Brands making specific ESG claims about their products are driving more value than those who use vague or moderately accurate ones, according to research by McKinsey and NielsenIQ.
The study, of 6,000 product SKUs in the US over a four-year period ending in 2022, showed that products with “highly specific claims” like ‘carbon zero’ enjoyed 8.5% higher sales than those without environmental, ethical or social claims. Sales of FMCG products with so-called “medium-specific claims” like ‘sustainable packaging’ were 4.7% higher, while sales of those with unspecified claims like ‘environmentally sustainable’ were only 1.2% higher than those with no green claims.
“More specific claims are driving more value,” explained Felix Grünewald, a consultant with McKinsey in Switzerland, as he presented the research at the Packaging Innovations & Empack show in Birmingham this week.
The findings are significant given the intense scrutiny there is on green claims currently. Brands are being warned by regulators to evidence any claims, and produce context. NGOs are on the hunt for greenwashers.
Other findings from a 12,000-strong consumer survey by McKinsey and covering 11 countries, including the UK, included a willingness among 90% of people to pay 5% more for sustainable packaging. Such a premium effectively allows for “doubling” the price of packaging, Grünewald said.
The survey also showed hygiene and food safety as the most important aspect of packaging, followed by shelf life. Appearance however is nowhere near as important as it once was – in fact it was the least important aspect in every country polled. In the UK ease of use came third, followed by information on the label, environmental impact and durability.
Demand for sustainable packaging options will remain, said Grünewald, with consumers seeing brand owners and packaging producers as the parties most responsible for delivering them. Only a minority are asking for regulators and retailers to step in, he added.
