Four Sustainability Trends That Are Shaping the Future of Retail
Author: Dave Hanson
Environmental sustainability has been an important factor in customer buying decisions for years, but today, it’s weighing on their minds more than ever. A recent study by the Grocery Manufacturer’s Association found that 74% of Americans are very concerned or extremely concerned about the environment, up from 38% just 10 years ago.
As Gen-Z consumers gain more buying power, the environment’s weight on buying decisions will grow even more. This group, which is set to become the largest group of consumers in the market by 2020, holds considerable sway. According to a recent joint study by UNiDAYS and AdAge, 82% of Gen-Z consumers are more likely to purchase a product if it is environmentally friendly. And 93% of Gen-Zs believe brands have an obligation to take on environmental issues.
Top companies seem to agree. 100% of the top 25 CPGs have made commitments to increasing recyclable content, minimizing packaging or reusing material. 80% of those companies have committed to producing 100% recyclable, reusable or compostable packaging by 2030 at the latest.
But this is only one step in the lifecycle. Now more than ever, consumers are looking at the entire lifecycle of the product – from production to supply chain to disposal/recycling – when they consider its sustainability. In some cases, this can have implications that measure in the hundreds of billions of dollars.
Let’s take a look at four growing sustainability trends that go beyond recycling, and will likely have a major impact going forward:
- Food Source Sustainability
In our blog last week, we discussed the popularity of “Alternative Proteins”, aka plant-based burgers and meat substitutes from the likes of Beyond Meat, Impossible Foods and now Tyson Foods. One of the driving forces behind this meteoric growth is the impact on the planet.
According to Barclays, who projected the alt protein category to reach $140 billion over the next 10 years, “Sustainability is increasingly more relevant as consumers, especially Millennials and Gen Z, have become more aware of the damage that food production has caused to the planet,” the company said in a recent report.
Beyond animal welfare concerns, the environmental impact of beef production is one of the leading threats to the planet. The average cow emits 500 liters of methane on a daily basis, and on a global scale, cows contribute more greenhouse gasses than cars.
Impossible Meats provided a comparison graphic in a news release earlier this year, showing the environmental impact of their Impossible Burger vs. a ground beef burger. The meatless alternative resulted in 89% less global warming potential, 87% less water consumption and 92% less water pollution.
Expect food production transparency to be a growing trend moving forward. Consumers will be more vigilant than ever about the nutritional value and sustainable production of their food, information which has played a huge role so far the massive successes of Impossible Foods and Beyond Meats.
- Adopting Durable, Reusable Packaging
While many companies have worked to make their packaging increasingly recyclable, some have started thinking a little farther outside the box. Leading the charge is Loop, a company who sees recycling as a failing industry.
Loop has partnered with many of the world’s largest brands to offer a new model from a somewhat old-fashioned idea. Like the milkmen of the 1950’s, Loop delivers customers their favorite products in durable, reusable containers.
The products are delivered directly to the customers’ homes inside a reusable shipping tote. When they’re finished with the products, they go right back into the Loop tote, but instead of going to the landfill, they go back to Loop distribution centers where they are cleaned, sterilized, refilled and reused by the next customer.
Brands such as Nestle, Unilever, P&G and Clorox, along with retailers like Walgreens and Kroger, have already jumped onboard, as Loop launched last month in the Mid-Atlantic US and Paris, FR.
Increasing Efficiency with Innovative Packaging
Secondary and tertiary packaging generate a considerable amount of waste, especially as e-commerce continues to grow at a meteoric rate. An article from Fast Company last year noted 165 billion packages are shipped in the US each year, roughly the equivalent of 1 billion trees. The packages shipped to stores create a substantial problem as well, a problem which multinational food packaging company Tetra Pak as taken an innovative approach to tackling.
In March, Tetra Pak announced their cube packaging solution, a design which allows six triangular packages to form a cube, optimizing distribution and storage. This innovative solution results in far less secondary packaging for dairy, juice and liquid foods contained within. The products are also manufactured using bioplastics derived from sugar cane – with zero fossil fuels used in production.
Companies have also started experimenting with cans for traditionally bottled products like water and wine. The cans are easier to ship and infinitely recyclable. It is estimated that 80% of all the aluminum ever produced is still in circulation today.
These are just a couple of examples, but look for a lot of efficiency-minded creative innovation on this front as companies reimagine their packaging over the next decade to meet their goals of being 100% reusable, recyclable or compostable.
- Reducing the Carbon Footprint of Expedited Shipping
While many CPGs have already committed to reducing waste and carbon emissions, one interesting trending topic that caught fire last week was the environmental cost relative to the next-day delivery trend.
According to the report, the combined annual emissions from UPS, USPS and FedEx produce the equivalent of 7 million cars. With Amazon and Walmart adopting next day shipping and Target installing a same day delivery program, these numbers are sure to grow, unless current delivery models evolve.
Of course, the industry is already trending toward a solution, as unmanned drones and electric autonomous vehicles kill a multitude of birds with a single stone: CO2 emissions, growing shipping costs and customer demand for expedited delivery, to name a few.
The unknown here is the speed to market and how the information will be leveraged from a marketing standpoint. Who will successfully be able to pitch the idea of being the fastest, cheapest and most sustainable delivery option?
Think of how Subway hopped on the nutrition train just at the right time with their Jared campaign back in 2000. Sustainability may be similarly primed for capitalization 20 year later. In this case, the right advertising campaign could have very lucrative results.
What other sustainability trends have you witnessed in 2019? What do you think about the durable, reusable packaging trend? What types of alternative sustainable foods or packaging has caught your eye? We’d love to hear what you think. Sound off on social media now and join the conversation.