Understanding the Sustainable Consumer: Lessons Learned and Upcoming Research in 2013

Presented by Laurie Demeritt, CEO, The Hartman Group

2 Understanding the Sustainable Consumer: Lessons Learned and Upcoming Research in 2013 © 2013 The Hartman Group, Inc

Today’s Topics

Review Topline Findings from Past Hartman Group Sustainability Research

• Participation in the World of Sustainability

• Consumer Attitudes Toward Sustainability

• Sustainable Purchasing and Products

• Communicating Sustainability

Preview 2013 Sustainability Study: When Personal Aspirations and Behavior

Diverge

3 Understanding the Sustainable Consumer: Lessons Learned and Upcoming Research in 2013 © 2013 The Hartman Group, Inc

Sustainability Study 2010: Methodology Overview

Qualitative Research

• In-depth ethnographic interviews in consumer homes and in stores

• Field locations

» Seattle, Chicago, Charlotte, and Dallas

Quantitative National Survey

• Custom online survey of 1,982 adult US consumers fielded in August 2010

A Consumer-Centric Approach

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

Participation in The World of Sustainability 01

5 Understanding the Sustainable Consumer: Lessons Learned and Upcoming Research in 2013 © 2013 The Hartman Group, Inc

13%

35%

31%

21%

World of Sustainability | 89% of US consumers participate

Segmentation reflects the intensity of consumer involvement in the World of Sustainability

Segmentation is based on respondent behavior regarding: animal testing, packaging, community issues, supporting companies helping the local

community, recycling, and price. Base: n=1982.

6 Understanding the Sustainable Consumer: Lessons Learned and Upcoming Research in 2013 © 2013 The Hartman Group, Inc

The world of sustainability | Purchase criteria varies according to consumer segment

7 Understanding the Sustainable Consumer: Lessons Learned and Upcoming Research in 2013 © 2013 The Hartman Group, Inc

Some personal benefit must be served before larger sustainable concerns are considered by consumers

Personal Benefit Zone

Social Zone

Environmental Zone Economic Zone

Sustainability is now conventionally expressed in terms of the environmental, social and economic impacts (the “three pillars”) that result from human action.

We also add a fourth zone of sustainability, personal benefit, because it is particularly helpful in explaining sustainability from the consumer viewpoint – especially in terms of an entry point.

8 Understanding the Sustainable Consumer: Lessons Learned and Upcoming Research in 2013 © 2013 The Hartman Group, Inc

For consumers, sustainability is initially tied to perceptions of risk mitigation and health

The majority of consumers first enter the world of sustainability through the personal safety/health dimension of the personal benefit zone (concern for things in, on and around the body).

Personal health benefits typically are expressed in sustainable products as a lack of negative/ toxic ingredients whether in food, personal care or household products.

• So, recognizable ingredients that can be found in the average consumer’s kitchen (whether food product or not), such as citrus, vinegar and baking soda, cue that a product is benign

• Other cues such as a short ingredient list and recognizable ingredients also help

What goes

in my body What goes on

my body What’s around

my body

What’s beyond

my body?

9 Understanding the Sustainable Consumer: Lessons Learned and Upcoming Research in 2013 © 2013 The Hartman Group, Inc

Consumer notions of sustainability involve certain dimensions of responsibility for each zone

Social Zone

1. Employment practices

2. Community involvement/local

3. Fair trade

4. Animal welfare

Environmental Zone

1. Waste disposal

2. Energy consumption

3. Resource preservation

Economic Zone

1. Money circulation

2. Ownership

3. Scale

Personal Benefit Zone

1. Quality

2. Personal safety/health

3. Household finances

Importance given to each zone and each dimension can vary by consumer

segment, product category, brand, and consumer and industry idiosyncrasies

Consumer Attitudes Toward Sustainability

02

11 Understanding the Sustainable Consumer: Lessons Learned and Upcoming Research in 2013 © 2013 The Hartman Group, Inc

THE GAP! | Consumers do not yet make the connection between sustainability and sustainable companies and products

Q16/Q12/Q16 Are you familiar with the term 'sustainability'?

Q17_2/Q14_6/Q18_6 I don’t know where to buy such products. I don't know which products are sustainable. – Bottom-2 Box Disagree.

Q17_1/Q14_2/Q18_2 I don't know which companies support sustainable values. – Bottom-2 Box Disagree.

Base n=1606-2007; 1856-2008; 1982-2010.

54% 56%

69%

12%

25%

21%

5%

12% 12%

0%

10%

20%

30%

40%

50%

60%

70%

80%

2007 2008 2010

Familiar with term"sustainability"

Can identify asustainable product

Can identify asustainable company

Significant Gap

12 Understanding the Sustainable Consumer: Lessons Learned and Upcoming Research in 2013 © 2013 The Hartman Group, Inc

Literal definitions of “sustainability” have lost prominence as consumers become more familiar with sustainability

64%

50%

50%

44%

42%

40%

37%

31%

31%

31%

27%

26%

17%

15%

14%

13%

13%

13%

76%

44%

44%

55%

33%

35%

25%

32%

22%

23%

N/A

N/A

17%

11%

12%

12%

11%

12%

Ability to last over time

Recycle, reuse, reduce

Conserving natural resources

Ability to support oneself (self-reliance)

Environmentally friendly

Responsibility

Responsible farming methods

Economic viability

Reducing carbon footprint

Green

Stewardship of land

Maintaining a clean water supply

High quality

All natural

Simple living

Fair trade

Organic

Humane treatment of animals

What does sustainability mean to you?

2010

2008

Q13/Q17. The word sustainability may mean different things to different people. What does it mean to you? Base: Consumers familiar with the term

“sustainability” n=1151-2008; 1352-2010.

*N/A: not tracked that year

Responsible farming methods

has increased substantially over

two years

Literal or

dictionary

definitions

have

declined

13 Understanding the Sustainable Consumer: Lessons Learned and Upcoming Research in 2013 © 2013 The Hartman Group, Inc

Personal benefits and social dimensions of responsibility are important considerations in consumer purchase decisions

82%

79%

74%

72%

72%

71%

71%

68%

66%

66%

65%

45%

45%

42%

Provides quality products

Provides safe working conditions for its employees

Sells products/services at low prices

Provides good wages and benefits to its workers

Reduces waste and pollution

Minimizes environmental impact of its production

Avoids inhumane treatment of animals

Is energy-efficient

Is involved in the community

Reduces the use of non-renewable resources

Avoids unnecessary packaging

Gives a percentage of its profits to charities I like

Is a local company

Ensures the best possible return to its shareholders

It’s important that the company…

Q13-Q14. When deciding which product/service to purchase, how important is it that THE COMPANY that produces the product/service…? – Top-2

Box importance. Base: Significant shoppers inside the World of Sustainability n=1691-2010.

Social

Environmental

Economic

Personal benefit

14 Understanding the Sustainable Consumer: Lessons Learned and Upcoming Research in 2013 © 2013 The Hartman Group, Inc

Social and environmental factors are more valued by the Core whereas the Periphery tends to value personal benefits

87%

97%

95%

96%

37%

97%

91%

88%

28%

84%

87%

81%

81%

57%

80%

67%

70%

38%

63%

54%

46%

44%

58%

35%

32%

27%

36%

59%

30%

20%

21%

78%

11%

13%

11%

47%

I would like to see companies' sustainablepractices be more visible to the public

I support companies that help my localcommunity

I am an avid recycler

I am aware of local community issues

When shopping, the most important feature Iconsider is price

I avoid buying products from companies withpoor labor practices

I look for products that are not tested on animals

I avoid buying products with excessivepackaging

When shopping, I primarily look for productsthat personally benefit me and my family,

regardless of its social or environmental effects

Core

Inner Mid-level

Outer Mid-levelPeriphery

Q19. Please indicate how strongly you agree or disagree with the following statements. – Top-2 Box importance. Base: Significant shoppers inside the

World of Sustainability n=294-Core; 564-Inner Mid-level; 614- Outer Mid-level; 219-Periphery.

Sustainable Purchasing and Products 03

16 Understanding the Sustainable Consumer: Lessons Learned and Upcoming Research in 2013 © 2013 The Hartman Group, Inc

Cost is a key barrier for purchasing based on sustainability concerns

Q12. At times when purchasing decisions are not based on such concerns (the environment and social well-being), what are the main reasons why

these issues don't influence your decision? Base: Significant shoppers inside the World of Sustainability n=294-Core; 564-Inner Mid-level; 614- Outer

Mid-level; 219-Periphery.

42%

27%

18%

20%

13%

13%

10%

5%

46%

32%

18%

21%

14%

9%

5%

5%

44%

39%

19%

17%

14%

9%

5%

6%

44%

43%

23%

17%

12%

6%

5%

6%

It takes too much money

There are too many other things I have to worry about

It is too complicated

Acting alone, I can't have much impact

It takes too much time

Such issues are too depressing to think about

The negative effects won't be felt in my lifetime

I'm not really concerned

Core

Inner Mid-level

Outer Mid-level

Periphery

Periphery

consumers are

mostly apathetic

about

sustainability

because they

have too many

other worries in

their lives

17 Understanding the Sustainable Consumer: Lessons Learned and Upcoming Research in 2013 © 2013 The Hartman Group, Inc

Grocery stores and supercenters are the most common channels used by sustainability shoppers

Q67. Where do you typically shop? Base: Significant shoppers inside the World of Sustainability n=1691.

78%

65%

43%

43%

37%

33%

33%

31%

21%

19%

17%

16%

14%

13%

6%

4%

3%

Grocery store

Supercenter (e.g., Walmart, Target)

Pharmacy/Drugstore

Home improvement store

Dollar store (e.g., Dollar General)

Online

Club store (e.g., Sam's, Costco)

Farmers' market

Local hardware store

Convenience store (e.g. 7-Eleven)

Natural/Health food store (e.g., Whole Foods Market)

Local nursery (garden store)

Specialty/Ethnic Food Store (e.g., Trader Joe's)

Direct Mail/Catalog/Internet

Food co-op

Community Supported Agriculture/Farm (CSA)

Direct from sales rep/manufacturer (e.g., Amway)

Average Number of Channels Selected

Core Inner ML Outer ML Periphery

6.3 5.1 4.4 3.7

18 Understanding the Sustainable Consumer: Lessons Learned and Upcoming Research in 2013 © 2013 The Hartman Group, Inc

Sustainability category adoption pathway

Food and beverages

CFL light bulbs

Household cleaning

products*

Energy-efficient appliances

Water-efficient devices

Recycled paper products

Reusable shopping

bags

Reusable

mugs/bottles*

Personal care

products

Human grade pet food

Growing own vegetables

Lawn/garden fertilizers

Hybrid vehicles*

Over-the-counter

medications

Programmable thermostats

Building home chicken

coops

Compost bins

Electric vehicles

Rain barrels

Food service

establishments

* Indicates categories that are adopted earlier than in 2008

19 Understanding the Sustainable Consumer: Lessons Learned and Upcoming Research in 2013 © 2013 The Hartman Group, Inc

Sustainable versions of fresh food categories are the most commonly purchased

Q28. Which of the following foods or beverages have you purchased or consumed in the past 30 days? n=1691.

Q29. Which of the following specific foods or beverages have you purchased or used in the past 30 days? Base: Significant shoppers inside the World of Sustainability

n=1691.

Q30. 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

that purchased category in Q28 n varies.

Which of the following FOODS have you purchased or consumed

in the past 30 days? Consumed

Consumed

Sustainable

Version

Willing to

pay 20%

more

Bread 84% 12% 24%

Fresh fruit 79% 17% 34%

Fresh vegetables 77% 19% 36%

Eggs 77% 12% 35%

White meat (e.g., chicken, other poultry, pork) 76% 11% 33%

Cold cereal 69% 9% 18%

Chips (potato or tortilla) 69% 10% 16%

Red meat 67% 7% 30%

Butter 66% 4% 21%

Pasta sauces, canned tomatoes, salsa 64% 10% 17%

Packaged cheese (sold in dairy case) 59% 4% 18%

Condiments 59% 4% 12%

Yogurt 55% 8% 26%

Packaged foods (e.g., boxed macaroni and cheese) 52% 7% 14%

Nuts 49% 9% 22%

Communicating Sustainability

04

21 Understanding the Sustainable Consumer: Lessons Learned and Upcoming Research in 2013 © 2013 The Hartman Group, Inc

43%

26%

22%

19%

19%

18%

17%

16%

16%

35%

33%

25%

23%

20%

27%

17%

18%

15%

Online

Product label

TV/Radio

Newspapers

Books/Magazines

In-store information

Friend or colleague

Advertisements

Family member

2010

2008

The Internet continues to be the most commonly used information source for sustainability

Q25. Which of the following information sources have you used in the past 3 months to learn about sustainable products/services or companies?

Base: Consumers inside the World of Sustainability n=1662-2008; 1767-2010.

22 Understanding the Sustainable Consumer: Lessons Learned and Upcoming Research in 2013 © 2013 The Hartman Group, Inc

Certifications | Consumers are often uncertain about what they mean, but find them reassuring and positive elements on packages

Certifications (e.g. NPA, Certified Humane, Fair Trade) are most important for consumers in the Core as they recognize, understand and trust the certifications.

Periphery consumers and many Mid-level consumers

• do not typically seek out specific certifications

• do not understand the certification standards or processes

• do not know much about the certification governing bodies

• however, simply seeing a certification seal on a package reassures them that “someone is making sure this product is what it says it is”

23 Understanding the Sustainable Consumer: Lessons Learned and Upcoming Research in 2013 © 2013 The Hartman Group, Inc

One of the best ways to communicate sustainability to consumers is via product or brand narratives

Narratives must include three key elements:

• Transparency – the story must be true/verifiable

• Raison d’etre – there must be a compelling reason for why the product came to market

• Emotional hook – the story must resonate with consumers at an emotional level, not just a functional level

Key narrative genres include:

• Charismatic founder narrative (e.g. Clif Bar, Stonyfield Farms, etc.)

• Unique production narrative (e.g. grass-fed beef, use of artisanal techniques)

• Unique varietal narrative (e.g., Scarlet Runner heirloom beans)

• Food artisan narrative (e.g. recipe developed by Wolfgang Puck)

• Geographic origin narrative (e.g. Walla Walla onions)

• Culinary sanctification narrative (via chef, magazine, food critics, etc.)

• Distinctive retail origin (e.g. restaurant, artisan shop, etc.)

Sustainability Study 2013

05

25 Understanding the Sustainable Consumer: Lessons Learned and Upcoming Research in 2013 © 2013 The Hartman Group, Inc

Methodology

The Hartman Group will utilize and integrate qualitative ethnographic research and quantitative survey research in our upcoming study Sustainability 2013: When Personal Aspirations and Behavior Diverge.

• Qualitative Research

• Fielding in two major U.S. markets— Seattle and Atlanta

• In-depth ethnographic interview techniques including consumer artifact collection

• One-on-one interviews, group interviews and in-store interviews

• Quantitative Research

• Online quantitative survey

• Nationally representative sample of 1,600 U.S. primary adult household shoppers

• All major demographic segments will have adequate representation to allow for individual analyses.

26 Understanding the Sustainable Consumer: Lessons Learned and Upcoming Research in 2013 © 2013 The Hartman Group, Inc

Areas of Exploration

Our integrated approach allows us to go beyond the usual listing of motivators

and barriers to uncover the principal drivers responsible for moving consumers

along the adoption path in the World of Sustainability.

This research will answer key questions about consumers and the sustainable

marketplace, such as:

• What does “sustainability” mean to consumers today?

• How has consumers’ understanding shifted over time?

• What categories matter most to consumers when putting their dollars

toward sustainable products? What is the adoption pathway?

• What are the barriers to purchase and how can you overcome them?

• Why do consumers say they want to purchase sustainable products but fail

to actually buy them in some categories?

• How can you make YOUR product or service most relevant to consumers?

Our years of research in the sustainability arena will allow us to conduct an

longitudinal analysis of foundational questions.

27 Understanding the Sustainable Consumer: Lessons Learned and Upcoming Research in 2013 © 2013 The Hartman Group, Inc

Benefits of Study Sponsorship

Sponsors of the research will receive the following benefits:

• Input into study topics of exploration and design

• Exclusive access to proprietary builds to the research

• Early access to study results

• A high impact report written in PowerPoint format and detailed

demographic data tables in Excel format

• Ongoing support after delivery to answer follow up questions

• Preferred pricing for custom onsite presentation or webinar of study results

28 Understanding the Sustainable Consumer: Lessons Learned and Upcoming Research in 2013 © 2013 The Hartman Group, Inc

Interested? Learn More!

Contact us today to receive the complete

study overview.

Mention this webinar and receive a

$2,500 discount off sponsorship.

Lori Barsness

Marketing Services

lori.barsness@hartman-group.com

(425) 452-0818 x 109

THE HARTMAN GROUP, INC

1621 114TH AVE SE, STE 105 BELLEVUE, WA 98004

TEL (425) 452 0818 FAX (425) 452 9092

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