Sustainability in Consumer Products: A Closer Look at Generational Preferences

Sustainability preferences are evolving.
So are your consumers.
Are you ready?

Who Is Highlight

Highlight's product intelligence platform helps brands of all sizes–
from the Fortune 100 to the earliest disruptive brands–innovate,
test, launch, and renovate products in categories including food and
beverage, beauty and personal care, home care, supplements,
apparel, durables, child and baby, pet care, and more.

Highlight’s end-to-end solution streamlines and delivers everything
from recruit to logistics to data set. Quickly field concept tests and
in-home usage tests (IHUTs) and see results as they come in–
usually within a few days of launch.

Highlight’s community of testers are highly engaged, diverse, and
articulate so that you get the reliable quantitative and qualitative
data you need to act with confidence–with the option for photo,
video, and even in-depth interviews.

Highlight’s customers (brands like Nestlé, P&G, and Georgia Pacific)
have tested concepts, products in early development, blind-tested
products against the competition, benchmarked in-market products
for category insight and more.

Highlight’s Series A funding was led by Acre Venture Partners and
HearstLab, with participation from Ingeborg Investments, GS
Futures, and 10+ powerhouse angels.

“Highlight’s mission is to help brands build better products for both
people and the planet,” said CEO and founder Dana Kim. “With
easier, faster access to high-quality product-level consumer
insights, brands can understand what sustainability attributes
matter, how to best communicate those attributes, drive positive
perception, repeat purchase, and realize the ROI of more
sustainable product development.”

The Challenge

Companies across sectors and nations are faced with the challenge
of building sustainably, but most product development and
consumer insights teams lack clarity about the “right” way to
accomplish this for their business and customers. In what ways
should companies transform their products and supply chains that
will facilitate sustainable production and consumption while still
providing consumers compelling purchase drivers?

“How do we make sustainability
synonymous with things that people care
about—quality, taste, value—and do it in
a way that people can afford? If we can
crack this nut, this is one of the biggest
opportunities for impact we have.

Sam Kass, Partner at Acre Venture
Partners and Senior Policy Advisor
for Nutrition to President Obama

96%

According to KPMG and the BBC,
96% of the largest 250
companies worldwide self-report sustainability measures,
but so far, there is no globally
agreed upon set of standards
and frameworks to vet and
measure these reports.

The Methodology

From September to October 2023, Highlight fielded a nationwide
survey across 1976 consumers in the US.

Ages of respondents ranged from 18 to 71 with an average age of 42.
We defined generations as follows: Gen Z (age 18-26 at the time of
data collection), Millennials (27-42), Gen X (43-58), and Baby
Boomers (59-77).

Respondents were each sent one of the following physical
products, and were then asked a series of sustainability-related
questions rooted in that product experience: Boxer Briefs,
Postpartum Disposable Underwear, Seamless Panties, Facial Serum,
Tinted SPF Product, Plant-based Milk, Ground Coffee, Dish
Detergent, Water Bottle, Gazpacho, Veggie Dip, Bread Bites,
Shampoo & Conditioner, Laundry Product, Acne Cleanser, Adult,
Wipes, Cat Food, Snack Bar, Kettle Chips, Cheese Snacks, Popcorn.

We anchored in McKinsey-defined Sustainability Claim Categories,
to tease out what matters: animal welfare (“cage free”, “cruelty
free”, “not tested on animals”); environmental sustainability
(“compostable”, “eco-friendly”); organic positioning (an indication of
organic certification); plant-based (“plant based”, “vegan”); social
responsibility (“fair wage”, “ethical”); sustainable packaging (“plastic
free”, “biodegradable”).

Younger shoppers want to make better decisions for the planet

Gen Z and Millennials state they are more likely to
aallwwaayyssseek out and purchase products that are
labeled or marketed as sustainable or eco-friendly.

17%

Gen Z

15%

Millennials

10%

Gen X

11%

Boomer

Percent by generation that answered “Yes always”

“Sustainable products are a
plus, but not an all-time
make-or-break to if I
purchase an item or not.”*

• He/him, Age 24, Gen Z

“Sustainability is super
important, but it can be hard to
regularly buy products that fit
that criteria when a lot of them
tend to be more expensive.”*

• She/her, Age 22, Gen Z

While younger generations may be more likely to recognize the
importance of sustainability in product design, the majority still
perceive the challenges of making sustainable purchase decisions
every time.

Gen Z shoppers especially want to make better purchase decisions

Even so, 76% of Gen Z shoppers say they have
switched or stopped purchasing a product due
to sustainability concerns, compared to just
over half of Boomers.

“Sustainability in and of itself is
no longer a differentiator, it’s just
an expectation that it’s woven into
how businesses operate.”

• Taylor Anderson, Sr Dir of
  Global Insights Capabilities at
  Colgate-Palmolive

But, most consumers are undereducated

Only 12% of all consumers describe themselves as “very knowledgeable” about sustainable practices.

How knowledgeable do you consider yourself about sustainable
practices and their impact on the environment?

“I like when products have an
explanation of what they do [for
sustainability]. It gives you a little*
education and makes you feel*
that you made a smart purchase.”

• She/her, Age 41, Millennial

I would like to preserve
forests and oceans but I
really don't know anything
about being ecologically
friendly.”*

• She/her, Age 63, Boomer

Gen Z shoppers are willing to pay more for “green” products

You don’t have to be knowledgeable about sustainable practices to
care about how your purchases impact the planet.

Almost a quarter of Gen Z shoppers say they always pay more for products that are environmentally friendly or sustainable.

Do you pay more for products that are environmentally friendly or
sustainable?*

Compared to Boomers, twice as many Gen Z say they always pay more for sustainable products.

How will Gen Z sustainable shopping behaviors evolve?

We spoke to journalist and youth consumer analyst CCaasseeyy LLeewwiiss
about the trends we saw emerging in this data. Casey is a former
editor at Teen Vogue, MTV, and New York Magazine. Her following
numbers in the hundreds of thousands across Instagram, TikTok,
and her Substack “After School”, and her work spans publications
like ThheeNNeewwYoYorkrkTiTmimese,
TThheeWWaallllSSttrreeeettJJoouurrnnaall, her most recent
viral piece forTThheeCCuutt, and more. Here’s what she had to say.

“Whereas older consumers have learned over
time that they should favor green products*
over conventional, yyoouunngg ccoonnssuummeerrss ddoonn''tt*
tthhiinnkk ttwwiiccee–when budgets allow, at least.

Based on my research, the biggest factor
holding young people back from not shopping*
entirely eco-friendly is pprriiccee. This tension*

explains how Gen Z can care deeply about the environment and also
shop fast-fashion brands. The good news is that GGeenn ZZ hhaavvee oonnlyy
ssccrraattcchheedd tthhee ssuurrffaaccee ooff tthheeiirreeaarrnnininggppootteennttiaial l, so as they climb the
ladder in the workplace, they'll continue to spend on sustainability.*

Unlike a decade ago, when there were fewer sustainable options and
those available were more expensive, many consumer categories now
have**ssuussttaaiinnaabbllee** ooppttiioonns aatt aa vvaarriieettyy ooff pprriicceeppooiinnttss..

As this data shows, Gen Z won't hesitate to jump to another brand
that better suits their needs. It's not that brand loyalty is dead, but
young consumers are constantly exploring, and iifftthheeyyffinindd*
sssoommeetthhiinngg tthhaatt''ss mmoorree vvaalluuee--aalligignneedd,,tthheeyy'l'lllbbuuyyiti.t.”

When it comes to sustainability, some products and categories are more important than others

An overwhelming majority of shoppers across
generations say they are willing to pay more for
sustainable products “sometimes, depending
on the product.”

Do you pay more for products that are environmentally friendly or
sustainable?*

• She/her, Age 33, Millennial

“Food would be my number one
choice. When food is grown
more sustainably it should have
more nutrients and keep the soil
healthy for continued growth.”

• She/her, Age 62, Boomer

Consumers say sustainability matters most when purchasing food and personal care products, with a heavy focus on plastics and packaging

In an open-ended question, we asked respondents: “Is there a
specific product/category where sustainability matters more?”
Then, we counted the number of times certain words or
synonymous words appeared in responses.

“I think it's important to try and be more sustainable with
everything we use or consume.” - He/him, Age 32, Millennial

That’s what consumers say. But what do they do?

When asked what products mattered to them when it comes to
sustainability, respondents most often mentioned food, plastic, and
other packaging concerns.

With products in front of them, however, answers shifted–a
common dynamic known as the “say/do gap”.

How important is sustainability to you when purchasing a product in
the [X] category on a scale from 1 to 10?*

This discrepancy highlights the importance of conducting research
in context, to ensure consumers are reacting to your specific
products, and giving you targeted sustainability perceptions rooted
in your actual product experience.

Key Takeaways

1. Bake sustainability questions into your product research

The best way to understand what matters most to your target
consumers and go to market with confidence is with insights
gathered in context, specific to your category, product, and audience.
When you incorporate sustainability questions into your product
tests, you can build the data arsenal you need to win on shelf.

2. Segmentation is key

Understand the nuances of your consumer base so that you can
innovate and market products for the right people at the right time.
As Taylor Anderson, Senior Director of Global Insights Capabilities
for Colgate-Palmolive said: “For brands that span across wide
swaths of people, you need to have the ability to tailor your
communications as appropriate, when and where these people come
into contact with your brands.”

3. Invest in foresight

Don't be the last one on the bandwagon. Understand what’s working,
unmet needs, and identify early signals for what consumers are
interested in to anticipate future trends.

4. Win big with early adopters

Listen to the consumers who care the most and tease out their
most critical, passionate feedback to judge whether your products
have passed their high sustainability bar.

Ensure your sustainability investments land with Highlight

Beyond generational nuances, the demographics of your consumer
base are changing. The US is more diverse—especially among
younger generations—than ever before. According to the
Brookings Institution, nearly four out of 10 Americans identify
with a race or ethnic group other than white. As America’s
demographics evolve, so do our cultural preferences, needs, and
expectations.