Circana Reports on Sustainable Products’ Upward Trend

by | Jun 20, 2023

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Sustainable products

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In a recent report from Circana, sustainability is on an upward trend with more consumers demonstrating their willingness to spend more on sustainable products. The report from Circana, formerly known as IRI and The NPD Group, stated that 40% of consumers are aware of how environmental issues now impact their choice of where to shop. This surpasses social issues for the first time, indicating a growing trend towards sustainable products.

Marshal Cohen, the chief retail industry advisor for Circana, said that products that focus on reducing energy consumption, minimizing waste, and utilizing recycled materials or natural ingredients are gaining attention from consumers and driving growth in the retail sector. Despite concerns about rising prices, consumers are proving their willingness to spend on products that align with their values.

Customers More Willing to Buy Sustainable Products

One interesting finding is that while some consumers claim they are not willing to pay more for sustainable products, certain discretionary general merchandise categories have shown that sustainable options outperform alternatives, even with a higher price per unit. For instance, unit sales of footwear made with recycled materials have grown more than six-fold over the past three years, while sales of non-recycled options have declined. 

Similarly, sales of recycled office supplies have increased by 14% compared to three years ago, while non-recycled offerings have experienced a 16% decline. In the prestige beauty sector, overall growth is evident, but unit sales of refillable options have more than doubled in the last three years, outpacing the market growth by 25%.

The impact of sustainability is not limited to general merchandise but extends to the consumer packaged goods (CPG) industry as well. Circana’s research, conducted in partnership with the New York University Stern Center for Sustainable Business, reveals that sustainability-marketed products hold a 17.3% share among 36 CPG categories. 

This represents a 30% growth from the previous year. The most prevalent sustainability claim found on food and beverage products is “recyclable,” and revenue from products highlighting recyclable packaging has increased by 12% compared to last year and 30% over the past three years. The sales of vegan cookbooks have also seen a steady rise over the last four years, indicating a consumer desire to incorporate more sustainable, plant-based foods and beverages into their diets. Increased spending is observed in categories like oat milk and frozen meat substitutes.

Cohen said that the continuous growth in sustainable product sales underscores the importance of introducing newness and innovation to the market. Despite economic and political distractions, consumers remain focused on sustainability and are willing to pay a premium for products that align with their values. 

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