Consumers willing to pay more for brands committed to sustainability

Nielsen’s 2015 Global Corporate Sustainability Report has revealed that brands showing a commitment to sustainable practices are receiving support from consumers, who are willing to pay more for their products.

According to the report, 68% of South African consumers are prepared to pay a premium for brands that have shown they are dedicated to making a positive social and environmental impact. This figure stood at 54% in 2013. Globally, this figure lies at 66%, which has increased markedly over the past two years. “South Africa is following the same global trend as consumers become more aware of socially involved corporates and are willing to respond to their involvement and make their own contributions in different ways,” says Nielsen marketing director Ailsa Wingfield. “Sustainability is on the agenda for most companies these days, whether it’s in areas such as waste management, the support of NGOs or environmental issues and the like,” she adds.

Locally, think Colgate through its work with the Smile Foundation, KFC and its Add Hope campaign; P&G and its work around women and equality; Woolworths through fair trade, sustainable farming and fishing and its collaboration with Pharrell Williams; and the Tiger Brands Foundation’s in-school feeding programme.

Social responsibility is an important aspect of a brand’s reputation management. The report reveals that companies with strong reputations outperform others in attracting talent, investors, community partners and customers. Additional findings in the South African market show that trust is a leading influence on purchasing decisions, with 65% of respondents purchasing products made by a brand or company they trust, 57% choosing a product for its health and wellness benefits and 53% basing the choice on the fact that the product was made from fresh, natural or organic ingredients.

Wingfield cites additional research undertaken by Nielsen a few years ago which looked at environmental factors involved in making purchasing decisions. “Top of the list for South Africans was areas where they could be involved and contribute to sustainable practices. Also important were energy efficient products and products that have little or no packaging.”

Wingfield says despite consumers’ willingness to pay more for sustainable brands and products, availability and extremely high prices can be problems. “There remains a lot of work to be done to bring products to market that are both accessible and affordable,” Wingfield concludes.

The big take-out: In line with global trends, South African consumers are prepared to pay a premium for brands and products that are committed to sustainability.