‘Green’ market almost doubles to $21.5 billion, but consumers still wary
Posted by The GP Team 10 months agoRising living costs does little to discourage conscious consumers. The market for sustainable products and services has almost doubled in just four years despite rising living costs and signs of a declining appetite from the Australian community for a price on carbon, new research shows.
Data gathered for Mobium’s fourth annual Living LOHAS (Lifestyles of Health and Sustainability) trends report shows that consumer spending on healthier, more sustainable products and services continues to surge, from $12 billion in 2007 to $21.5 billion in 2010. The report estimates the Australian market for sustainable goods and services will reach $27 billion by the end of 2012.
And cost of living pressures brought about by higher energy costs, rising inflation and interest rate speculation hasn’t discouraged environmentally conscious consumers from spending more on sustainable products and services.
According to Nick Bez, Research Director at Mobium Group, a Melbourne-based research consultancy specialising in the consumer market for sustainable products, more Australians are continuing to embrace ‘eco’ options.
“Our research shows growth is coming from many categories within the household – both consumable and durable – and is being accelerated by increasing availability of product options in everyday channels,” Mr Bez said.
“This is being helped by the price premiums consumers have been accustomed to paying for ‘green’ alternatives reducing, meaning that in many categories, price is no longer the barrier it once was to consumers opting for sustainable products and services.”
However, Mobium’s data shows that scepticism about green ‘claims’ made by manufacturers remains a serious constraint to further purchase for more than 60% of adult Australians.
“Consumers are questioning – and looking for surety about – the bone fides of the sustainability credentials of products when making decisions in store,” Mr Bez said. Most don’t know how to verify information they are given and claims made, for example those made on labelling in promotional material.
“Having surveyed over 30,000 shoppers over the past few years, the underlying cynicism that exists in the community has not abated and the key message to marketers from consumers is that the onus is on them to ‘prove it’.”
However, the Mobium tracking data shows that less than one third of Australian shoppers are aware of the existence of independent standards to assess various social and environmental claims.
“There are over 50 ethical, social, environmental and industry trust mark programs for various consumer product categories in Australia. Some consumers feel overwhelmed and struggle to make sense of this proliferation but the reality is that the majority don’t recognise them and mostly don’t know what they actually mean,” Mr Bez said.
Of more than 30 trust marks tracked by Mobium since 2007, prompted consumer recognition is growing, but for most remains less than 25% of the general adult population. Exceptions to this are Government mandated programs (Energy and Water star labels) and some long standing NGO labels, such as Planet Ark and WWF.
While still in its infancy, Nick Bez points out that independent verification and authentication through certification is a valuable tool that has not yet come of age with consumers. He believes that the eco label owners must invest in mainstream promotion to drive both awareness and recognition of trust marks, and understanding of what certification actually delivers.
He believes that licensee co-marketing is crucial and points to strong year on year growth in awareness for some labels including Fairtrade, Rainforest Alliance and Australian Certified Organic who have gained benefit from mass marketing efforts undertaken by brands using their marks, as well as mainstream media coverage.
“Besides the potential to provide a consumer benefit and point of difference, it is the demands of customers that may accelerate the uptake of certification schemes,” Mr Bez said.
“Major overseas retailers like Walmart, Tesco and Aldi are driving sustainability agenda’s with their supplier bases, in something of a preview as to what is likely to be experienced in the local market. Some sectors, such as the building industry and individual large corporate buyers in Australia, are already looking for certification schemes as important mechanisms in demonstrating compliance with sustainability requirements.”
About the Living LOHAS 4 study
Sample size: 2,145 survey participants aged 18-69 from all Australian states (metropolitan and regional) interviewed in December, 2010.
About Mobium Group
Mobium Group (www.mobium.com.au) is a market research and strategy consultancy with a specific focus and expertise in understanding what motivates Australians to make healthier, more sustainable lifestyle choices. The firm assists organisations to make informed decisions about market opportunities related to sustainability, health and wellbeing. Since 2007, the firm has surveyed more than 30,000 Australians to understand their values, attitudes and actions with respect to health and sustainability. This work culminates each year in the annual Living LOHAS consumer report. Mobium Group’s consultants have worked with over 70 Australian and international brands on customised consumer and market research, market entry and business analysis projects, working closely with both category leaders and new entrants in the Australasian market.
