Environmental concerns have been brought to the forefront in recent years, with warnings of rising global temperatures, biodiversity loss, and plastic pollution now becoming a commonplace globally. The heatwaves we experienced across Europe this summer, resulting in the worst droughts seen in 500 years, are a prime example. Such concerns are echoed by scientists recently reporting that it will be theoretically impossible to limit global warming to 1.5C, signalling a need for immediate and drastic change.
With 40% of consumers reporting to have chosen brands that have environmentally sustainable practices and values over those that do not, pressure on consumer packaged goods (CPG) companies to adapt and react, is mounting.
The CPG industry needs to take action and contribute to the positive change needed to preserve our planet’s future. With businesses becoming more intensely regulated for their environmental impact, a new business model that collaborates with consumers and provides real and meaningful routes to sustainable consumption is needed. Here are the steps CPG brands can take to achieve this.
A shift to a sustainability-first mindset
Until recently, business imperatives around ‘beating the competition’, and driving continuous growth have resulted in a business culture centred around incentivising consumers to continuously buy more. In the CPG industry, this has fuelled damaging and wasteful practices, such as using disposable plastic packaging manufactured at a low cost.
While a focus on continuous growth can mean more convenience and choice for consumers at lower prices, the trade-off is the environmental cost of not only overconsumption, but inefficient product sourcing, manufacturing, and distribution.
However, achieving profitability and efficiency doesn’t have to mean sacrificing more responsible approaches to business processes. Those that are realising this are striking a balance between profit and purpose – and are reaping the benefits of doing so. With half of consumers saying they’re willing to pay a premium, for products that protect the environment, becoming a sustainable business should become an important strategic choice that can help CPG companies thrive and attract more customers.
The customer is king
The relationship with the consumer is vital when it comes to the success of a business’ sustainability strategy. Although consumers are free to choose how and what they consume, it is the responsibility of the business to ensure ethical and sustainable choices are readily available, and in turn, onboard them into making a real impact.
Brands should look to redefine their business models to make this possible and offer real and meaningful solutions to the end consumer. This includes adopting transparent practices, refining end-to-end functions, such as shipping and manufacturing, and committing to using more environmentally friendly materials.
Brands such as Lush are already taking the lead. For the majority of their products, Lush tries to use little to no packaging at all, even offering shampoo and conditioner in bar form, rather than liquid in a bottle. Pots that are used for other products are made with 90% recycled materials, which can also be returned to be used again.
Improving access to responsible consumption
We’ve started to see brands putting purpose first and empowering the consumer to make sustainable decisions in their everyday lives. Through offering affordable and sustainable delivery options, carbon certifications, QR codes that reveal the carbon footprint of a product and price incentives to promote ethical products, CPG brands are helping both themselves and the consumer limit the impact they make.
For example, organic beauty brand, Cocokind, has committed to being transparent about the carbon impact of their products. Their product packaging features a label, displaying a breakdown of ‘sustainability facts’, listing factors such as carbon emissions throughout the supply chain, the labour used in production, and the recyclability of its packaging. It also includes a QR code consumers can scan for more details, providing a convenient way for consumers to make informed decisions about the products they choose to purchase.
Through implementing these small changes, CPG brands can demonstrate their commitment to creating a sustainable future, whilst also bringing consumers along on this journey and encouraging them to transform consumption habits.
A collaborative approach to preserving our planet
The past few years have prompted consumers and businesses alike to reconsider their impact on the planet. From carbon footprints to the waste created in consumption, there are a variety of elements that influence how consumers today make purchasing decisions. Now, it is essential that CPG brands redefine their relationships with consumers and make a sustainable future a collaborative endeavour. This means responding to customer demands and transforming business structures to provide the means that make sustainable consumption more achievable. When CPGs adopt a sustainability-first mindset, they can then create value for themselves, the planet, and their customers.
Stuart Wilkinson is industry director for consumer products and life sciences at SAP