The societal impact of Gen Z entering the workforce with strong beliefs about the environment and sustainability will increase pressure on retailers and fast moving consumer goods (FMCG) companies to better understand the implications of environmental change for consumers, shoppers, and product categories.
Patrick Finlay, managing director of The Category Management Company, cites two studies to emphasise this point. One, by Barclaycard, found that 82% of Gen Z are concerned about sustainability. Another, by First Insight, revealed that 75% of Gen Z place sustainability higher than brand name (49%) as a factor important to purchase decisions. These trends, Finlay argues, should prompt 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,’” says Finlay. “And others, such as Asda, which recently abandoned its refill and reuse trial have at least taken a punt; lessons learned and returned to the drawing board.”
Playing the long game
However, Finlay believes that achieving meaningful sustainability will likely take time. Most major retailers aim to reach net zero in their internal operations by 2035, but with Gen Z’s beliefs in mind, he questions whether another flavour extension will suffice in upcoming planning cycles.
The key takeaway, Finlay suggests, is that some issues cannot be ignored by sticking to the status quo, “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.”
Read more: Six in ten Gen Zs and millennials ‘worried’ about climate change in the past month
Creating sustainable value
In uncertain times, Finlay believes that those bold enough to invest in the long term will be remembered for creating sustainable value.
“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 the industry, retailers and suppliers need to lead and innovate, Finlay says, as the current phase is still experimental. “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.”
This kind of change, Finlay argues, doesn’t happen by chance. “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. For without this pioneering and visionary spirit, we would still be living in the dark ages.”
The Category Management Company helps firms assess, refresh, and develop sustainable business visions and growth plans that are future-proof, relevant, and ready for growth.
