Has the era of the ‘green consumer’ finally arrived?

By Cary Strickland, Senior Innovation Advisor

We are what we repeatedly do. But when it comes to environmental sustainability, research in recent decades has shown a gap between our intentions and actions. Surveys suggest that most consumers say they want to buy from brands that prioritize purpose and sustainability, but few will pay more to support this commitment.

A 2019 Harvard Business Review article suggested this intention-action gap existed for as many as 40% of consumers.¹ At the same time, solutions that offer environmental sustainability — whether in the form of solar panels, electric cars, or bioplastics — have tended to cost more than their less-sustainable alternatives. This sets up a technology adoption hurdle that few ‘green’ solutions have been able to overcome.

As we entered 2020, some of this began to change. In December 2019, the Freeing Energy blog from Bill Nussey (a tech CEO and venture capitalist now focused on clean energy) suggested that local energy generation, in the form of green energy from solar panels and batteries, was becoming less expensive than centralized electricity.² By December 2020, Car and Driver was reporting that reduced battery costs would bring electric vehicles to cost-parity with gas vehicles within the next few years.³ In March of this year Novomer, a sustainable materials company pioneering polyhydroxyalkanoates or PHAs (a class of bioplastics with highly-tunable properties) announced they had successfully demonstrated their production technology and were moving to design a commercial facility. Their process promises lower-cost bioplastics with properties tailored to replace polyethylene, the most widely used plastic deployed in many single-use plastic applications.

How are consumers responding to these changes? A December 2019 survey from First Insight found that Generation Z shoppers (born between 1995 and 2012) were already willing to pay 10% more for sustainable products.⁴

Our team’s recent work found a similar preference for environmentally sustainable solutions among younger buyers and housing and building products. And, the explosion of single-use plastic waste resulting from personal protective equipment, packaged take-out meals, and grocery delivery during the COVID-19 pandemic will only serve to make environmental sustainability a more present issue in coming years.⁵

As Generation Z (and Millennials) grow their share of global purchasing power, we anticipate the desire for environmentally sustainable products and services will continue to increase. At the same time, we are approaching an inflection point where paying more for environmentally sustainable options may no longer be the norm.

In our team’s work for clients across food and beverage, consumer packaged goods, or other industries, we are always on the lookout for new products and services that can deliver a value proposition of environmental sustainability in addition to better performance or an optimized user experience. If you are considering how to take a meaningful step forward in sustainability for your products, or maybe your packaging, we are ready to advise you as you adapt to meet the demands of your future customers.

¹White, Hardisty, and Habib. The Elusive Green Consumer. Harvard Business Review, July-August 2019. https://hbr.org/2019/07/the-elusive-green-consumer.

²Nussey, Bill. A decade of trends points to local solar + battery becoming the cheapest source of electricity. Freeing Energy, December 30, 2019. https://www.freeingenergy.com/a-decade-of-trends-point-to-local-solar-battery-becoming-the-cheapest-source-of-electricity/.

³Baldwin, Roberto. EVs Could Soon Cost Same as Gas Cars Thanks to Lower Battery Costs. Car and Driver, December 16, 2020. https://www.caranddriver.com/news/a34992832/battery-price-drop-2023/.

⁴The State of Consumer Spending: Gen Z Shoppers Demand Sustainable Retail. First Insight. January 2020. https://www.firstinsight.com/white-papers-posts/gen-z-shoppers-demand-sustainability.

⁵Adyel, Tanveer. Accumulation of plastic waste during COVID-19. Science, September 11, 2020. https://science.sciencemag.org/content/369/6509/1314.

Cary Strickland brings to RTI Innovation Advisors’ clients his extensive experience helping product development teams find the right partners, assess technology options, or evaluate their competition for developed and emerging markets. He has expertise in technology scouting, landscaping and evaluation, market opportunity analysis, and technology-inspired ideation, and human-centered design. He has managed projects in infrastructure and construction, industrial coatings and chemicals, food, and packaging; his international experience includes Japan, Saudi Arabia, and the Philippines.

When not musing on innovation excellence he plays guitar and bass. Cary has an M.E.M. in Engineering Management from Duke University, a B.S. in Chemical Engineering, and a B.S. in Paper Science Engineering from North Carolina State University.

RTI Innovation Advisors helps clients turn insights into new products, services & technologies that have meaningful human and business impact. Feed of RTI Int’l