DMI SUMMARY: Excerpts from The Hartman Group, Sustainability Report- 2017

Transcription

1 DMI SUMMARY: Excerpts from The Hartman Group, Sustainability Report- 2017

2 Key Takeaways Consumers are becoming more purposeful in their consumption. Though the gap between aspiration and action varies with consumers level of engagement with sustainability, we see this conscious consumerism only gaining power and momentum in the future. Consumers continue to lack awareness about companies responsibility efforts. Addressing this communications gap especially via social media may help bring in new customers. Packaging and signage is still the primary way to communicate with consumers, who look for an accumulation of details to assess authenticity. While certifications go a long way toward building sustainability credentials, claims must be backed up in brand narrative and company policies that communicate a sincere commitment to stated sustainability goals. 2

3 Background & Methodology Timing Approach Topics August 2017 Quantitative Online survey among a national representative sample of 1,500 U.S. adults age 18 to 71; Primary grocery shoppers Familiarity and concepts/attributes associated with sustainability and corporate transparency Attitudes and behaviors associated with sustainability and corporate transparency Engagement with key sustainability issues and certifications Purchasing criteria and barriers and willingness to pay for sustainability-related attributes in key macro-categories Qualitative In-home ethnographies: 2-hour in-home individual interviews, including a tour of sustainability-related spaces and kitchen food storage Virtual interviews: 75-minute interviews via Skype NOTE: Age cohorts are defined as: Gen Z: aged (base size is too small to report in most cases) Millennials: aged Gen X: aged Boomers: aged

4 SUSTAINABILITY WORLD MODEL 87% of consumers are inside the World of Sustainability As consumers become more engaged and as the breadth of their sustainability-driven behaviors grows, the gap between their aspirations and actual behaviors narrows. Periphery (16%) 87% Outer Mid-level (29%) Inside the World of Sustainability Inner Mid-level (29%) Core (13%) Segmentation based on reported respondent behavior regarding: animal testing, packaging, community issues, supporting companies helping local community, recycling, price. SUST2017. Base: Total (n=1500). Q12. Are you familiar with the term sustainability? Base: Total (n=1500); Core (n=203); Inner Mid-level (n=449); Outer Mid-level (n=436); Periphery (n=228); Outside (n=184). 13% Inner Mid-level 29% Outer Mid-level 29% Periphery 16% Outside 13% 13% 58% 16% Core Core Inner Mid-level Inner Mid-level Outer Mid-level The Core is most intensely involved in sustainability. Promoting sustainability for the benefit of the greater good rather than personal benefit is a defining feature of their values, consistently driving decision making. The Mid-level represents the majority of consumers and thus the biggest opportunity. Inner Mid-level (29%) consumers adopt Core attitudes and behaviors pragmatically and are often more driven by personal benefits. Outer Mid-level (29%) consumers are occasionally influenced by sustainability in their purchases when it intersects with personal benefits. The Periphery is least involved in sustainability. rarely consider sustainability explicitly in their decision making, but it does play a role in their value system more generally.

5 SUSTAINABILITY WORLD MODEL Sustainability trends originate with Core consumers and are adopted more pragmatically by the Mid-level Mid-level consumers offer the biggest opportunity for sustainable messaging, products, and services. They look to the Core for purchase criteria, knowledge, and potential actions to take but choose trends that offer them practical, accessible, and convenient ways to live their values. 13% 29% 29% 16% Core Inner Mid-level Outer Mid-level Periphery Greater Good Authenticity Transparency Trust Transparency Trust Experience Safety Experience Safety Comparability Convenience Safety Comparability Convenience Price 13% Outside Segmentation based on reported respondent behavior regarding: animal testing, packaging, community issues, supporting companies helping local community, recycling, price. SUST2017. Base: Total (n=1500). Trends The Mid-level are influenced by the Core. Opportunity The Periphery borrow sustainability cues from the Mid-level. The Outside is not concerned with sustainability in their lives or purchasing yet.

6 DEFINING SUSTAINABILITY Four overlapping zones of responsibility help explain how consumers think about, and act upon, sustainability issues Sustainability is a complex term that incorporates not only the environment but also how humans interact and fit within it. Even unengaged consumers recognize connections between personal benefits and wider social, economic, and environmental issues. Consumers tend to evaluate products, services, and actions through four zones of responsibility: personal, social, economic, and environmental. Consumers can compartmentalize each of these zones into discrete areas separate from one another. However, for the engaged sustainability consumer, these zones do not exist in isolation; each is fundamentally linked to one another as parts of a whole. Environmental Responsibility for the well-being of the planet at both the local and global level Economic Responsibility for the economic well-being of one s town, region, or nation or for businesses one supports Zones of Responsibility Personal Responsibility for one s own (or one s family s) needs and desires Social Responsibility for the well-being of others, including animals

7 DEFINING SUSTAINABILITY Connections among attributes reveals 4 key dimensions of sustainability that align with the zones of responsibility Sustainability Means Consumer-defined Dimensions Among those familiar with the term Consumer definitions of sustainability tend to cluster within a few key dimensions that are aligned with zones of responsibility Ability to last over time Conserving natural resources Recycle, reuse, reduce Environmentally friendly Ability to support oneself (self-reliance) Responsible farming methods Responsibility Reducing carbon footprint Maintaining a clean water supply Green Stewardship of land Economic viability Humane treatment of animals Simple living High quality All-natural Fair Trade Organic Local Social activism Connecting with others Reduction of meat consumption 58% 50% 46% 41% 35% 34% 33% 31% 26% 25% 25% 23% 13% 13% 12% 12% 10% 10% 6% 6% 5% 5% SUST2017. Q13. The word "sustainability" may mean different things to different people. What does it mean to you? (Please select all that apply). Base: Familiar with term sustainability Total (n=1243). Principal factor analysis identified 4 factors or themes among the list of sustainability attributes and then identified which meanings comprise each theme. Any respondent who selected one or more attributes within each theme was assigned as present in that theme. An individual respondent could qualify for multiple themes. Ability to support oneself (selfreliance) Ability to last over time Economic viability Reducing carbon footprint Stewardship of land Environmentally friendly Conserving natural resources Green Maintaining a clean water supply Responsible farming methods Responsibility Recycle, reuse, reduce All-natural High quality Organic Simple living Social activism Connecting with others Fair Trade Humane treatment of animals Local Reduction of meat consumption

8 DEFINING SUSTAINABILITY In practice, the zones of responsibility overlap, especially for more engaged consumers who tend to think about sustainability holistically In general, the more zones an attribute touches for a consumer, the more influential it is in their purchasing. Attributes in the center are especially powerful because they encompass more zones of Re-usable packaging responsibility for a wider set of consumers. Simple/minimal ingredients Hormone/antibiotic-free Locale Humanely raised/slaughtered Pesticide-free Grass-fed Cage-free/ free-range Ingredients not banned in another country/state Less processed ingredients Biodynamic Minimal/no pollutants Non-toxic packaging Non-GMO Organic Fair/direct trade Locally made Country of Origin B Corp Political affiliations Local/cooperative ownership Ownership transparency Well-treated/satisfied employees Wild-caught Compostable/ biodegradable Land stewardship Involvement in community groups Minimal packaging Domestic (USA) production Locally sourced Recyclable Renewable/limited energy use Preventing pollution of air, water, soil Minimizing carbon footprint

9 DEFINING SUSTAINABILITY Sustainability is more likely to reflect future and farm/land-oriented meanings than in the past a responsibility to future generations Ability to last over time Conserving natural resources Recycle, reuse, reduce Environmentally friendly Ability to support oneself (self-reliance) Responsible farming methods Responsibility Reducing carbon footprint Maintaining a clean water supply Green Stewardship of land Economic viability Humane treatment of animals Simple living High quality All-natural Fair Trade Organic Local Social activism Connecting with others Reduction of meat consumption Sustainability Means Among those familiar with the term 13% 13% 12% 12% 10% 10% 6% 6% 5% 5% -3pp 50% 46% 41% 35% 34% +5pp 33% +7pp 31% 26% 25% 25% 23% +7pp 58% +6pp 4-year trend from 2013: Base: Familiar with term sustainability and aged (n=1356); 2017 (n=1208) SUST2017. Q13. The word "sustainability" may mean different things to different people. What does it mean to you? (Please select all that apply). Base: Familiar with term sustainability Total (n=1243). Sustainability is associated with a wide range of concepts. More than environmentalism, social activism and product purity are key elements for many consumers. More see it as an essential responsibility than in the past. Consumers who are more engaged with sustainability associate it with a more wide-ranging set of concepts than others. Core consumers associate sustainability more strongly with more concepts. Mid-level consumers are likely to see sustainability as a quality cue, associating it with high quality, all- natural, and organic.

10 WHO IS RESPONSIBLE FOR SUSTAINABILITY? Consumers across the World of Sustainability see themselves as primarily responsible for sustainability efforts Governments and large companies still play a key role, however, with consumers placing more responsibility in government than in the past. Many consumers see those institutions as responding to consumer/citizen demand and so place primary responsibility for sustainability with individuals. Who Bears the Most Responsibility in Making Our World More Sustainable? Individuals Governments Large companies Environmental or social justice groups/non-profits Small companies 10% 6% +5pp +3pp 4-year trend from 2013: Q69 Base: Total aged (n=1841); 2017 (n=1456). SUST2017. Q69. In your opinion, who bears the most responsibility for making our world more sustainable? Please rank the choices from 1 to 5, with "1" being most responsible and "5" being least responsible. Base: Total (n=1500). Ranked 1 st 1 st or 2 nd 1 st, 2 nd or 3 rd 24% 23% -5pp 27% 25% +5pp 37% +4pp 50% 46% 52% 47% 54% 60% 66% -5pp -6pp +3pp 73% -7pp -6pp +9pp Millennials, who are more likely to say their purchasing has a larger impact than their voting, assign a larger role to individuals than older generations. Gen X and Boomers believe large companies have a bigger role to play in sustainability. Political orientation influences how consumers see the role of government: Liberals are more likely to view governments as having more responsibility. Moderates and conservatives see a bigger role for individuals and companies especially small ones.

11 WHO IS RESPONSIBLE FOR SUSTAINABILITY? Qualitatively, however, we see a more nuanced assignation of responsibility to various institutions and actors Americans belief in individualism likely plays a role in their sense of how much power individuals have over company and government policies and practices. Core and some Inner Mid-level consumers tend to question how much individuals can actually achieve. They understand the scale of what government intervention and corporate policy can accomplish. While they continue to strive to do all that they can themselves, they acknowledge that individual purchasing has little effect compared to other, more difficult lifestyle changes. Core Inner Mid-level Outer Mid-level Periphery I think government regulation plays the biggest role in moving towards sustainability, even more so than individual practices. Gen X, Core, male Politically, there are a lot of changes that could be made. Everyone can make a difference, but the people in power can make a bigger difference faster. Millennial, Inner Mid-level, female I fear that people aren t catching on fast enough, that people will take the approach of we ll just see what happens instead of being proactive and assuming that there is something going on and taking steps for the environment. Gen X, Outer Mid-level, male I believe the government should completely step out of the way. Millennial, Periphery, male A Core consumer s photo of their local food pantry where they volunteer

12 SUSTAINABILITY IN PURCHASING More than a quarter of consumers claim that environmental and social concerns impact much of their purchasing Predictably, the Core and Inner Mid-level factor sustainability into their purchasing the most. However, sustainability is an important consideration for other demographic groups as well, especially Millennials. Always/ Usually Always How Often Do Environmental/Social Concerns Influence Your Purchase Decisions? 26% 22% 60% 35% 22% 7% 20% 9% 4% Increased Sustainable Purchasing in Past 12 Months 50% 31% Total Core Inner Midlevel 15% Outer Midlevel 9% 8% Periphery 4-year trend from 2013 no significant changes. SUST2017. Q9. How often are your purchasing decisions based upon your concerns for issues such as the environment and social. In the past year, how, if at all, has your purchasing of sustainable products changed? Base: Total (n=1500); Core (n=203); Inner Mid-level (n=449); Outer Mid-level (n=436); Periphery (n=228); Millennials (n=546); Gen X (n=369); Boomers (n=529); Kids <18 in HH (n=473); No Kids <18 in HH (n=1027); Liberals (n=413); Moderates (n=554); Conservatives (n=444); Women (n=790); Men (n=703) Total Core Inner Midlevel BCD CD D Outer Midlevel Periphery Environmental/social concerns are more important purchasing considerations for: Millennials (33% always/usually vs Gen X 23% and Boomers 20%) Parents (31% always/usually vs 24% for those without children <18 in the house) Liberals (36% vs Moderates 23% and Conservatives 22%) These groups are also more likely to say they ve increased their sustainable purchasing in the past year: Millennials and Gen X (23% and 25% vs 19% Boomers) Women (25% vs men 20%) Parents (27% vs 20% for those without kids) Liberals (32% vs Moderates 20% and Conservatives 19%)

13 LEARNING ABOUT SUSTAINABILITY More have recently sought sustainability-related information than 5 years ago, with product labels and online being key sources 4-year trend from 2013: Base: Total age (n=1841); 2017 (n=1456). * No 4-year trend available. SUST2017. Q16. Which of the following INFORMATION SOURCES have you used in the PAST 3 MONTHS to learn about SUSTAINABLE PRODUCTS/SERVICES OR COMPANIES? (Please select all that apply). Base: Total (n=1500); Millennials (n=546); Gen X (n=369); Boomers (n=529). Sustainability Information Sources Used in Past 3 Months ANY SOURCE Internet websites Internet search engine Social media site/app Bloggers Product label Product company's website Product company's advertisement Product company's annual/csr report TV/Radio Books/Magazines Newspapers Family member Friend or colleague In-store information Retailer websites* Govt agency (e.g., EPA, USDA) Medical prof. (e.g., doctor, nurse) Nutritionist, Dietician, Sports Coach* Non-profit consumer advocates (e.g., EWG)* Special interest orgs (e.g., Audubon Society) 7% 16% 14% 4% 16% 11% 10% 16% 16% 17% 11% 8% 6% 4% 10% 8% 28% 27% 22% 29% +4pp +4pp +4pp +10pp +14pp +8pp +7pp 69% 48% Net Online +18pp 42% +11pp 26% 25% +5pp 23% 14% 14% +15pp Net Package/ Company Communications Net Traditional Media Net Family/ Friends Net Retailer/ In-store* Net Expert Authority* Net third-party Organization* Unsurprisingly, more Core and Inner Mid-level consumers have sought sustainability information recently, and they use more sources than less engaged consumers. Millennials are much more likely than older generations to have sought out sustainability information, especially online. 79% of Millennials have sought out sustainabilityrelated information from any source in the past 3 months. This is significantly higher than Gen X s 66% and Boomers 58%.

14 KEY SUSTAINABILTY ISSUES ON THE HORIZON Many of the areas to which consumers are turning their attention include issues where multiple zones of responsibility overlap Waste Food waste while some face food scarcity Environmental impact of trash Industrial & agricultural waste Lack of recycling & composting programs in rural areas Monoculture and deforestation Ecosystems less resilient to climate change Destruction of rainforests Critical species endangered Palm oil production Cultural & social upheaval in deforested areas Water quality, scarcity, and rights Contaminated tap water and public water sources Bottled water & trash production Water rights on indigenous lands Water scarcity & unequal access Labor issues Forced labor and transparency of sourcing (particularly seafood) U.S. economic need for imported labor Living wages for retail & food service workers Fair trade for global farmers GMOs & glyphosate Impact of GMOs on plant diversity Potential impact of glyphosate & GMOs on human health Glyphosate resistance in mutated plants The impact of meat Impact of hormones/antibiotics on human health Requires more water, land, and energy resources Animal welfare and treatment Impact of meat production on climate change

15 DEFINING TRANSPARENCY Consumers associate transparency with how authentically committed a company is to ethical action Transparency is more than a sustainability checklist. Consumers want to understand how a company addresses the 4 zones of responsibility, including: Personal what ingredients are in a product and why? Where do they come from? Social who is making the product, where, and how they are treated? Economic why are certain business practices and goals prioritized over others? 69% Environmental Responsibility for the well-being of the planet at both the local and global level of consumers would like companies sustainability practices to be more publicly visible (4 or 5 on 5pt scale) Personal Responsibility for one s own (or one s family s) needs and desires Environmental what is a company doing to conserve and protect natural resources? However, naming a transparent company is difficult for most consumers, even in cases when they have already talked about companies that they know and trust, pointing to a communications gap. Economic Responsibility for the economic well-being of one s town, region, or nation or for businesses one supports No 4-year trend available. SUST2017. Q14. NEXT, we are going to ask you some questions about "SUSTAINABLE PRODUCTS. "How strongly do you agree or disagree with each of the following statements? Top 2 Box 4 or 5 (strongly agree) on 5pt scale. Base: Total (n=1500) Social Responsibility for the wellbeing of others, including animals

16 SHOPPING FOR TRANSPARENCY Besides ingredients, consumers want transparency around quality control, animal welfare, and labor practices More sustainability-minded consumers tend to care more about business practices related to the greater good than others animal welfare, environmental impact, and community involvement. All segments want to know about quality control basics and sourcing especially country of origin. Ben & Jerry's has a reputation of treating their employees well, being very open about company policy, and very much involved in the health and environmental space. Those are the kinds of things I like to see. Outer Mid-level, Gen X, male No 4-year trend available. SUST2017. Q101. To earn your trust, about which of the following business practices should a company be open and honest? (Please select up to 5 items that are most important to you). Base: Total (n=1500) Business Practices About Which Companies Should Be Transparent Ingredients in a food/bev product How products manufactured to assure quality, safety standards Product/service problems, issues, recalls How animals used in products are treated Actions taken to reduce impact on env. Whether company gives back to community Where product ingredients are sourced Where products are manufactured/ assembled Locations and types of suppliers used How employees are treated Diversity of workforce Who owns company Charities/causes the company supports Political party/politicians company donates to 10% 20% 18% 15% 13% 11% 32% 29% 38% 46% 44% 45% 42% 60% 83% Quality control 72% Social/ environmental responsibility 63% Sourcing 47% Labor practices 32% Ownership/ affiliations

17 COMMUNICATING TRANSPARENCY Ideally, consumers want a company s responsibility efforts stated on-pack, the primary area where they see and assess claims Packaging is the primary way consumers interact with information from a CPG company and thus is the most convenient way for them to learn about corporate responsibility efforts. However, the company website is a good backup, especially if claims are verifiable from other, independent sources. Despite preferring companies to communicate sustainability claims on-pack, consumers claim to be skeptical when they see them I never read food labels because they re deceptive and confusing. I look for seals Greenguard is one of them but I'm not sure how strict they actually are. Products can just be labeled that way without anything behind them. Core, Gen X, male Capital letters indicate statistically significant differences among the indicated groups at the 95% confidence level. SUST2017. Q103A. How would you prefer to learn about companies' policies and practices related to corporate responsibility issues like sustainability, social issues, labor issues, charitable giving, or community involvement? (Please select all that apply). Base: Total (n=1500); Core (n=203); Inner Mid-level (n=449); Outer Mid-level (n=436); Periphery (n=228); Millennials (n=546); Gen X (n=369); Boomers (n=529). Preferred Sources of Information About Corporate Responsibility Efforts On-product packaging Company website From the news media From third-party orgs (e.g., Consumer Reports, Humane Society) Through social media From retailers or stores Through advertisements Special reports from company (e.g., quarterly report) QR code on pack to scan for more info s from company Total 17% 16% 14% 33% 31% 29% 27% 26% 49% 45%

18 PACKAGING CONTENT For food and beverage, the most influential certifications concern pesticides, animal welfare, fair trade, and GMOs USDA Organic Energy Star Qualified Certified Kosher Fair Trade Non-GMO Project Verified Know a lot Certified Vegan American Grassfed Certified Humane Know a lot/ little about Animal Welfare Approved it Certified Pesticide Residue Free Rainforest Alliance Certified Certified Halal Certified Carbon Neutral Food Alliance Certified Transitional Organic Fair for Life GAP 5 Step Animal Welfare Rating System FSC Certified (Forest Stewardship Council) MSC Certified (Marine Stewardship Council) Oregon Tilth Certified Organic ASC Certified (Aquaculture Stewardship Council) Certified B Corporation Demeter/Certified Biodynamic 22% 64% 19% 55% 16% 53% 15% 53% 13% 44% 13% 44% 9% 40% 10% 37% 11% 36% 9% 32% 6% 25% 5% 23% 6% 23% 5% 20% 5% 18% 5% 18% 5% 16% 4% 16% 5% 16% 5% 15% 4% 15% 4% 14% 4% 13% 27% 38% 12% 31% 17% 35% 15% 33% 26% 38% 36% 40% 20% 13% 34% 22% 22% 27% 23% 28% 26% 26% 24% 23% 22% 23% SUST2017. Q64A. There are many types of claims, certifications, and seals that appear on product packaging. For each claim, certification, or seal below, please tell us which answer best describes your experience with it. Base: Total (n=1500). Q64B. Here are all the claims, certifications, and seals you indicated you knew a bit about. For each one, please indicate how it affects your purchasing when you see it on an item you're considering. Base: Know a lot/little about certification (n varies from ). Certification Engagement % who know a lot/little about certification Impact on Purchasing Among those who know a lot/little about certification 66% 79% 65% 68% 70% 74% 77% 75% 62% 60% 59% 61% 58% 62% 57% 58% 51% 58% 53% 55% Much more likely to purchase Much/somewhat more likely to purchase

19 PACKAGING LABELS Sustainability-minded consumers scrutinize a wide amount of information on packaging labels, beyond just certifications Sustainability information is part of a constellation of other quality cues that consumers consider when they approach products. Consumers weigh sustainability cues with others, including taste, health and wellness needs, price, and freshness. While sustainability consumers often look first to third-party certifications, they interpret these certifications through brand and company narrative. They look for narratives that back up certifications and claims with details on the who, what, where, when, and why behind the product. Narrative elements not associated with a certification such as charitable giving, involvement within a community, or a specific mission can be compelling points of evidence underlying a strong sustainability and transparency story. Only a few certifications speak for themselves. Most require further explanation in product narratives. The B Corp certification, for instance, reflects strong credentials for employee welfare, environmental stewardship, and transparency all appealing to engaged sustainability consumers. Even Core consumers, however, are often unfamiliar with it and what it represents. I don t know what some of these labels mean, but it looks like they are really making an effort. Non- GMO is something that I generally look for, and I certainly appreciate that it s 100% wind power. I ll have to look into what B-Corp and TestPledge mean. Millennial, Inner Mid-level, female

20 PACKAGING PRIORITIES Consumers look for a variety of positive cues in packaging materials when they are purchasing products Just as the purchase criteria are additive (e.g., convenience is important not only to the Periphery), the priorities each segment places on packaging labels and materials accumulate the more involved a consumer is in the World of Sustainability. Typical Priorities Toward Packaging by Segment Core Inner Mid-level Outer Mid-level Periphery Ingredients & Nutrition Panel Short ingredient list No chemicals No excess sugar No hormones & antibiotics USDA Organic Claims & Certifications Non-GMO Charitable giving Fair trade Ethically raised animal (e.g., pasture-raised, grass-fed) Recyclable Made of recycled/renewable resources Materials Reusable Biodegradable Minimal/non-existent

21 SUSTAINABILITY IN FOOD AND BEVERAGE What qualifies as a sustainable food or beverage varies depending on one s sustainability orientation For less engaged consumers in the Outer Mid-level and Periphery, healthy food is seen as inherently more sustainable. Fresh, less processed foods especially organic are seen as better for me, better for the world. For more engaged consumers, standards are higher. The most sustainable foods are those one has grown oneself, and beyond that, whole foods preferably domestically produced that one processes and cooks oneself. Processed food in general is seen as less sustainable, and these consumers look for detailed claims and certifications to determine a packaged product s health value, environmental effects, labor issues, and company values. Consumers across the board see locally sourced food and beverage as more sustainable, as well as fresher and healthier. However, sustainability orientation still influences how likely one is to actually seek out and pay more for local products. A Core consumer s backyard garden with a variety of herbs and berries, maintained with a passive water collection system. I feel that if you really want to support sustainability, you either have to plant your own food or buy local. Inner Mid-level, Millennial, female

22 SUSTAINABILITY IN FOOD AND BEVERAGE More engaged consumers value sustainable food/beverage attributes more, but so do Millennials and women Importance of Sustainability in Food and Beverage Purchasing Top 2 Box 4 or 5 (very important) on 5pt scale Total Capital letters indicate statistically significant differences among the indicated groups at the 95% confidence level. SUST2017. Q43A_1. For each attribute below, how important is it to you when deciding which FOOD AND BEVERAGES to purchase? Base: Total (n=1500); Core (n=203); Inner Mid-level (n=449); Outer Mid-level (n=436); Periphery (n=228); Millennials (n=546); Gen X (n=369); Boomers (n=529); Men (n=703); Women (n=790). Free of potential toxins Supports US economy Good animal welfare practices Fair treatment of workers/employees Minimizing pollution of air, water, soil Minimizes food waste Conserves natural habitats, resources Supports local economy Good pay/benefits for workers/employees Natural agricultural methods/practices Supporting small companies Minimal/eco-friendly packaging Fair trade sourcing of products/ingredients Organic ingredients/production practices Small carbon footprint Involvement/support for social causes Knowing who owns the company Supporting large companies with big impact 71% 61% 59% 58% 57% 54% 52% 52% 52% 48% 47% 44% 41% 41% 40% 40% 30% 27% Core Inner Midlevel Outer Midlevel Significantly Higher Among Periphery Millennial Gen X Boomer Men Women (A) (B) (C) (D) (E) (F) (G) (H) (I) BCD CD D CD CD E E BCD CD D H BCD CD D E E BCD CD D H BCD CD D H BCD CD D BCD CD D BCD CD D BCD CD D G G H CD CD D BCD CD D H BCD CD D G BCD CD D G G BCD CD D G H BCD CD D G H BCD CD D G G CD CD FG G

23 SUSTAINABILITY IN FOOD AND BEVERAGE Sustainability-related attributes appear to be more important to younger consumers than older ones Although Boomers are more likely to be Core or Inner Mid-level consumers, they are less likely than Millennials in general to rate sustainability attributes as important to their purchasing or to be willing to pay as high a premium for them. Why is this? Millennials have grown up with sustainability as a civic virtue and place more social responsibility in individual purchasing than Boomers Millennials are a bit more likely than Boomers to define sustainability in terms of personal health. This suggests that they are more likely to see sustainability-related attributes as quality cues in the mindset of better for me, better for the world. Millennials tend to be less driven by price, brand, and familiarity than Boomers in their grocery shopping and more influenced by product attributes. Despite their attitudes toward sustainability, it seems that Boomers are less willing to break out of established habits related to brand preferences and discounts. Millennials value sustainability attributes across the board For me, how we eat is very important, so I don t feel like I m wasting money getting more expensive things. I m looking for a good price, but if I sacrifice myself and get cheap food, in 2-3 years maybe I ll get sick. Inner Mid-level, Millennial, female I like this Bob s Red Mill Coconut Flour. One of the main things I like to see is this organic USDA stamp. I also like that it s an employee- owned company, so it s not so corporate. It feels good to support a good small company. Periphery, Millennial, male But Boomers less so. My priorities are: it has to taste good, and I do think about impact, but it also has to be affordable. I mostly shop at the grocery stores, not so much the farmers market. They re fantastic, but the idea of paying $4 for a tomato is crazy to me. Inner Midlevel, Boomer, female

24 SUSTAINABILITY IN FOOD SERVICE For all but the most engaged, sustainability remains a bonus and a quality cue when consumers dine out Consumers tend to be focused on other priorities when dining out, making sustainability lower on their priority list. Even Core consumers perceive dining out to involve sacrificing some of their standards for the sake of others preferences, convenience, price, or availability. However, consumers do associate sustainability in dining out with farm-to-table restaurants and see it more as a quality cue. Good animal welfare, local sourcing, sustainable agriculture/production these have all become de rigueur for upscale restaurants. Sustainability does have a role to play in convenience and value-oriented food service, however. QSR (Quick Service Restaurants) and fast casual customers value sustainability in those restaurants similarly to food and beverage overall. However, fast casual customers appear to expect more from those restaurants than from QSR, rating sustainability criteria higher in importance than for QSR. Environmental Responsibility for the well-being of the planet at both the local and global level Economic Responsibility for the economic well-being of one s town, region, or nation or for businesses one supports Personal Responsibility for one s own (or one s family s) needs and desires Social Responsibility for the wellbeing of others, including animals