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Circana Report: Sustainability Trending Across Retail

Circana sustainability retail

Spending on sustainability is trending upward across several areas of discretionary general merchandise and consumer packaged goods, according to new research by Circana, formerly IRI and The NPD Group. 

As of September 2022, 40 percent of consumers reported that environmental issues impact their decision whether to shop at a specific manufacturer or retailer. It was the first time this had surpassed social issues.

“Products that impact our energy use, reduce waste and use recycled materials or natural ingredients are all getting attention from consumers and presenting pockets of retail growth,” said Marshal Cohen, chief retail industry advisor.

“Despite concerns related to rising prices, consumers continue to prove their willingness to spend on the right products that deliver the value – and values – they seek.”

While some consumers say they are not willing to pay more for sustainable products, there are discretionary general merchandise categories where the sustainable options outpaced the alternatives despite a higher price per unit.

Sustainability also is making its mark on the CPG industry. Circana, which conducts annual research with the New York University Stern Center for Sustainable Business, found that sustainability-marketed products had a 17.3 percent share among 36 CPG categories in 2022 but had grown 30 percent from the prior year. 

The most prevalent sustainable claim on consumer food and beverage products is “recyclable,” with revenue for products touting the fact that they use recyclable packaging having increased 12 percent versus last year, and 30 percent compared to three years ago. Both outpaced the industry averages. 

Sales of vegan cookbooks have also been on a steady rise over the past four years, which Circana said indicates a consumer desire for incorporating more sustainable, plant-based foods and beverages into their diets. Increased spending is going toward categories such as oat milk and frozen meat substitutes.

“The continued growth in sustainable product sales demonstrates the importance of bringing newness and innovation to the market,” Cohen said. 

“Even with all the economic and political distractions facing consumers, they continue to demonstrate a focus on sustainability and a willingness to pay a premium for it. Bringing sustainability to the forefront continues to be a wise marketing tool and, for some brands, the main tool when it is built into the DNA of the product.”

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