The Independent’s Playbook: The ABCs of ESG

May 27, 2022

Jim Dudlicek, Director, Communications and External Affairs

Attracting younger consumers is an opportunity that retailers continue to pursue, aiming to appeal to their desire to do business with companies that are about more than just business.

One aspect of this mission appears to transcend age and is emerging as table stakes for any business claiming to be a good member of the community: environmental responsibility.

More than one-third (34%) of U.S. households are “eco-driven,” meaning that they purchase and use products that have been sustainably manufactured, that they are conscious of the products they purchase and use, and that they want to make the Earth a cleaner and better place.

That’s according to market research company Numerator, whose recent Winning the Eco-Driven Consumer report identifies who eco-driven consumers are, and which brands and retailers are currently winning their loyalty.

According to the report, eco-driven consumers skew younger but older as well; 19% are age 18 to 34 but 21% are 65-plus. In all, 44 million eco-driven households hold spending power of $1.3 trillion, and independent community grocers are well positioned to pursue their share. Consumers, many who trend green, increasingly look to independent grocers as a trusted source for food, much of it locally grown or procured by folks with ties to the community and an authentic brand story.

To be sure, 69% of eco-driven shoppers and 47% of mainstream shoppers say they would be more likely to purchase products from a company making eco-friendly strides, Numerator reports. And of these folks, 39% of eco-driven and 37% of mainstream shoppers believe that reducing product waste is the most important eco-friendly initiative.

This is further backed up by McKinsey’s recent State of Grocery in America report, in which surveyed grocery CEOs said they expect shoppers to have a keener interest in sustainability and factor eco-friendly options into their purchasing decisions.

McKinsey noted that company interest has boomed recently in environmental, social and governance (ESG) initiatives. And while grocers have yet to fully realize how to monetize their sustainability endeavors, the report noted, they have opportunities to direct eco-friendly efforts toward greater efficiency, better margins and growth.

This report identified five main areas grocers can focus on in their sustainability efforts: health, the environment, the economy, animal welfare and livelihoods, which includes human rights and fair pay.

Meanwhile, back to the Numerator study: What kinds of things are eco-driven consumers buying? According to Numerator’s report, 56% purchase fish, 28% buy pea/bean/vegetable snacks, 26% buy herbal supplements and 23% purchase kombucha. Also, eco-driven consumers are 110% more likely to buy fresh meat alternatives, 80% more likely to buy frozen meat alternatives, and 43% more likely to buy chicken sausage than the average consumer.

Additionally, eco-driven consumers are 19% less likely to buy cooking bags; 14% less likely to buy meal combos for kids, or straws, stirrers and picks; and 13% less likely to buy foam containers than the average consumer.

These are all important factors to consider when pursuing the grocery dollars of the eco-driven consumer. Also useful to keep in mind: According to Numerator, eco-driven consumers prefer health-focused retailers, over-indexing at places like Whole Foods, Trader Joe’s and Sprouts compared to mainstream consumers. It’s time for independent grocers to demonstrate they can do it better.