How growing environmental consciousness drives consumer purchasing decisions around the .

Global report on consumer insights About this research

Carried out over several months in 2019, Topics explored in relation to consumers’ this research follows a similar study from views of packaging and sustainability: 2017. It examines consumer trends and –– Attitudes and behaviours in relation attitudes around the environment and to the environment sustainability within the food and beverage –– Expectations for sustainable packaging industry, with a particular focus on the –– Attractive product and packaging attributes in relation to sustainability environmental performance of food and –– Understanding and perceptions about beverage packaging. key sustainability terms and expressions associated with the area –– The most efficient media and messages to engage consumers on environmental topics Geography and audience

The test group included 7,500 consumers aged 18–65 from 15 markets (approximately 500 per market) to create a global picture of consumer attitudes to packaging and sustainability. Respondents completed an online quantitative survey.

7,500 CONSUMERS Age 18 – 65 500 interviews per country Online (quantitative)

15 MARKETS France Saudi Arabia Brazil South Africa Japan UK Turkey India Italy USA Russia China Executive summary

Five clear themes emerged from this research. They confirm that consumer concern and expectations around environmental issues are on the rise – and show further evidence of the commercial opportunity for brands that act on sustainability.

Consumers are more concerned about ‘Doing something good’ is environmental issues and more demanding an important motivation. about environmentally sound products. Responsibility for future generations and the feeling of doing the They are more proactive and more conscious in the decisions they right thing for the community are key drivers behind consumers’ take – and prepared to pay more for environmentally sound choices. environmental choices. But their expectations are high. Today, almost half of consumers are concerned (caring strongly about the environment when buying Packaging with environmental products) or conscious (responsible when buying products). features conveys ‘premium-ness’. This has a positive impact on brand consideration and is a trend Consumers expect information and that has been growing over time. Price is seen as less of a barrier action from the packaging industry. to environmental features than it once was, with 43% of consumers There’s growing interest in environmental information, with social now willing to pay more for them. media the principal medium alongside TV/radio and on-pack communication. Consumers increasingly look for and trust Recyclability is important and impact to environmental logos (e.g. recycling symbols or the FSC logo) climate change is attracting more interest. and want government and industry to act. Increasingly taken for granted, recyclability is a key association with environmentally sound products. Consumers are beginning to become annoyed if it’s not an option. Reducing climate impact is growing in appeal and is strongly associated with packaging. 5 Consumers are increasingly concerned about the environment

We asked consumers to what How much do you think the focus on environmental issues (e.g. climate change, extent they felt the focus on environmental pollution) will increase/decrease in the coming five years? environmental issues such as climate change and pollution would increase over the coming five years. Of consumers believe that the %* focus on environmental issues will A total of 86% of respondents 86 increase in the coming five years saw environmental issues growing in prominence either ‘a lot’ or ‘somewhat’, with the biggest rise (5 percentage points) in those Total % seeing a major increase. Today, consumers who think the focus 2019 46 40 10 3 1 on environment will not change in the future, or will decline, are 2017 41 43 13 2 1 in the minority.

Increase a lot Increase somewhat No change Decrease somewhat Decrease a lot

Consumers 2019 (n=7529); Consumers 2017 (n=6543) *Top 2 boxes (Increase a lot + Increase somewhat) 95% Significance towards 2017 Governments and companies are expected to take the lead

Who is responsible for solving Thinking about environmental issues, who should our environmental problems? take the lead in finding improvements or solutions? We wanted to know who consumers felt should take action to provide improvements and Total mentions – % Values solutions. THE GOVERNMENT 57 Consumers sent a clear message FOOD AND BEVERAGE COMPANIES 53 about who should lead the action in relation to environmental issues. PACKAGING COMPANIES 51 Governments, food and beverage CONSUMERS 36 companies and packaging companies came top, cited by THE LOCAL MUNICIPALITIES 18 57%, 53% and 51% of consumers RETAILERS 15 respectively. Only 36% of respondents felt it was up to them NGOs 11 to lead the initiative themselves, while municipalities, retailers Base: Consumers (n=7529) and NGOs elicited relatively few mentions. Environmental actions are changing how people buy

They may be concerned about the Below is a list of activities. Thinking about the past year, please indicate which of the following environment but does this translate actions you have actually done or considered doing, or have not considered doing into action when consumers are Environmental Activities – Frequently Done – % Values making purchasing choices? Our survey asked them which SORTED AND SET ASIDE WASTE FOR RECYCLING 50 52 environmental actions they had REDUCED THE AMOUNT OF FOOD/BEVERAGE 44 taken over the past year. WASTED BY ME/MY FAMILY 43 SORTING AND RECYCLING REMAIN Our research revealed a significant PURCHASED A PRODUCT WITH AN 26 TOP ACTIONS ENVIRONMENTALLY SOUND PACKAGING 23 increase in the percentage of CONSIDERED ENVIRONMENTAL ASPECTS 24 consumers who actively make WHEN PURCHASING THINGS 20 purchasing choices that are driven LOOKED FOR ENVIRONMENTAL 22 by environmental concerns. More INFORMATION LABELLING 17 PURCHASED AN ENVIRONMENTALLY SOUND 21 respondents are looking for PRODUCT, EVEN IF IT COSTS MORE 15 environmentally sound packaging GATHERED INFORMATION ABOUT 21 and products and more are looking ENVIRONMENTAL TOPICS, ISSUES OR CONCERNS 15 for environmental information. AVOIDED A BEVERAGE IN A PLASTIC CONTAINER 21 FOR ENVIRONMENTAL REASONS 16 Sorting and recycling remain the top 2019 2017 AVOIDED A PARTICULAR PRODUCT OR BRAND 20 actions that people take, followed by FOR ENVIRONMENTAL REASONS 18 reducing food and beverage waste. AVOIDED A BEVERAGE IN A MIXED MATERIAL CONTAINER FOR ENVIRONMENTAL REASONS 18 95% Significance towards 2017 AVOIDED A BEVERAGE IN A CARTON 16 Base: Consumers 2019 (n=7529); CONTAINER FOR ENVIRONMENTAL REASONS 11 Consumers 2017 (n=6543) Concern for future generations and communities are driving environmental purchase decisions

Seeking to understand what was Why do you buy/would you buy behind consumers’ environmental environmentally sound products? concerns and buying behaviour, we Drivers to purchase environmentally sound products – % Values asked which motivations inspired them to purchase environmentally TO PRESERVE THE ENVIRONMENT FOR FUTURE GENERATIONS 68 58 sound products. TO DO SOMETHING HELPFUL FOR THE COMMUNITY 50 The results show that consumers are 37 increasingly future-focused. Over the BECAUSE IT FITS WITH MY LIFESTYLE HABITS AND PREFERENCES 38 (E.G. HEALTHY, ORGANIC, LOCAL, NATURAL, FREE-FROM…) 35 past two years there has been a significant BECAUSE OF ADDITIONAL BENEFITS COMPARED TO 37 increase, to 68%, in the percentage STANDARD PRODUCTS (E.G. HEALTH BENEFITS) 34 of consumers who buy environmentally BECAUSE OF HIGHER QUALITY THAN 26 sound products because they want STANDARD PRODUCTS 23 to preserve the environment for future TO FEEL LESS GUILTY 23 generations. Concern for community has BECAUSE IT’S TRENDY 8 5 risen even faster, with 50% of consumers now citing this as a reason for their decisions, up 13 percentage points on 2019 2017

2017. We saw significant increases in 95% Significance towards 2017 environmental motivations across the Base: Consumers 2019 (n=7529); board, suggesting that overall awareness Consumers 2017 (n=6543) is rising. More consumers are willing to pay more – but the information gap is growing

What stops people buying Which of the following aspects would not make you buy/make you not environmentally sound products? buy an environmentally sound product? We asked consumers about the Barriers to purchase environmentally sound products – % Values barriers to action that got between them and their purchase decisions. HIGHER PRICE OF ENVIRONMENTALLY SOUND 42 PRODUCTS COMPARED TO STANDARD ONES 46 In 2019, we saw the percentage of LACK OF INFORMATION ON ENVIRONMENTALLY 38 SOUND PRODUCTS MORE CONSUMERS consumers who were deterred by the 29 OPEN TO PAY EXTRA LACK OF AWARENESS IN DISTINGUISHING WHAT IS 36 FOR ENVIRONMENTAL higher price of environmentally sound PRODUCTS OR IS NOT AN ENVIRONMENTALLY SOUND PRODUCT 28 products decrease significantly to LACK OF ENVIRONMENTALLY SOUND PRODUCTS 34 42%, suggesting that for well over half AVAILABLE TO PURCHASE 29 of people today, cost is not an issue. A LACK OF TRUST THAT THE PRODUCT HAS 33 On the other hand, information – LIMITED IMPACT ON ENVIRONMENT 26 LOWER QUALITY OF ENVIRONMENTALLY SOUND 28 or the lack of it – is a growing barrier. PRODUCTS COMPARED TO STANDARD ONES 22 We saw significant rises over two years LACK OF ADDITIONAL BENEFITS COMPARED TO 23 in the percentage of consumers who STANDARD PRODUCTS (E.G. HEALTH BENEFITS) 18 were put off by a lack of information LACK OF INTEREST ON ENVIRONMENTAL ISSUES 21 on products, an inability to distinguish 12 LACK OF FIT WITH MY LIFESTYLE HABITS & PREFERENCES 20 2019 2017 whether a product is environmentally (E.G. HEALTHY, ORGANIC, LOCAL, NATURAL, FREE FROM…) 13 sound and also by a lack of trust in 95% Significance towards 2017 a product’s environmental credentials. Base: Consumers 2019 (n=7529); Consumers 2017 (n=6543) There’s a thirst for knowledge – and social media is the medium of choice

Where do people like to get their information today and what are Social networks have risen sharply in popularity they interested in? We asked since 2017 to become the most favoured channel consumers about their media for information about food and beverage packaging, preferences and the topics they cited by 21% of consumers. At the same time, had seen or had been following on-pack information saw a decline from 26% to in relation to the environment. 20% – a noteworthy shift for businesses planning communication strategies.

As for environmental topics, our research uncovered fast-growing interest in reduced carbon and water footprints, renewability and responsible forestry, while recyclability and biodegradable materials remained the topics of greatest interest. When we asked about plant- based materials for the first time in this survey, it almost equalled recyclability as a topic that consumers wanted to learn more about. There’s a thirst for knowledge – and social media is the medium of choice (cont)

Through which of the following communication channels With reference to food and beverage packaging, would you prefer to get environmental information about which of the following topics have you recently seen, food/beverage packaging? read or followed something about?

Preferred channel to get Environmental info about packaging Topics to read/learn more about

USE OF BIO-DEGRADABLE SOCIAL NETWORKS 21 41 SOCIAL NETWORKS, 13 MATERIALS 42 ON-PACK AND TV/RADIO ARE ON FOOD OR 39 THE IDEAL 20 RECYCLABILITY BEVERAGE PACKAGING CHANNELS FOR 26 37 ENVIRONMENTAL USE OF PLANT-BASED MATERIALS 37 INFO TV/RADIO 19 20 REDUCED 37 CARBON FOOTPRINT 30 ONLINE NEWS/BLOGS 11 9 RENEWABILITY 37 31 AT SUPERMARKETS/IN STORES 10 11 USE OF RECYCLED 34 MATERIALS 34 NEWSPAPERS/MAGAZINES 6 8 REDUCED WATER FOOTPRINT 32 20 E-NEWSLETTERS/E-MAIL 6 6 RESPONSIBLE 30 FORESTRY 21 COMPANY WEBSITES 4 3 2019 2017

Base: Consumers 2019 (n=7529); Consumers 2017 (n=6543) 95% Significance towards 2017 Nearly all consumers look for environmental logos

We asked respondents whether When you shop for beverages, do you typically look they typically looked for for environmental logos on the products you buy? environmental logos on the beverage products they buy. Attention to environmental logos during shopping – % Values For a clear majority of consumers, environmental logos are important, 2019 54 37 9 with 91% of respondents looking for them. In the last six years we’ve Always & Often Sometimes Never seen a steady rise in the percentage of consumers who look for logos Always + Often – Data per year ‘always’ and ‘often’, with 54% doing so today. This presents an 54 37 39 42 opportunity for manufacturers who can demonstrate responsible sourcing and production. 2013 2015 2017 2019

95% Significance towards 2017

BASE: Consumers 2019 (n=7529); Consumers 2017 (n=6543); Consumers 2015 (n=6044);Consumers 2013 (n=7028) Almost 50% of people are now ‘concerned’ or ‘conscious’

As part of this research, we classified CONCERNED SEGMENT IS consumers into four segments OVER-INDEXED IN INDIA, CHINA, that describe their attitude towards MEXICO, BRAZIL AND ITALY environmental issues. ‘Concerned’ is now the second largest CONCERNED 29% DETACHED 16% segment, comprising of the consumers Strongly caring about Less interested who care most about environmental environment when buying 16 in environment when issues – and it has high representation products. The most 29 buying products than active segment across other groups. Do not in India, China, Brazil, Mexico and Italy. environmental activities perform simple activities, Together with ‘Conscious’, the next-most Segment share like recycling and reducing (%) environmentally aware group, this means amount of food/beverages 46% of consumers are now notably mindful 38 about environmental purchase decisions. 17 Although ‘Careless’ is the largest segment CONSCIOUS 17% CARELESS 38%

(38%), these consumers still have some Responsible when buying Not completely aware awareness of environmental issues and do products. Recognise the of environmental issues take actions, such as recycling. Only 16% advantage of environmentally nor of useful actions to pursue. sound products Frequently recycle and reduce of consumers are ‘Detached’, or lacking the amount of food waste interest in the environment and therefore not engaging in activities like recycling. Biodegradable and recyclable are front of mind

We asked consumers what first When you think about an environmentally sound product, comes to mind when they think which is the first thing that comes to your mind? about the definition of of environ- Definition of environmentally sound products – % Values mentally sound packaging products. BIODEGRADABLE PRODUCTS 19 Top of the list was biodegradable 14 products, awareness of which has PRODUCTS THAT CAN BE RECYCLED 19 risen 5 percentage points since 2017. 19 Recyclability was the next most-cited ORGANIC PRODUCTS 12 13 attribute, consistently front of mind ASSOCIATIONS WITH PRODUCTS MADE WITH RECYCLED MATERIALS 11 BIODEGRADABILITY ARE for 19% of consumers over the last 10 INCREASING, WHILE ASSOCIATIONS WITH two years. PRODUCTS MADE WITH MATERIAL 11 RECYCLABILITY ARE STABLE FROM RENEWABLE RESOURCES 9 PRODUCTS GROWN WITHOUT 9 PESTICIDES, PRESERVATIVES 13

PRODUCTS WITH NO/MINIMUM PACKAGING 7 6 GMO (GENETICALLY MODIFIED ORGANISMS) 6 FREE PRODUCT 7 2019 2017 PRODUCTS WITH LOW CARBON EMISSIONS 5 FOR PRODUCTION 4 95% Significance towards 2017 PRODUCTS WITH LOW CARBON 3 Base: Consumers 2019 (n=7529); EMISSIONS FOR TRANSPORT 3 Consumers 2017 (n=6543) Environmentally sound packaging makes brands more attractive

How does environmentally sound If you were about to choose a food/beverage brand, how would environmentally sound packaging affect your consideration of the brand? packaging affect brand consideration?

Since we asked this question in 2015, Innovation related we have seen a significant shift. to plant-based Impact of environment materials/renewability on Brand Consideration In 2019, 53% of consumers are much more likely to consider a brand whose 2019 2017 2015 packaging has good environmental …makes me much more likely credentials, up 10 percentage points to consider the brand on 2017 and a marked increase on the 43% 39% 53% 39% figure for 2015. And with 35% of ENVIRONMENTALLY SOUND PACKAGING… consumers a ‘little more likely’ to consider brands in environmentally sound packaging, this is now a positive …makes me a little more likely 38% to consider the brand 37% motivation for an overwhelming majority 35% of consumers. For manufacturers and producers, it illustrates how packaging 17% 21% can both complement their brands’ …makes no difference 10% 2% 3% 2% environmental credentials as well …puts me off considering the brand as drive sales.

Base Consumers 2019 (n=7529); Consumers 2017 (n=6543) 95% Significance towards 2017 ‘Premium-ness’ is strongly associated with packaging that has environmental features

We asked consumers whether Which of the following sentences better fits with your thoughts about an environmentally sound packaging? they thought products in an environmentally sound package A product in environmentally Impact of environment were worth more, the same or sound packaging is worth on Brand Value less than standard packages.

Notably, 43% of consumers think that In particular… Highest level a product in an environmentally sound of income 48% ...a higher price than package is worth more. In higher Living with a product in standard children packaging income groups this rises to 48%, <13 y.o. 47% 43% and to 47% in respondents with young Higher level of education 47% children or higher levels of education.

The message is that on its own, this ...the same price than type of package can convey a sense a product in standard packaging of ‘premium-ness’, raising the perceived 48% value of products without the need for additional features or messaging.

...a lower price than 9% a product in standard packaging

Base Consumers 2019 (n=7529); Consumers 2017 (n=6543) Plant-based materials, climate impact and responsible sourcing inspire consumer interest

Finally, we presented consumers SURVEY QUESTION ASKED: Now we are going to show you potential innovations to food and beverage CARTON packaging. Please select all those innovations that would be more relevant with potential food and beverage for you, and meet your needs the most. Think about innovations that you would want to be packaging innovations and asked applied to the food and beverage carton packages you consider purchasing in the future. which were the most relevant or met their needs the most. Top three package innovations cited by consumers Three areas stood out as most relevant. Innovations related to reducing climate impact and plant-based materials were the most frequently chosen, by 36% of respondents in each case. Innovations that related to certifications and labelling associated with responsible sourcing and production, were chosen by 29% of consumers. These results suggest that consumers are inspired % % % by products that can make a positive 36 29 36 Innovation related Innovation related to Innovation related environmental impact on a global scale to plant-based materials that are certified to reduced impact and that use responsibly sourced materials/renewability and labelled as responsibly on climate change sourced and produced renewable materials.

Base Consumers 2019 (n=7529) Turning insights into action –How our customers can benefit from this research

Here are five ways in which these findings can help support our customers’ business objectives:

Drive new business opportunities. Move upmarket. The research points to a strong opportunity for customers With environmental performance associated with ‘premium- to develop and sell more environmentally responsible ness’, customers can target lucrative consumer segments. products. It’s clear that consumers want them – and are prepared to pay more for them. Support the business case for sustainability. For customers struggling to get traction for sustainability Connect with customers. strategies and practices, this study proves that they make There’s a thirst for information about environmental good commercial sense and go way beyond ‘greenwash’, subjects. Customers have an opportunity to use social Corporate Social Responsibility and compliance. and on-pack messaging to build consumer relationships and reinforce their reputations. Build partnerships. This study is further proof that environmental performance depends on customers, local authorities and consumers all working together – and there’s mutual benefit for each party. Read more: www.tetrapak.com/sustainability/sustainable-offering