The emergence of Gen Z as a core consumer base means that the FMCG sector can’t afford to brush sustainability concerns under the carpet.
The societal impact of the Gen Z cohort emerging into the working population with firm beliefs about environment and sustainability will add pressure to retailers and FMCG companies to more fully understand the implications of environmental change for consumers, shoppers and categories.
Patrick Finlay, managing director of the Category Management Company, cites two studies – one by Barclaycard, suggesting 82% of Gen Z having concerns about sustainability, and another study by First Insight, highlighting that 75% of Gen Z places sustainability higher than brand name, at 49%, as a factor important to purchase decisions – as reasons for the sector to take note.
“Frugalpac’s paper bottle innovation, some of Aldi’s wine selection, and Greenall’s gin are all good recent examples that green policy and strategy, for some, has not been consigned to the ‘too hard or too expensive box’,” Finlay commented, “and others, such as Asda, who recently abandoned its refill-and-reuse trial [pictured] have at least taken a punt – lessons learned and returned to the drawing board – but the full realisation of any meaningful sustainability strategy will likely be a slow burn.
“For most of the major retailers, the ambition to get to net zero for internal operations is by 2035. Set this against the Gen Z beliefs, and you have to ask, as we enter our next three- to five-year planning cycle, whether another five-flavour range extension is really going to cut it!”
Walking The Walk
The learning is simple, Finlay says: there are just some things that cannot be brushed under the carpet by continuing to do what we have always done.
“One of these is fully understanding the implications of environmental change for consumers, shoppers and categories. Whilst I’m not suggesting it’s being ignored, many years spent developing category visions and strategies has taught me that, to paraphrase the UK’s new Prime Minister, talking the talk is a lot easier than walking the walk.
“Creating change requires not only a strategic vision, but also the intent to act upon it – for, let’s face it, we will be judged by our actions, and not our good intentions.”
Create Sustainable Value
This, Finlay says, is perhaps more pronounced in these uncertain times, when it is those who are bold and have the courage of their convictions to invest in the long term, who will be remembered for creating sustainable value for everyone.
“The emerging generations of paying consumers and shoppers will not be forgiving. They will make active choices based on their belief systems and, what’s more, will not be willing to pay any more for it.
“For our industry, we need retailers and their suppliers to lead and innovate because we’re still in a phase of experimentation, just like Asda’s refill-and-reuse trial. Where we plan, we execute, we learn and refine. Being relevant is everything, adapting to trends and activating against them with a willingness to admit defeat or celebrate success when we get it right.”
Long-Term Strategy
This kind of change, Finlay argues, does not happen by chance or good fortune.
“It is realised by discipline in developing long-term strategies – category visions, for example, where suppliers and retailers have a responsibility to set and elevate category direction and ultimately value, providing shoppers and consumers more reasons to shop and consume, including hard-won environmental strategies.
“Without this pioneering and visionary spirit, we would still be living in the Dark Ages.”
