Millennials Willing to Pay More for Sustainability


"Given our general lack of incentive to diversify, Ireland's farmers are missing out on a growing market," explains Tom Jordan:

Millennials Willing to Pay More for Sustainability

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  • 3 years ago

"Given our general lack of incentive to diversify, Ireland's farmers are missing out on a growing market," explains Tom Jordan:

So-called millennials, or people born since the 1980s, have higher expectations than older age-groups, and are willing to pay more for goods and services which they perceive to be ethical and sustainable. This is the belief of food giant Nestle and a growing number of industry analysts. It echoes the findings of a report last year by the market research firm Nielson, which indicated that sustainability and ethical purchasing were high on the agenda for younger shoppers. It's good news for niche producers, but given our general lack of incentive to diversify, yet more evidence that Ireland's farmers are missing out on a growing market.

The Nielsen report stated: “Among the 66% of global respondents willing to pay more, over 50% of them are influenced by key sustainability factors, such as a product being made from fresh, natural and/or organic ingredients (69%), a company being environmentally friendly (58%), and company being known for its commitment to social value (56%). Sales, and coupons didn’t even make the top five. For this group, personal values are more important than personal benefits, such as cost or convenience.”

Attending the Energy for Tomorrow conference, Nestle Chairman Peter Brabeck-Letmathe told CNBC: "I think that if you're looking at the success stories in the food industry lately you will see that those successes are normally in products which have a relatively high price and it's basically [...] coming from the new generation. So I would say from this respect there is a change.”

He added: “Twenty years ago, where the only argument was price, this has moved a little bit. […] Retailers are still fighting only on price, that's why we have this deflationary environment. If you see the confrontation we still have—whether that's in the U.K. or whether it's here in France—it's all about one single thing: price. So retailers are living 20 years in the past but the modern consumers are really much more willing to recognize quality, sustainability, and traceability."

Energy for Tomorrow took place in Paris last week. It is an annual event at which international power brokers discuss strategies for future planning in light of climate change and growing demand for greener energies and technologies. One of the headlines from this year's event was Renault's announcement of its plans to launch an affordable ($8,000) electric car for the Chinese market. In addition, Unilever's chief executive Paul Polman called on the private sector lead by creating a fund to tackle climate change.

Ireland's farming community has been under fire for its high carbon output and low prioritisation of sustainable models like High Nature Value Farming and Organic. Clearly, to judge by the results of a survey conducted in this paper on hedge-cutting extensions, the majority of farmers do not realise the damage current practises are causing. The Environmental Pillar group recently blasted Irish agriculture as being “neither climate-smart nor sustainable.” Similarly, in Britain this year's State of Nature report blamed agricultural intensification for massive wildlife losses of 54% across all species since 1970, a decline that is continuing unabated. In light of the fact that younger people place importance on these issues and vote with their purchasing power, there is an opportunity for the Irish farming community to begin addressing them.

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