

Genetically modif ied crops and food

Q4: “What are the main issues that are currently impacting our society?”Base: All respondents (n=1,856)


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Is the Consumer Economic Frugality for Real?

More pronounced evidence of channel shifting

• Favoring Walmart over mainstream grocery retail on some occasions

Consumers appear to be dining out less often• Significant opportunity for prepared and convenience foods in retail

Some consumers appear more oriented to promotional strategies

• Numerous data sources point to recent spikes in coupon use

75%

71%

71%

62%

24%

20%

20%

I try to buy items on sale

I eat out less

I drive less

I cut dow n my entertainment activities (going tomovies etc.)

I cancelled my vacation plans

I shop at club stores more (Costco, Sam's Club)

I am selling some of my possessionsQ51: “How have recent economic conditions impacted your life?”

Base: Consumers inside the World of Sustainability (n=1,662).Source: Sustainability 2008 Survey, Sept. 2008.

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What is Not Changing….

Consumers are not radically changing their food and beverage preferences• Abandoning certain foods or trading down quality does not solve consumers’

financial problems

• They are making some trade-offs, but not leaving categories entirely.

• Would life go on without our cherished Balsamic vinegar?

Consumers are not abandoning their interest in quality food experiences• The consumer’s redefinition of quality has been a well-documented ongoing

trend for over a decade

• Food choices are integral to consumers’ values and lifestyle

In times of economic hardship, sustainable products are a way to express personal values

13%

62%

25%

I buy more sustainable products nowthan last year

I buy the same amount of sustainableproducts

I buy few er sustainable products nowthan last year Base: Consumers inside the World of Sustainability (n=1,662)


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56%

82%

36%

66%

95%

73%

Making purchase decisions is an effectiveway for me to express my values

Businesses and corporations should provideleadership in the area of environmental

protection

Core

Mid-level

Periphery

Consumers have high expectations for companies and believe their purchases matter

Purchasing Decisions, Voting Decisions or Local Community Involvement: Which Has a Greater Impact on Society? **

2008 Sustainability Survey (n=1,856 total consumers and 1,662 within the World of Sustainability)

2007 Sustainability Survey (n=1,489 consumers within the World of Sustainability)

39%

42%

19%

17%

18%

65%

My purchasingdecisions

My voting decisions

Involvement in localcommunity

Inside Sustainability WorldOutside Sustainability World

“I like to give something back, and I don’t have a lot to give to charity, but what I can do instead is give it to purchases that are more sustainable.” – core consumer

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Price Remains an Important Consideration when Purchasing a Sustainable Product

65%

56%

48%

45%

34%

70%

61%

52%

53%

73%

63%

43%

72%

68%

32%

Product is soldat the low estprice possible

Productdirectly

benefits me(e.g., low ersmy utility bill)

Product ismade by a

company thatprotects theenvironment

Total

Core

Inner Mid-level

Outer Mid-level

Periphery

While consumers outside the Core rate price the highest, Core consumers are most interested in the environmental stance of the company producing the product.

Q16: “Which of the following are most important to you when purchasing sustainable products? (Please select up to 3 choices)”Base: Significant shoppers inside the World of Sustainability (n=1,591; 243 Core, 589 Inner Mid-level, 487 Outer Mid-level, 272 Periphery)


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7%

24%

27%

40%

56%

34%

0% 10% 20% 30% 40% 50% 60%

Core

Inner Mid-Level

Outer Mid-Level

Periphery

Outsiders

Total

CoreInner Mid-LevelOuter Mid-LevelPeripheryOutsidersTotal

However, over a third of Consumers are willing to pay 20% more for a sustainability benefit

Likelihood of Paying 20% Higher Prices for Sustainability Products

Question: Compared to a year ago, are you more or less willing to pay 20% more for sustainable versions of products/services? Source: 2008 Sustainability Survey (n=1,662 consumers within the World of Sustainability)

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Willingness to Pay a 20% Premium for Sustainable Foods

Q31: “For which of the following foods/beverages are you willing to pay 20% more for a sustainable version?” Base: Consumers inside the World of Sustainability who purchased general product category (base size varies by category, from 174 [meat alternatives] to 1,461 [bread])


44%

40%

38%

38%

35%

35%

32%

31%

29%

29%

28%

27%

26%

25%

24%

24%

23%

21%

19%

18%

38%

Meat alternatives

Fruits

Eggs

Vegetables

White meat

Milk

Seafood

Red meat

Yogurt

Bread

Pre-packaged coffee

Deli cheese

Butter

Wine

Packaged rice

Packaged cheese

Ready-to-drink beverages

Bottled water

Chocolate

Rice-based products


Willing to Pay 20% Extra forSustainable Version (AmongGeneral Category Buyers)

Consumers are most willing to pay a premium for fresh food and highly differentiated categories

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Consumers Seek To Uplevel The Quality of Their Food Experiences, An Overarching Food Trend

IMPLICATIONS | OPPORTUNITIES

Consumers are willing to pay more for products that are perceived to be higher quality and deliver an enhanced experience

Food Requirements

REDEFINITION OF

QUALITY

Sustainability

Natural Organic Fresh Local Sustainable

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33%

28%

27%

25%

23%

20%

18%

17%

15%

14%

9%

8%

7%

7%

3%

2%

Product label

Internet search engine (e.g., Google)

In-store information (e.g., signs at store, salespeople)

TV/Radio

New spapers

Books/Magazines

A product company's advertisement

Friend or colleague

Family member

A product company's w eb site

Internet-based social netw orking group (e.g., Facebook, MySpace)

Medical professional (e.g., doctor, nutritionist)

Special interest organizations (e.g., Audubon Society, Nature Conservancy)

Government agency (e.g., EPA, USDA)

A product company's annual report/corporate social responsibility report

Union organizations

On-pack, internet and in-store are the top sources for information on sustainability (not 3rd parties or company reports)

Q26: “Which of the following in-store information sources have you used in

the past 3 months to learn about sustainable products or companies?”Base: Significant shoppers inside the

World of Sustainability (n=1,591). Source: Sustainability 2008 Survey,

Sept. 2008.

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40% of Consumers View Certification As Important

Q39: “Many sustainable products come with certification that verifies products' sustainable benefits. How important is sustainability certification to you?” Base: Significant shoppers inside the World of Sustainability (n=1,591; 243 Core, 589 Inner Mid-level, 487 Outer Mid-level, 272

Periphery). Source: Sustainability 2008 Survey, Sept. 2008.

How important is certification to you?

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Certifications vary in influence by category with the following having the highest awareness

USDA Organic continues to be a powerful communication “handle” and marker for quality despite the increased awareness around local and “rBST-free” (in dairy)

• Categories: Food and Beverage, Food Service, Personal Care, Home Décor

Fair Trade has gained momentum among Mid-level and Core sustainability consumers as a meaningful symbol of comprehensive responsibility. Strongly associated with cocoa and coffee; increasing awareness in tea, sugar, flowers

• Categories: Food and Beverage, Food Service, Home Décor

Reduce, Recycle, Reuse has strong comprehension for packaging• Categories: Food and Beverage, Personal Care, OTC Medicine and Supplements, Household

Cleaners, and Food Service

Not Tested On Animals / Cruelty Free has high awareness among core sustainability consumers especially teens

• Categories: Personal Care, OTC Medicine and Supplements, Household Cleaners

Energy Star has high awareness in the Home Décor category

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Consumers Prefer Independent Organizations as Providers of Certification

24%

17%

39%

25%

23%

35%

26%

20%

39%

22%

13%

22%

22%

11%

34%

Independentorganization(e.g., non-

profit group)

Governmentagency

Companymaking the

product

Total

Core

Inner Mid-level

Outer Mid-level

Periphery

Preferred Provider of Sustainability Certification

Q40: “Who would you prefer provide certification?” Base: Significant shoppers inside the World of Sustainability (n=1,591; 243 Core, 589 Inner Mid-level, 487 Outer Mid-level, 272 Periphery). Source: Sustainability 2008 Survey, Sept. 2008

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“Reducing Carbon Footprint” is Growing in Importance

22%

40%

25%

19%

13%

7%

Reducing carbonfootprint

Total

Core

Inner Mid-level

Outer Mid-level

Periphery

Outsiders

Q13: “The word ‘sustainability’’ may mean different things to different people. What does it mean to you?”Base: Consumers familiar with the term “sustainability” (n=1,151)


Importance of Carbon Footprint When Purchasing A Product/Service

66%

95%

73%

61%

42%

Takes stepsto reduce its

carbonfootprint

Top 2 Box*

Total

Core

Inner Mid-level

Outer Mid-level

Periphery

* Top 2 Box based on 5-point scale ranging from “Very Unimportant” (=1) to “Very important” (=5). Q11: “When deciding which product/service to purchase, how important is it that the company that produces the product/service...?”Base: Significant shoppers inside the World of Sustainability (n=1,591; 243 Core,589 Inner Mid-level, 487 Outer Mid-level, 272 Periphery).Source: Sustainability 2008 Survey, Sept. 2008.

Association of Carbon Footprint With Sustainability:

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Greenwashing May Be A Media Rather than a Consumer Phenomenon

Consumer Reactions to Large Company’s Environmentally Friendly Claims (By Sustainability Consumer Segment)

Q27. When a large company claims that its products or its manufacturing processes are environmentally friendly, what is your initial reaction? The company's claim is...” Base: Consumers inside the World of Sustainability who responded to this question (n=1,521; 226 Core, 556 Inner

Mid-level, 464 Outer Mid-level, 275 Periphery). Source: Sustainability 2008 Survey, Sept. 2008.

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Generally, Teens Rely Less on Sustainability To Guide Purchase Decisions

24%

58%

18%

36%

41%

23%

Never/Rarely

Sometimes

Alw ays/Usually Adults Teens

Q6: “How often are your purchasing decisions based upon your concerns for issues such as the environment and social well-being?” Base: All respondents (1,856 adults, 413 teenagers, 185 teenage males, 228 teenage females). Sources: Sustainability 2008 Survey, Sept. 2008; Sustainability 2008 Teen Survey, Nov. 2008.

Purchase Decisions Based on Sustainability:

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Teens Are More Responsive to Contemporary Social Dimensions of Sustainability Such As Living More Simply

“Simple living”, “humane treatment of animals”, “all natural”, “social activism”, “local” and “reduction of meat consumption”resonate twice as much with teens as adults

Q13: “The word “sustainability” may mean different things to different people. What does it mean to you?” Base: Consumers familiar with the term “sustainability” (1,151 adults, 183 teenagers). Sources: Sustainability 2008 Survey, Sept. 2008; Sustainability 2008 TeenSurvey, Nov. 2008.

What “Sustainability” Means To Consumers:(Associations Held More Often By Teenagers than By Adults)

Figure 84.

12%

17%

12%

11%

12%

11%

6%

9%

7%

4%

26%

25%

25%

24%

21%

20%

19%

16%

14%

10%

Simple liv ing

High quality

Humane treatment of animals

A ll natural

Fair trade

Organic

Social activ ism

Connecting w ith others

Local

Reduction of meat consumption

Adults

Teens

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Organic & Sustainability: Millennials Foster Sustainability Through Community

For Millennials, Sustainability is about being community oriented and supporting small, local businesses. Millennials refer to Sustainability as “going green.”

Local trumps Organic as organic brands have become overly processed to Millennials seeking “real food.”

Never has there been a generation so acutely aware of local and global environmental issues.

Millennials are attempting to build communities grounded in the positive as opposed to reactionary Boomer parents.

For Millennials, Sustainability is about supporting socially conscious businesses as opposed to purchasing products to solve problems.

Transparency and building smaller brands are key for earning the trust of Millennials.

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The Rise of Consumer Responsibility Key Findings

Consumer awareness has increased with industry and media attention

Much of this has portrayed sustainability too narrowly as just “green”

“Responsibility” is the new broader consumer platform for “good companies”

“Responsible Purchasing” is on the rise

Sustainability is a marker for quality and can be a tie breaker in a purchase decision

The current economic downturn is not changing most sustainable behaviors, but consumers are making more considered decisions and tradeoffs in less essential categories

Consumers look for information about sustainability at point of purchase (e.g., in-store, on-pack communication)

Consumers are seeking narratives and storylines regarding sustainable practices and the people and places behind sustainable products

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Strategic Guidelines Around Sustainability:

Develop company or brand narratives that are core to your principles and connect consumers to the people, places and processes that epitomize your company. Let others (NGOs, consumers) tell your story

Stay oriented to consumer definitions (hope, connection, care, control, etc.), not industry definitions, of “sustainability”

Link personal benefits to sustainable products and services

Define Quick, Easy Steps that allow participation to be flexible and part of everyday high frequency behavior

Social and Economic values carry equal weight to Environmental ones.Show them how the company is part of a community, and stay inclusive.

Packaging remains a critical vehicle for communicating sustainability benefits (e.g., content, recyclability, practices)

Address key barriers to regular participation: convenience, price and availability – sustainability provides differentiation.

“Open up” the business for direct consumer input and dialogue as well as transparency about company processes, values, etc.

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hghghhghgh

Alison Worthington

The Hartman Group, Inc.

(425) 452-0818 ext. 161

[email protected]

www.hartman-group.com

Sign up for HartBeat

www.hartman-group.com/hartbeat

THANK YOU!

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Summary | Product Purchases (by Product Category)

Q28/Q30: “Which of the following [specific] foods or beverages have you purchased or consumed in the past 30 days?”Bases: Significant shoppers inside the World of Sustainability (n=1,591) and general category buyers (varies by product).Source: Sustainability 2008 Survey, Sept. 2008.

92%

88%

88%

85%

83%

83%

74%

72%

69%

69%

63%

62%

51%

46%

45%

44%

38%

34%

33%

21%

10%

14%

26%

13%

18%

19%

24%

12%

22%

6%

8%

39%

8%

17%

18%

32%

14%

8%

5%

70%

19%

16%

Bread

Vegetables

Milk

White meat

Eggs

Fruits

Red meat

Ready-to-drink beverages

Butter

Packaged cheese

Bottled water

Chocolate

Yogurt

Packaged rice

Seafood


Rice-based products

Deli cheese

Pre-packaged coffee

Wine

Meat alternatives

Buyers of General Category(Among All Shoppers)

Buyers of Sustainable Versions(Among General Category Buyers)

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