What shoppers say about sustainability doesn't match how they spend

However, eco-friendliness and ethical considerations aren’t the primary concerns of most shoppers – despite what they tell other people and market researchers – about a desire to live a more sustainable lifestyle. 

This is one of the key findings from a study of sustainable health and beauty care products conducted by Yewon Kim, an Assistant Professor of Marketing at Stanford Graduate School of Business in the US, and Kristina Brecko, an Assistant Professor of Marketing at the University of Rochester, also in the US. The findings are published in Social Science Research Network (SSRN). 

“We wanted to study how companies behave in the absence of regulation – whether firms have an economic incentive to invest in marketing sustainable products,” Kim explains. 

The researchers analysed retail sales data for 30,000 products, from cosmetics and deodorants to shampoo and toothpaste. By reviewing information included in the products’ packaging, they found that one-third of the products made at least one environmental or social claim. 

These claims included being cruelty-free, having eco-friendly packaging, or being environmentally sustainable in some other way. 

Although 78% of respondents in a 2022 survey stated that a sustainable lifestyle was important to them, the researchers found that consumers’ in-store behaviour tells a different story.  

“It turns out that package size, ingredients and brand name are much bigger drivers of purchases than sustainability,” Brecko states. She and Kim also found that sustainable products are often less expensive than comparable products, suggesting that sustainability claims are not their primary selling point. 

Small brands step up 

Their findings also revealed that large brands offered fewer sustainable options than smaller ‘fringe’ brands. A similar pattern holds even among brands owned by a single company.  

“We observe that large manufacturers provide sustainable options through their smaller brands rather than adding them to their established brands,” Kim notes. 

Kim and Brecko suggest two reasons for this. Firstly, adjusting an existing product line to conform to sustainability claims can be expensive, especially when big manufacturers know their regular customers aren’t as concerned about sustainability as other features. 

Secondly, consumers tend to be more suspicious about larger companies engaging in greenwashing. 

As a result, big companies tend to introduce sustainable products by launching or acquiring smaller brands, which are seen as more authentic.  

Still, there are signs that sustainable brands – including the eco-friendly spinoffs owned by large companies – are going toe-to-toe with large manufacturers. In 2012, sustainable products sold by small brands captured less than 5% of the market share in the personal care industry. But by 2019, this number had shot up to 20%. 

“There’s a higher preference for those brands that have fully sustainable product lines, and fringe brands offer these at a higher rate, which suggests that it’s easier for them to do so because they have short product lines,” Brecko says. 

She and Kim found that consumers preferred buying sustainable products from fringe brands over established brands – and were even willing to pay more for the same item if it came from a mission-driven company. 

Therefore, the study suggests that consumer demand is, by itself, not enough to motivate large brands to invest in sustainable practices.  

“Based on consumer purchases alone, large brands with high brand equity have little incentive to widely incorporate these sustainability features,” Kim states.