- Tetra Pak found the topics of health and environment are converging for consumers with the food and beverage spaces the first industries to feel the effects of this intersection.
- In its TetraPak Index 2019 study, three out of five consumers said their health and well-being are strongly affected by environmental problems. Additionally, respondents identified an increase in the consumption of more environmentally sound food and drink products as their No. 1 change ambition for both health and environmental reasons.
- With two-thirds of those polled believing that the world is headed toward environmental disaster, the study said the most successful brands “will be those that can demonstrate purpose and show that they are making a positive contribution to society beyond just providing good services and products.”
Today’s consumers consider the environmental implications of what they eat far more than the generations before them. While concerns about the environment and sustainability reach across multiple industries, the food and beverage spaces, with its association between personal and global health, is ground zero for consumers looking to make lifestyle changes that positively affect the environment while also improving their own wellbeing.
Consumers now expect some degree of transparency from companies when it comes to things such as clean ingredient labels or how the product aligns with their own values in areas such as sustainability. Increasingly, companies that fail to address these concerns or communicate openly what they are doing with shoppers are at risk of losing business to another brand that is more forthcoming.
Environmental concerns, in particular, are especially important for consumers. A survey from Nielsen last year showed almost half of U.S. consumers are likely to change what they buy to meet environmental standard, and they are willing to pay more for it. In fact, companies that espouse commitment to environmental sustainability can sway purchasing decisions for 45% of consumers, the research firm found.
Companies have been responding to this demand. In recent years, businesses including Mars, PepsiCo, Coca-Cola, Unilever and Walmart have announced some type of pledge — most often focusing on where their products come from, who produces them, how they are manufactured and their impact on the environment.
Other companies have explicitly pursued environmental initiatives. Nestlé, for example, has focused on water conservation, while AB InBev has focused on local watershed restoration projects and a transition to renewable energy. Field Trip Jerky, an eight-year-old meat snack manufacturer, switched over a few years ago to a grass-fed protein model. These companies are not alone in making changes. Nielsen reported a 20% growth in sustainable product sales last year to roughly $130 billion. The research firm forecast consumers will spend up to $150 billion on sustainable products by 2021.
Sustainable packaging has seen particularly large growth as plastic has fallen out of favor and manufacturers have begun experimenting with glass and reusable containers. From 2013 to 2017, the sustainable packaging CAGR increased 26%. Recently, several companies such as Coca-Cola's Dasani, PepsiCo's Aquafina and Vita Coco's parent company have announced plans to incorporate aluminum into their waters in an effort to be more environmentally friendly and decrease plastic waste.
Although there has been progress from companies in meeting the consumer demand for more sustainable options, there have been some reports showing that companies are falling short on these goals. While packaging may be becoming more sustainable, when it comes to raw material production deeper in a company's supply chain, there are issues associated with deforestation and greenhouse gasses. A Greenpeace report found these issues to be most apparent in companies that source meat, cocoa, dairy, soy and palm oil.
While some segments of the CPG industry may be easier to make environmentally friendly than others, it is undoubtedly in the interest of food and beverage manufacturers to produce their products sustainably as more consumers value the attribute when deciding which products to buy.