Sustainability Claims Affect Price Sensitivity & Demand

A European study looks at consumers’ willingness to buy products with sustainable packaging — and what they’ll pay.

Kate Bertrand Connolly, Freelance Writer

July 10, 2024

2 Min Read
Eating from a Yogurt cup.
Traimak_Ivan/iStock/Getty Images

At a Glance

  • An auction-based research method simulated actual buying behavior.
  • Consumers considered sustainability claims related to the product, its packaging, and its social impact.
  • Two out of three sustainable packaging claims drove up demand.

New market research from behavioral research company Veylinx and McKinsey & Co. explores consumers’ willingness to buy products with sustainability features as well as how much consumers are willing to pay for those attributes.

The researchers found that product-related and social claims drove higher demand across various price points; however, packaging-related claims delivered mixed results. McKinsey released a report on the research in April 2024.

Amsterdam-based Veylinx and McKinsey’s German offices conducted the research jointly, in Germany, using an auction-based method to predict consumer behavior. Testing centered on three product categories: shampoo, yogurt, and T-shirts.

For each of these products, the researchers created five marketing mockups that made various sustainability claims. The claims were based on the product itself, its packaging, and/or the social impact of production.

The packaging-related claims were for sustainable yogurt packaging, a refillable shampoo bottle, and a shampoo bottle made of recycled plastics. The mockups included reference products with no environmental or social claims.

To participate in the auction, participants submitted bids for the various products, indicating both willingness to buy and willingness to pay.

Related:IoPP Launches Sustainable Packaging Training

Of the packaging claims tested, the sustainable yogurt packaging and refillable shampoo bottle generated higher demand than products lacking environmental or social claims.

In fact, the refillable plastic bottle claim boosted demand by as much as 5 percentage points vs. the reference product. The effect is particularly noticeable at lower prices.

Demand for the recycled plastic shampoo bottle, in contrast, was 0.5 percentage points lower than demand for shampoo in a conventional bottle. The negative effect was seen across prices ranging from €0.99 to €3.49 (roughly $1.08 to $3.79), though the gap narrowed at higher price points.

“On average, packaging-related claims created a lower demand uplift than product-related claims,” the McKinsey report states.

In the yogurt test case, the claim “Sold in sustainable packaging” increased demand by 0.9 percentage points vs. the reference product.

The relationship between increased demand and higher margins for the brand owner is case-dependent and hinges on the added cost for the sustainability feature — a refillable bottle, for example. Even if consumers are willing to pay more for a sustainable package, their openhandedness may not outweigh the extra cost, the researchers point out.

About the Author(s)

Kate Bertrand Connolly

Freelance Writer

Kate Bertrand Connolly has been covering innovations, trends, and technologies in packaging, branding, and business since 1981.

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