From vineyards to breweries, the alcohol sector is embracing sustainable practices to reduce environmental impact and meet the growing consumer demand for ethical and eco-friendly products. As a product that relies on discretionary income, sustainability is a strategic necessity for companies that don’t want to be left behind.
To better understand consumer needs and perceptions relating to sustainability, we surveyed more than 500 representative adults in the USA. The full set of results can be downloaded in our detailed report, Sustainability: The 2024 Shopper Insights Report. Let’s consider some key facts.
- 54% of people are willing to pay more for a product made by a company they trust
- 28% of people would pay extra for a product that is consistent with the image they want to convey
- 24% of people look to buy from companies that support social justice issues
When it comes to alcoholic beverages specifically,
- 30% of people say alcohol made with natural ingredients is important to them
- 26% say recyclable packaging is important
- 18% say environmentally sustainable sourcing is important
Sustainability isn’t just a nice idea. It’s a consumer need that manufacturers need to reflect throughout their business processes and a need that some shoppers are ready to pay for.
Sustainable processes from grain to claims
The processes behind manufacturing alcoholic beverages are complex, and most consumers don’t fully understand them. But, consumers know what drives them on their path to purchase. For example, 30% of people say that natural ingredients are important, 20% want to support farmers, 18% say environmentally sustainable sourcing is important, and 14% say conserving water is important.
Bacardi, the maker of Grey Goose vodka and Patrón Tequila, has developed extensive manufacturing processes that precisely reflect those consumer desires. In partnership with a variety of organizations like Bonsucro and Proterra, they are ensuring their products protect the environment and create safe working conditions for farmers.
Similarly, Pernod Ricard, the maker of Malibu and Absolut, is proud to showcase their environmental, social, and governance actions through a range of certifications. For example, they’ve received an MSCI ESG Rating of AA and an EcoVadis Gold medal in recognition of their sustainability achievements. Even though only 7% of people say they’re interested in third-party certifications and fewer than 20% of consumers have knowledge of most third-party certifications, Pernod Ricard values those certifications as a clear indicator of how important sustainability is to them.
Sustainable packaging through circular strategies
Alcohol manufacturers have almost unlimited opportunities to create more innovative and sustainable packaging. Lighter glass and cardboard bottles are visible to consumers, and they lower the financial and ecological consequences of transportation.
Alternative packaging solutions like these are key for consumers of alcoholic beverages as 31% of people say packaging made of glass is important and 16% say reusable packaging is important. Reduce, reuse, and recycle are top-of-mind features that consumers notice, understand, and lead to sales.
Diageo, the maker of Johnnie Walker and Tanqueray, is actively striving to reduce their environmental impact via their packaging. As part of their published plan, they are aiming to reduce their total packaging weight by 10%, increase the recycled content of their packaging to 60%, and make 100% of their packaging widely recyclable.
Similarly, Brown Forman, the manufacturers of Jack Daniel’s and Old Forester, has made commitments to achieve zero waste via circular processes and reuse discarded products and materials in secondary processes. They are also aiming for 100% of their primary packaging to be recyclable or reusable by 2030.
Sustainability creates value
Traditionally, premium pricing arose from products having unique physical features and qualities. Today, premium pricing is driven by personal values like social justice and sustainability. As such, shoppers are willing to pay slight premiums for alcoholic products made with natural (22%) or organic (16%) ingredients. That willingness to pay for natural ingredients increases to 30% for younger people aged 18 to 38 who could be at the beginning of their relationship journey with these brands. Further, some people are willing to pay a slight premium for products that are ethically sourced (15%), conserve water (13%), or use environmentally sustainable sourcing (11%).
Because packaging choices are the most visible sustainability option for consumers, some shoppers are willing to pay a slight premium for alcoholic beverages that use recyclable packaging (15%), reusable packaging (14%), or minimal packaging (11%).
Summary
Sustainability is a win for companies, consumers, and the environment. In the alcohol category, it enhances brand reputation, fosters customer loyalty, and ensures long-term viability amid environmental challenges.
If you would like to better understand how your shoppers navigate sustainability on their path to purchase, ask the shopper insights experts at Explorer Research. We have the deep knowledge and tools to help you understand your shoppers, and ultimately build a stronger path to purchase. Get in touch with us to explore your opportunities further.
To learn more about consumer perceptions of sustainability, please download the full set of results, Sustainability: The 2024 Shopper Insights Report.
Note: In March 2024, 520 adults across the USA completed a 10-minute self-administered questionnaire. As with all non-probability samples using access panels, margin of error cannot be calculated and the results are subject to both sampling and non-sampling error.
