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Most consumers are prepared to pay more for sustainable packaging

2019-06-27 09:40 Thursday

Most people take it for granted that recycled packaging comes with a higher cost of production, but how many consumers are willing to actually pay a premium for their products to have eco-friendly credentials?


According to a new U.S. study, the answer is: a clear majority. The latest report is published by Exal Corporation, in partnership with Boston Consulting Group, following a poll of more than 5,000 respondents. 

It says that most Americans care about sustainable packaging – and 55 percent are prepared to stump up more for it. In some cases, they are prepared to pay an extra 20 percent.

Whether or not this can translate into higher profits for producers depends on a wide range of factors, but if the experts are to be believed, consumers should be ready to put their hands in their pocket for the sake of green values with little persuasion.

Buying decisions are driven by a mix of emotional and rational reasoning. In this area, the rational element is represented by the practical value of recycling.

According to the U.S. Environmental Protection Agency, the proportion of consumer packaging and containers recycled by weight grew from 38% in 2000 to 53% in 2015. Consumers are more conscious of the recyclability of the materials they purchase, and the figures are rising.

However, the emotional side of buying may be even stronger. Consumers today are barraged by heart-tugging videos and news stories on social media – highlighting the impact of plastic on the ocean and marine life, for example.

A viral video of a distressed sea turtle with a plastic straw stuck in its nostril has received over 35 million views on YouTube. Another notable news report, of an “island” of plastic floating in the Pacific Ocean, gained a firm place in the public consciousness.
Today’s consumers are being forced to face the impact of their material choices like never before, up close and in detail.

This combination of rational and emotional is prompting a shift to sustainability among consumer brands heavily dependent on non-sustainable packaging, and against single-use products that would have been taken for granted just a decade ago.

However, all brands are operating in a highly competitive market and must balance the cost of moving to eco-friendly materials with the impact of that decision on sales, market share and profitability.

According to the data, more than half (55%) of survey participants are willing to pay at least 5% more for drinks with eco-friendly packaging.

Similarly, 47% regard as acceptable paying at least 5% more for personal care and cosmetic products in eco-friendly packaging. Nearly one in four are even willing to pay up to 20% extra.

These figures will be closely studied by professional in industries such as printing, PET bottle manufacturing, packaging converters, retail, F&B (Food and Beverage) and FMCG (Fast Moving Consumer Goods), as well branding agencies and advocates of the circular economy.

The willingness to pay more for packaging made from green materials is not isolated to one age group, nor is it based on income. People across generations, from Boomers to Millennials, are just as likely to perceive spending more for eco-friendly packaged products as a positive choice.

For consumers, it is as much about what not to buy as what to buy: nearly 60% of consumers say they are less likely to purchase products in packaging that is harmful to the planet, and more than a third (37%) say they would not buy those products at all.

This reflects the number of consumers who identify themselves as “environmentally aware” (57%) and who say it is important to buy products in environmentally friendly packaging (62%).

“The research shows us that being green isn’t just a trend,” said Michael Mapes, CEO of Exal, which produces aluminium containers. “Consumers are translating their beliefs into action and are willing to speak with their wallets.”

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