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Kiwis Say It Is Easier To Make Sustainable Purchases With Cars Than With Food

Kiwis find it easier to make sustainable choices when purchasing a car than when purchasing packaged food or groceries in New Zealand, according to a report released today by Boston Consulting Group's New Zealand office.

The report – titled Finding Competitive Advantage in Adversity – analyses the results of BCG's half-yearly New Zealand consumer sentiments survey and plots thirteen day-to-day categories of goods and services by relative sustainability maturity, along a curve from 'less evolved' to 'more evolved'.

Phillip Benedetti, lead author of the report and head of BCG New Zealand, says that a category's stage of maturity depends on a number of factors.

"For each category of product or service, we asked Kiwi consumers about their level of sustainability awareness, concern, adoption, action and willingness to pay a premium, and then weighted them against each other."

He says this requires going beyond the carbon footprint of a category, and looking at how well their product or service offering can catalyse sustainable behaviour.

Homecare ranked at the top as the most evolved, while luxury goods rank thirteenth. And while cars may sit above groceries, banking, insurance and packed foods, they are all outpaced by beverages, electricity and skincare, according to the report.

On average across all thirteen categories, 79% of consumers said they were highly aware of the sustainability activities of each category. Most categories scored between 74% and 88% for awareness, with banking and insurance the outlier at only 65% awareness.

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"Customers are increasingly more aware of and concerned about sustainability. This is reflected in the high average score for awareness and concern across the board. But if we look at the results in more detail, it's evident that some categories are doing much better than others in converting concern to action, including purchasing decisions."

On average, 35% of consumers said they were able to adopt sustainable behaviours, but if we break that down by category, we see that some, such as clothes at 50% consumer adoption, rank much higher, while luxury products came in much lower at 18%, Mr Benedetti says.

"Categories that are more sustainably evolved are ones where customers reported that they are highly informed about sustainability, concerned about the impact of their own habits within the category and, most importantly, are also able to integrate purchase behaviour to respond to those concerns."

Five traits of sustainably mature product and service categories

  1. Price segmentation

"We are likely to see cars move further up the evolution scale, as electric and fuel-efficient cars - once considered a premium version of an everyday purchase - start entering the secondhand market," says Mr Benedetti.

"Previously, a person may have wanted to be a more sustainably responsible motorist, but an electric car was out of their price range. If swapping their car for a bicycle or public transport wasn't a realistic option, then they were likely stuck with a traditional car."

"However, with a growing secondhand market and the corresponding increase in both availability and affordability, the option to purchase a more sustainable motor vehicle becomes more possible."

  1. Supply chain

While consumers may only interact with the external face of a business or industry, the supply chain for that category plays an important role in its sustainable action maturity.

"Electricity ranks reasonably highly on the curve and this is owing, in large part, to the sustainability and simplicity of its supply chain."

"In New Zealand, 86% of our electricity comes from renewable sources and there are few substitutes, making it easier for customers to make sustainable purchasing decisions - particularly as the sustainability elements are already baked into the service through its supply chain."

  1. Choice

Homecare and skincare are both highly competitive categories with ample choice for the consumer, says Mr Benedetti.

"This is owing to a number of factors such as investment in R&D by global players, economies of scale, highly penetrative product sustainability information and education, substitutes available within the product category.

"The result, however is that customers feel, when they enter the homecare or skincare sections of a store, there is adequate choice of product on the shelves so that they can make purchase choices that correspond to their sustainability concerns, compared with some of the other categories."

  1. Taste

The challenge for the food sector in general will be to produce food that is both sustainable and which continues to meet customers' expectations of taste. This will particularly be the case in areas such as alternative proteins.

"It is interesting to note the gap between beverages - both alcoholic and non-alcoholic - and other food categories on the curve. The higher relative maturity of the beverage categories may point to customers feeling as though they have relatively less to give up in the way of taste when making sustainable choices when choosing what to drink."

  1. Context

"External factors also count towards the maturity of a category. If we go back to cars, the wider context – such as the increasing availability of charging infrastructure, regulation discouraging or restricting traditional fuel-dependent vehicles all play into the ability for a purchase category to evolve.”

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