4 Sustainable Business Trends to watch in 2021
Consumers understand that they can play a role to solve these issues and are decided to act changing their consuming habits.
A study by NYU Stern, shows that despite sustainability-marketed products are just 16% of the consumer packaged goods (CPG) market, they delivered 54% growth (2015-2019). Moreover, consumers are willing to pay a significant price premium of 39.5% vs conventional products.
Younger generations, educated and urban are more likely to buy sustainability-marketed products.
Sustainability products grew 54.7% despite representing 16.1% of the CPG market (2015-2019)
This shift in consumer values and ideals is matching with a new wave of sustainability products that match the quality and performance of conventional goods. This major sustainability business trend offers an opportunity to first movers and poses a risk to those companies not moving fast enough.
There are four areas to watch food, textiles, lifestyle and eco-labels.
Consumers want to buy healthy, bio, locally sourced foods with less environmental impact. Food production is responsible for 26% of greenhouse gases and has a significant impact on land use and freshwater consumption.
It is clear that the biggest positive impact an individual can have on climate change is by eating a sustainable diet with less meat and dairy, less food waste and more vegetables, nuts and legumes. (Community Impact Challenge)
Therefore, the consumption of plant-based meat and dairy substitutes has kept rising during the pandemic. According to Nielsen, sales of meat alternatives were up 140 per cent in the US vs a year earlier.
As an example, the sustainable leader Unilever expects to increase its plant-based meat and dairy alternatives sales to €1bn in five to seven years.
Textiles and Sustainable Fashion
Research from BCG shows that 38% of consumers report actively switching from their preferred brand to another because it credibly stands for positive environmental and social practices.
Brands are responding by using sustainable materials in the products, building transparency through their supply chains and building circular fashion systems by designing, producing, selling and collecting products that enable the reuse and recycling of post-consumer textiles. As an example, Adidas Grün (“green”) is a range of footwear that minimizes the environmental impact by the use of recycled fabrics and natural materials from certified sources, such as cotton, hemp, bamboo and cork.
Adidas to use 100% recycled polyester by 2024
Our determination to reduce our impact in the world will boost a transition towards electric vehicles, remote working, sustainable packaging and, dematerialization of the economy. This latter means demanding product as a service such as sharing economy, digitalization (e.g. paperless office) or cloud solutions in ICT.
An important trend falls into educating and informing consumers about products’ sustainability claims. In this sense, there are Eco-labels which inform consumers about products’ health, environment or social benefits. There are eco-labels certified by third parties such as Forest Stewardship Council, Fairtrade or Energy Star. Other brands have developed their labels as Unilever’s carbon label to be present in 70k of their products.