Consumers will pay for more sustainably produced ingredients despite COVID impact, study finds

Most consumers will pay more for food and beverage products containing sustainably produced ingredients, research by Palsgaard has shown.

The COVID-19 pandemic has increased the importance consumers place on price, but has not detracted from their focus on environment issues, according to a research by Palsgaard.

The research revealed that 75% of respondents believed food companies have a lot of responsibility for protecting the environment, with 23% believing they have a little. More than nine in 10 said it was important that the ingredients in the products they buy are produced sustainably, with 49% indicating it was very important.

82% of the respondents said they would be willing to pay more for a food product containing sustainably produced ingredients. 46% of the respondents indicated they are willing to pay over 5% more, and 17% stated they would pay over 10% more. Environmental issues were found to be of particular concern to younger consumers. For 18-24 years old, climate change was the ethical issue food companies should take most seriously.

Sustainability is a key concern for Palsgaard, as Jakob Thøisen, CEO of Palsgaard, elaborated: “We always believed that carbon neutrality was the right path to take from an ethical point of view. As this research shows, it also makes sound business sense. Consumers, especially younger ones, are increasingly focused on reducing their carbon footprints and will reward food manufacturers who share that commitment.”

The research also provided new insights into the effects of COVID-19 on food purchasing decisions. Over half of consumers said the price of products had become a more important factor since the pandemic, while 42% said it had made no change, and only 3% said it had become less important.

However, this does not appear to have detracted from the focus on sustainability. In fact, 41% of respondents said environmental concerns had become more important since the pandemic, with 55% saying there had been no change, and only 4% indicating they had become less important.

“It would be understandable if the economic hardship caused by COVID-19 had pushed sustainability down the agenda. This is perhaps because great change causes people to reflect and focus on the things that matter most,” Thøisen added. “Whatever the reason, the food industry cannot afford to underestimate the important of environmental issues to consumers.”

Palsgaard also asked consumers how they thought their purchasing behaviours would change post-pandemic. 40% expected their households to buy groceries online more often, compared to 12% who said they would do so less often. 47% said they expected to eat out less often. The same number said they expected to spend more on products for home cooking and baking. Millennial consumers were the most likely to expect to increase their spending on home cooking and baking products. 54% of consumers in Generation Z said the same.