Embracing sustainability at a time of rising consumer scepticism and declining discretionary spending requires active measures and bold communication to rebuild consumer trust.
Increasing awareness of greenwashing has led to a growing discontent with unsustainable practices. At the same time, more and more people are unwilling or unable to pay a premium for products that have a lower social or environmental impact. This paradox is at the heart of the new reality facing sustainable brands in the food and beverage industry.
Linda Lichtmess, a research consultant at Euromonitor International, and Chhavi Jatwani, director of research and innovation at the Food for Climate League, discussed effective strategies to build sustainable brands during an Fi Webinar Series discussion last month.
Consumer perceptions of sustainability have fluctuated, with a notable decline in 2024, driven in large part by economic challenges and fatigue with vague or misleading sustainability claims. Euromonitor data showed that amidst this “eco exhaustion”, 64% of consumers claimed they were trying to have a positive impact on the environment with their spending, but only 45% felt they were actually personally contributing.
Lichtmess noted: \"Greenwashing and multiple crises have shifted consumer priorities, but sustainability remains a norm, especially for younger generations.\" She emphasised that sustainability as a standard practice is increasingly becoming an expectation among the Millennial and Gen Z demographics.
Lichtmess shared data from Euromonitor indicating that over 40% of consumers see price as the main barrier to purchasing sustainable products. However, younger generations are more willing to invest in sustainability, linking food choices to mental and emotional well-being. \"Addressing mental health through sustainable food choices can be a unique selling point,\" she suggested.
And while sustainable practices are often perceived as expensive, Jatwani argued that this is not necessarily the case from a broader societal and ecological perspective. \"The supposed savings in conventional practices result in hidden costs elsewhere, such as health and environmental damage.” True cost accounting reveals these hidden costs and highlights the long-term benefits of sustainability.
With the need to earn back consumer trust as a top priority, brands need to more accurately measure and communicate sustainable impact. This requires high-quality data across the supply chain.
According to Chhavi, generic life cycle assessments (LCA) are insufficient. \"Assessments must be specific to the ingredient and supply chain, considering factors like land use change and water usage,\" she explained.
Transparency and scientifically backed claims are also crucial for (re)building consumer trust in sustainable brands. To do so, companies have to turn to new channels to communicate their commitments. Lichtmess noted that “the main sources of trust are family and friends, followed by social media influencers\". Effective communication strategies therefore have to involve partnering with influencers who can convey sustainability messages accurately and engagingly.
Chhavi underscored the role of social media and micro-influencers in reaching consumers. \"Investing in influencer networks ensures sustainability messages are communicated in relatable ways,\" she advised. Simplifying complex sustainability information through visual tools and user-friendly platforms can enhance consumer understanding and engagement.
According to Lichtmess, the companies at the forefront with the best practices in the industry tend to be startups or smaller brands. She cited plant-based milk company Oatly as a leading example of breaking through and mainstreaming a more sustainable alternative. \"Communicating sustainability pledges clearly and making sustainability mainstream is essential,\" she said.
Jatwani, who has extensive experience in food systems innovation, identified two main clusters of sustainability: environmental and socio-economic. Noting that the environmental and ecological systems are deeply interconnected, she stressed the importance of starting with soil health and using regenerative ingredients. \"Patagonia is a great example of a brand using regenerative ingredients,\" she said. \"Using tools like PlanetForward for life cycle assessments can help other brands identify the most impactful areas,\" she continued.
The popularity of sustainable ingredients like kelp and spirulina is on the rise. Jatwani highlighted the increasing interest in sea vegetables, driven by their nutritional benefits and potential for innovative uses. \"The Blue Foods Assessment Report and initiatives like COP28 are bringing more attention to aquatic food sources,\" she said. However, regional differences in production costs mean that US-grown sea vegetables will remain niche, likely limiting widespread adoption in that market in the near term.
With stronger regulatory regimes expected on the horizon – particularly in the EU because of the new CSDDD framework – navigating regulatory change is becoming an ever more significant challenge for food and beverage brands.
Lichtmess emphasized the importance of staying ahead of regulatory frameworks to ensure long-term sustainability. \"Proactive measures and partnerships with external assessors can help companies manage their supply chains more effectively,\" she noted. Some retailers have already taken proactive steps by assessing product sustainability to stay ahead of regulations – and to earn consumer trust. As regulations become more stringent, brands that adopt sustainable practices early will be better positioned for future success.
