Khor Reports: An interesting ranking of CSR topics of "extreme concerns" in this Nielsen retail survey, where clean water and sanitation come up tops, and environment and biodiversity come #3 and #11 and "increasing the focus of sourcing products we consume sustainably" comes in #12 and benefiting local communities #20. The top ranking CSR topics are mostly traditional development concerns including child mortality, maternal health, disease, and disaster relief. Various commodities are shifting toward sustainable supply-chains, so it's interesting to see the ranking of their core targets relative to other concerns.
What's also interesting is Nielsen's recommendation to use KPIs and quantify program outcomes. There is seems to be a rising dissatisfaction from both growers and buyers that sustainability programs are of uncertain macro benefit. Many industry specialists think that commodity sustainability programs are part of the non-tariff barrier trend and used for commercial advantage[1] by various industry players. One buy-side industry sustainability expert I spoke to very recently said this: "imagine if we took all that money spent on (palm oil sustainability) certification, supply-chain mapping and so forth and just spent it on the ground (on traditional CSR programs)...."
[1] Note Nielsen's research finding of "average annual sales increase of 2 percent for products with sustainability claims on the packaging and a rise of 5 percent for products that promoted sustainability actions through marketing programs. A review of 14 other brands without sustainability claims or marketing shows a sales rise of only 1 percent.."
Consumers Believe They're Eager to Pay More for Do-Gooder Products By Venessa Wong June 20, 2014; http://www.businessweek.com/articles/2014-06-20/consumers-believe-theyre-eager-to-pay-more-for-do-gooder-products
Even the most earnest social-responsibility efforts are often tied deeply to corporate marketing goals, a long-standing link that appears to be growing stronger. Research by Nielsen (NLSN) has found that consumers are attracted to such initiatives and are even willing to pay additional money to satisfy do-gooder instincts. For companies, it seems that doing good is an increasingly viable sales strategy.
In Nielsen’s online survey of 30,000 consumers in 60 countries, 55 percent of respondents said they would pay more for products and services from companies committed to positive social and environmental impact. The age group most likely to say they’d pay a premium: millennials.... “Precision marketing and knowing your consumers intimately will yield the greatest results,” wrote Amy Fenton, Nielsen’s global leader of public development and sustainability.... Labels are a marketer’s best friend, as food companies discovered when consumers said they would pay a premium for claims such as “locally sourced” and “certified organic.” ...consumers’ top concern: The world’s premium-paying consumers cared most about access to clean water, Nielsen found, followed by access to sanitation and environmental sustainability.....
The Nielsen research found, in a retail analysis, that sales of products marketed as socially responsible grew more quickly than those of comparable products: “The results from a March 2014 year-over-year analysis show an average annual sales increase of 2 percent for products with sustainability claims on the packaging and a rise of 5 percent for products that promoted sustainability actions through marketing programs. A review of 14 other brands without sustainability claims or marketing shows a sales rise of only 1 percent.”
To capitalize on sustainability initiatives, Nielsen offers companies this road map:
1. Vision: Be clear, practical, and global.
2. Endorsement: Get adoption and action from senior leadership.
3. Strategy: Focus on outward messaging and consistent cause messaging.
4. Accountability: Use key performance indicators, internally and externally.
5. Measurement: Quantify program outcomes and return on investment consistently across markets.
What's also interesting is Nielsen's recommendation to use KPIs and quantify program outcomes. There is seems to be a rising dissatisfaction from both growers and buyers that sustainability programs are of uncertain macro benefit. Many industry specialists think that commodity sustainability programs are part of the non-tariff barrier trend and used for commercial advantage[1] by various industry players. One buy-side industry sustainability expert I spoke to very recently said this: "imagine if we took all that money spent on (palm oil sustainability) certification, supply-chain mapping and so forth and just spent it on the ground (on traditional CSR programs)...."
[1] Note Nielsen's research finding of "average annual sales increase of 2 percent for products with sustainability claims on the packaging and a rise of 5 percent for products that promoted sustainability actions through marketing programs. A review of 14 other brands without sustainability claims or marketing shows a sales rise of only 1 percent.."
Consumers Believe They're Eager to Pay More for Do-Gooder Products By Venessa Wong June 20, 2014; http://www.businessweek.com/articles/2014-06-20/consumers-believe-theyre-eager-to-pay-more-for-do-gooder-products
Even the most earnest social-responsibility efforts are often tied deeply to corporate marketing goals, a long-standing link that appears to be growing stronger. Research by Nielsen (NLSN) has found that consumers are attracted to such initiatives and are even willing to pay additional money to satisfy do-gooder instincts. For companies, it seems that doing good is an increasingly viable sales strategy.
In Nielsen’s online survey of 30,000 consumers in 60 countries, 55 percent of respondents said they would pay more for products and services from companies committed to positive social and environmental impact. The age group most likely to say they’d pay a premium: millennials.... “Precision marketing and knowing your consumers intimately will yield the greatest results,” wrote Amy Fenton, Nielsen’s global leader of public development and sustainability.... Labels are a marketer’s best friend, as food companies discovered when consumers said they would pay a premium for claims such as “locally sourced” and “certified organic.” ...consumers’ top concern: The world’s premium-paying consumers cared most about access to clean water, Nielsen found, followed by access to sanitation and environmental sustainability.....
The Nielsen research found, in a retail analysis, that sales of products marketed as socially responsible grew more quickly than those of comparable products: “The results from a March 2014 year-over-year analysis show an average annual sales increase of 2 percent for products with sustainability claims on the packaging and a rise of 5 percent for products that promoted sustainability actions through marketing programs. A review of 14 other brands without sustainability claims or marketing shows a sales rise of only 1 percent.”
To capitalize on sustainability initiatives, Nielsen offers companies this road map:
1. Vision: Be clear, practical, and global.
2. Endorsement: Get adoption and action from senior leadership.
3. Strategy: Focus on outward messaging and consistent cause messaging.
4. Accountability: Use key performance indicators, internally and externally.
5. Measurement: Quantify program outcomes and return on investment consistently across markets.