Join us on a thrilling journey through the bustling marketplace of sustainability, guided by none other than Randi Kronthal-Sacco, a seasoned scholar from the NYU Stern Center for Sustainable Business. Randi opens our eyes to the world of sustainable purchases, revealing that it only commands around 17-18% of the market share. However, she passionately argues that brands and marketers can flip this script by adopting sustainable supply chains and weaving those into their narratives. Moreover, she shares a triptych of points that brands should incorporate into their messaging - 'My Health', 'My Wealth', and 'My Personal World'.
As we traverse through the supermarket aisles, Randi enlightens us on the nuances of sustainable messaging. She illustrates the inadequacy of merely labeling products as 'sustainable', emphasizing the importance of crafting the right messages and combining a sustainable claim with a category claim for an 'amplifier effect'. We also delve into the reverberations of the pandemic, examining its impacts on consumer behavior and sustainable purchases. Tune in as we decode the complexities of sustainability, dissect the mechanics of sustainable communication, and forecast the future of sustainable purchases.
Be sure to check out the Effective Sustainability Communications: A Best Practice Guide for Brands & Marketers.
Join us on a thrilling journey through the bustling marketplace of sustainability, guided by none other than Randi Kronthal-Sacco, a seasoned scholar from the NYU Stern Center for Sustainable Business. Randi opens our eyes to the world of sustainable purchases, revealing that it only commands around 17-18% of the market share. However, she passionately argues that brands and marketers can flip this script by adopting sustainable supply chains and weaving those into their narratives. Moreover, she shares a triptych of points that brands should incorporate into their messaging - 'My Health', 'My Wealth', and 'My Personal World'.
As we traverse through the supermarket aisles, Randi enlightens us on the nuances of sustainable messaging. She illustrates the inadequacy of merely labeling products as 'sustainable', emphasizing the importance of crafting the right messages and combining a sustainable claim with a category claim for an 'amplifier effect'. We also delve into the reverberations of the pandemic, examining its impacts on consumer behavior and sustainable purchases. Tune in as we decode the complexities of sustainability, dissect the mechanics of sustainable communication, and forecast the future of sustainable purchases.
Be sure to check out the Effective Sustainability Communications: A Best Practice Guide for Brands & Marketers.
Welcome to Lost in the Supermarket. The buzzword that I keep hearing about in just about every corporate boardroom these days is about sustainability, but the problem, as I see it, is that everyone seems to have a different definition of what sustainability actually means. A lot of conflicting information there. Hopefully, today we're going to clear up the misconceptions and get clarity. Randi Kronthal-Sacco is a senior scholar at the NYU Stern Center for Sustainable Business. She leads CSB's research in the areas of marketing and brands, including the Sustainable Market Share Index, and is responsible for corporate outreach. With over 25 years of package goods and pharmaceutical experience, Randi is the person that we need to give us insight into what consumers are thinking about and what motivates them as it relates to buying sustainability claims. The NYU Stern Center for Sustainable Business and Edelman released a new first of its kind research. It's entitled Effective Sustainability Communications a Best Practice Guide for Brands and for Marketers. Randi, welcome to Lost in the Supermarket.
Randi:Well, thank you so much. I'm delighted to be here.
Phil:So talk to me about this best practice guide. What's the objective of it and are you going to be able to truly help brands and marketers come up with a common definition so it's not confusing to shoppers?
Randi:I believe so. We at NYU Stern Center for Sustainable Business have been monitoring sustainable purchases actual purchases of sustainable products by consumers, for over 10 years. The good news is that sustainable purchases have been growing year on year on year, growing twice as fast as conventional products, but they still only sit at about 17, 18% of the market. And I am regularly asked how do we go from 17% to 50%? And the way to do that is the leaders in the category have to adopt sustainable supply chains and then communicate them to the consumers.
Randi:And in categories where we've seen that happen, we've actually seen the whole category shift, because sustainable claims and sustainable supply chains become almost table stakes for the category. We saw it in milk, we saw it in cheese, we saw it in yogurt, we saw it in skincare, we saw it in soap, a lot of personal care categories and food categories. So we want the leaders to start to adopt these sustainable benefits, because consumer purchasing is such a sustainable product, is such an important part of solving the climate change or sustainable world issue. And so now the question is why aren't these leaders, who will move this from 17% to 50%, adopting sustainable communication and supply chain? And it's for a variety of reasons they're worried about backlash, they're worried about alienation, but one of the most pressing considerations is they don't have any data and information on how to talk about sustainability in a way that's going to motivate. Purpose and that was the background for the study is let's get a best practice guide to identify the claims that consumers want to hear to motivate purchase.
Phil:So you know what I'm going to ask what are the claims that consumers resonate with the most and actually move them to purchase those products?
Randi:Yeah. So we found three things that I wanted to talk about. One was that when you couple a sustainable claim with a category claim and when I say category claim, if you're in food, you have to have a good tasting product. If you just talk about the sustainability benefits without talking about the fact that it tastes good for food or washes your clothes, well, you're not going to drive purchase. So when you couple a category claim with a sustained, the right sustainable claim, we found in this study that it has a significant amplifier effect. So, for example, if you only say a category claim, you garner about 44% of 100 of your prospective audience. When you add an environmental claim the right environmental claim, which we'll talk about it goes from 44% to close to 70%. So you it really acted as an amplifier the right sustainability claim.
Randi:Number two has to do with what's personal. So it has to do with what's in it for me. There's a marketing 101 with them. What's in it for me? And that really those claims how does it benefit the consumer was the claims. That's that resonated the most and I'll go into those in a second.
Randi:What's interesting is, for years, sustainable marketers thought if we just tell consumers that you know buying this product will solve climate change or reduce greenhouse gases, that they will go and droves to the supermarkets to purchase the products, and this data says no. You have to tell them that the product operates in the category that it's operating in and that the product, the benefit, is personal and those right personal benefits resonated across audiences. So, whether you leaned left or right politically, whether you were old or young, whether you were rich or poor, those right benefits that were human was where the great unifiers. So we think of them as this this structure, my health, my wealth and my personal world. So my health anything that talked about absence of harmful ingredients and we looked at not just things sold in supermarkets but also tech and apparel, but anything that you know reduced the risk for of toxins and harmful ingredients to human health.
Randi:So my health, my wealth. If you have anything that can save people, money that does well. So, for example, when we talked about, when we were in, some household products that would use less energy. So if you're watching your clothes and cold water, for example, uses less energy. If you just told them that, that, then that this less energy reduce greenhouse gases, not interested, you tell them less energy and it saves the money and, by the way, it also reduces greenhouse gases. Top performing claim my health, my wealth and my personal world. Anything around families and farmers families being talk about the children and future generations or talk about their animal welfare so the new family in the post-pandemic and post-pandemic world. And local farmers Anything around preserving the farmers and the farms themselves. So my health, my wealth, my personal world.
Phil:So let me ask you a question. You bring up the pandemic. During the pandemic we saw a lot of consumer behaviors change, whether it was because of supply chain issues they didn't see products, they didn't want to go into stores. What effect, if any, did that have on the sales of those products that did follow those three tenants that were truly sustainable? Did we see sales decline because people were more nervous about money, about the future?
Randi:Yeah, that's a great question and we did have a lot of debate on whether during the pandemic, consumers would sort of see their interests, forget their interest in sustainability, because they're more worried about safety or they sort of think about the world at large. And we found during the pandemic itself that actually sales grew of sustainable products, and it's so not only. They not only survived the pandemic, they survived inflation because sustainable products tend to be higher priced than conventional products. And there was concern that during inflation, when consumers pocketbooks were pressed, that they would stop buying sustainable products. So actually sustainable shares grew, private label or store brand shares grew. What didn't grow was conventional products. So those two groups grew at the expense of conventional products.
Phil:So I'm surprised to hear that because of inflation, because of prices, with everything that we're hearing from consumers that more sustainable products were not affected. Tell me some thought process about that. Have we finally reached the tipping point where people understand, when they are looking at our weather patterns and everything, that climate change is upon us and it's a very serious issue, and are people now finally willing to accept that and then put their money where their mouth is?
Randi:I can't say it's universal, but I absolutely see we wouldn't see shared growth if it wasn't true that consumers are concerned. And there's a lot of data out there not from the work that we did or in partnership with Edelman, but there is a lot of data that the number of people who personally are impacted by climate change or weather patterns or a significant event has increased substantially over the past year.
Phil:So, looking to your crystal ball for a minute, you know again want to go from 17% to 50%, understand that objective, but what else would you really hope to achieve by having research like this, by being able to share with a brand or a retailer these kinds of findings? Are we gonna be able to change behavior and change climate change and get that number from 17 to 50% or even higher?
Randi:Yeah, I obviously hope so. I think that this data will arm brands between will arm brands with the information on how to talk about it in a way that's gonna drive purchase and perhaps our next YouTube conversation in six months or a year, when we've operationalized all this, we will see a significant jump because the market leaders will start to adopt these messages and not focus on science, which did not work. They focus, you know again, focus on the personal. I believe we will see a significant increase in share, but to be discussed at a later date.
Phil:So talk to me about the outreach that now. You've got this great research, you've got these findings, you really have a how-to for brands that wanna be sustainable how to get to those consumers. What action needs to be done? What outreach needs to be done to get this information into the hands of these brands? And who with the brand should it go to? Should it be the CEO? Should it be the head of sustainability? Should it be a category manager? I mean, what are the steps that are gonna be needed to take in order to make this a reality?
Randi:Yeah, probably all of the above would be wonderful, and we find when CEOs embed sustainability into their organization, that that really pivots the organization. Obviously, a brand manager is sufficient. So category managers and brand managers are wonderful to change the conversation and communicate these to consumers. So we are going between Edelman, who has a significant roster of clients. We have wonderful outreach as well. We are starting to. The research is brand new and we're starting to socialize and engage in a big way.
Randi:I did wanna go back to your question on what's gonna happen. I could count, on one hand, the number of brands that actually do talk about their sustainable benefits if they're not born sustainable and that's not their point of difference. But I turn to another category, like Tesla, to EVs. And when Tesla launched I don't know if you recall, but when Tesla launched they actually took a 747, they drive to 747 attached to a Tesla and drove across the country, and then they raced a Tesla against a race car on the Autobahn. They talked about how this is exactly. I think this is a great analog, because they talked about power, they talked about design and, by the way, it happens to be an EV. So that and now look what's happening. They really changed the market. I hope that happens with this information and a strong brand adoption on these messages.
Phil:So let's stick with that Tesla example for a moment, because, yes, I do recall that and they've done a brilliant job of marketing. But now what we're starting to hear about is that the energy that's required to make these batteries may be even more handful than carbon emissions. How do we reconcile those kinds of conversations that consumers are having with the brand equity that's there?
Randi:Yeah, so I. When you look at the life cycle analysis of a Tesla, not just in the production, where it may be a higher energy output, but if you look at the entire life cycle, it's significantly better for EVs than for Automobiles. But I'm not the one for forced combustion engine automobiles. I Can't really talk about other than I know that to be true. I don't think that is. It is not an issue when we're talking about adopting for supermarket products More sustainable sourced Ingredients. They are just Fundamentally better for consumers and better for the world.
Phil:One other finding that I found real interesting that I'd like you to comment on is that tiktok has an outsized impact on generation Z, as or is influencing about sustainability. What are some examples of that, and what should brands be paying attention to? Getting their message on tiktok from a sustainable standpoint?
Randi:Yeah, that's a great question and that was All our findings are head nods, of course, of course, yes, what's in a? Permit me? Of course Gen Z cares about tiktok and Confirming many people's assumptions are is wonderful in its own right. So, but as we've taken these learnings to each of the brands that engaged in the study, they recognize the importance of tiktok but haven't moved their sustainable Messages on to tiktok. So it they are. This confirms what they already knew, because either they are Gen Z's or they have children who are Gen Z. So this isn't a surprise, but it shows the importance of influencers, and and tiktok in particular, in In Communicating to really what will be the future consumer.
Randi:What's also interesting about Gen Z's? We found three findings. One, tiktok, which you are pointing out to. While I did say that across the board, the science-based claims like Carbon or greenhouse gas or water pollution did not resonate For the general population, it did resonate for Gen Z's. They over-inducted in the interest in those products and I was speaking to a reporter who said well, of course, because for them those are personal claims, because they are adopting the world that we all are leaving them. So we saw tiktok, we saw Significant interest in some of the science-based claims, not top performing, I need to say, but definitely strong, strongly moderate performing claims. And then the third is that Gen Z's Differentially include a brand's environmental record in the purchasing of their product, as opposed to other generations. So there were three areas where Gen Z Outlook is different than the rest of the cupboards.
Phil:And probably reinforcing what we keep on reading about how important this generation is gonna be for not only the future of the planet, but our economic future as they become even more powerful. Well, Randi, great job on the research. Thank you, great job on being able to clearly tell these brands and marketers and supermarkets how to communicate these very important messages, because, you're right, I mean just putting a label on a food product that says sustainable and a lot of people have done that doesn't move the needle, but being able to use your three points will. So thanks so much for doing it.
Phil:We'll make sure that we hope to get the word out there. And if people wanna get the research, how can they do that?
Randi:Come to Stern Center for Sustainable Business and look for best practice guide.
Phil:Perfect Thanks for joining us today. I'm lost in the supermarket.
Randi:Thank you, Phil, lovely meeting you. 🎶