Sustainability means different things to different people. When Innova Market Insights analyzes trends—including sustainability and its relationship to ingredients—we approach the topic from several angles.
One involves the major global forces that impact multiple industries in the United States and around the world. We feel the impact of climate change including weather severity and natural disasters. These impact natural environments that support the food supply.
Climate change also challenges health, the availability and affordability of housing, and, importantly, food security. Economic uncertainty and job insecurity are particularly impactful on consumers. Financial pressures challenge a consumer’s ability to take action toward sustainability.
Large-scale global events are forcing suppliers to seek alternatives to ingredients made vulnerable by climate change and economic stresses. Some ingredient companies strive to address shortages in the cocoa sector. Others are considering product reformulations to work around juice orange shortages exacerbated by climate change. Supply chain disruptions, weather events, and high prices also have led to considerations for coffee alternatives. The olive oil industry also is adapting to climate-induced supply disruptions that have resulted in lower production and higher prices.
Consumers are Aware, Concerned
US and global consumers are increasingly aware of climate change and the need to support sustainable practices. In a recent annual consumer trends survey, Innova asked consumers globally about their level of awareness regarding climate change and its impacts. Nearly half of those surveyed reported high levels of awareness about the consequences of climate change. In particular, North American consumers focus on environmental concerns and name “health of the planet” as a top global issue.
What is interesting, however, is that the level of concern may not translate into consumer purchasing. Convenience and especially price and value—rather than eco-friendliness—are key drivers of buying behavior. US consumers say that although they are looking for sustainable alternatives, price is a major barrier. Their high level of price sensitivity means that products with sustainability benefits and sustainable ingredients also need to offer consumers personal and price benefits.
Brands will need to shape product innovation and marketing in ways that reduce or remove barriers to sustainable shopping. What would move the needle? We suggest products with sustainability claims and related ingredients that are affordable, convenient, accessible, and easy to incorporate into daily habits.
Consumer education could focus on additional product benefits that resonate with consumers—such as longer product shelf life and therefore lesswaste and more cost savings. Bulk purchasing options and loyalty rewards also could enhance value for budget-conscious shoppers.
Accessibility is vital. Our surveys suggest that consumers want sustainability to be easy and effortless. They are unlikely to go out of their way to locate and purchase products with sustainable ingredients and sustainability claims. Convenience usually wins if the decision is between sustainability and convenience. Supermarkets and mass marketers may be a better outlet than specialty retailers for sustainable food and beverage products. Larger retailers can offer consumers incentives such as discounts, loyalty rewards, or digital coupons to encourage convenient, accessible, time-saving purchases with sustainability features.
Brands also need to build and maintain trust. Consumers are skeptical of sustainability claims and may think companies are driven by profits rather than environmental impact. Brands have to be transparent regarding their actions and include validation tools such as study data, third-party certifications, descriptions of indicators of sustainability, and communication of meaningful impact.
Consumers do demonstrate openness toward innovative farming practices such as regenerative agriculture, vertical farming, climate-resilient crops, and other novel technologies that address climate change and improve food production. Manufacturers promoting their use of these practices need to reassure consumers that innovative farming methods offer environmental benefits without impacting product pricing. Third-party certifications like Land to Market and Regenerative Organic can lessen consumer concerns regarding regenerative agriculture and farming technologies.
Food Waste Reduction
About half of North American consumers surveyed by Innova said that minimizing food waste is a priority and that they took action during the previous 12 months for reasons of “environmental responsibility.”
Other factors—such as health and personal finances—can figure into the bigger trend. Sometimes, food waste reduction could involve purchasing smaller quantities, buying more “mindfully” and/or buying less overall. It also could mean cooking less and reusing leftovers. Purchasing misshapen food items also supports food waste management, as does upcycling.
Upcycling, the process of transforming byproducts or waste materials into valuable products, offers consumers another tool to reduce food waste and support sustainability. Many Innova survey participants agree with the statements that upcycled ingredients are more appealing and better in quality. They also recognize the value of upcycling to help protect nature. Interestingly, confectionery leads other categories in the incorporation of upcycled ingredients.
As the overall market grows with increasing volumes of upcycled ingredients and finished products, it’s clear that upcycled ingredients can reduce waste while they support a product’s sensory and functional benefits. Food and beverage processors can support food waste reduction by offering more high-quality, upcycled products that meet consumer expectations regarding price, convenience, access, and taste.
Demand for Plant-Based Alternatives
Consumers are showing interest in plant-based alternatives to traditional meat and dairy products. Their interest is driven first by health benefits, but environmental reasons—such as a smaller environmental footprint—are becoming more prevalent.
Movement toward plant-based foods and dishes with whole plant ingredients is supported by consumers who perceive plant-based foods as more nutritious, natural, fresher and less processed. Also, close to one-third of consumers we surveyed in the US and Canada cite the influence of claims regarding animal welfare, including the rBST-free hormone treatment claim on some cheese products.
Several consumer sub-groups drive the connection between a plant-centric diet and sustainability. A solid majority of US vegetarians and vegans surveyed by Innova say they consume plant-based alternatives as a way of supporting sustainability. Younger consumers, including those who are Gen Z or Millennial, are more likely than older ones to consider a plant-based diet for sustainability.
Manufacturers can capture US consumers’ attention and demonstrate how plant-based alternatives support a more ethical and environmentally responsible lifestyle. Many consumers are concerned about the relationship between traditional food production methods and environmental impact such as resource depletion and carbon emissions. Eating more plant-based alternatives—including products with plant protein ingredients—helps them support sustainability and reduced their personal environmental footprint.
Consumers Eye Sustainable Packaging
US consumers regard sustainable packaging as another way to be environmentally responsible. In fact, nearly one-third of US and Canadian consumers surveyed in 2023 say brands and companies should focus on sustainable packaging.
Recyclable packaging is a common, easy way for consumers—especially Generation Z—to do their part. Other approaches for suppliers and CPG companies are to increase the percentage of recycled content in a package or reduce the amount of plastic in packaging. US consumers also may be willing to use reusable, refillable packaging as long as it’s convenient and accessible.
Will sustainable packaging sell at the shelf? It’s hard to say whether North American consumers are willing to pay more for sustainable packaging. Even so, we are monitoring exciting sustainable packaging solutions. These include new compostable snack packaging, paper-based alternatives for plastic products, and biodegradable packaging that’s seaweed-based.
In summary, it’s clear that sustainability has transitioned from niche aspiration to expected action. Although consumers play a small role, they expect manufacturers to work toward greater sustainability in sourcing, ingredients, and products. They also expect fair pricing, convenience, ease of use, and evidence that their actions toward sustainability and the actions of manufacturers make a difference in the environment.
