As the oat milk brand Oatly spread across the world last year, its chief executive, Toni Petersson, said his product – which boasts lower greenhouse gas emissions than conventional dairy – was not just another drink.
"For people today, sustainability is more of an ideology. It's a structured belief system, almost like a religion... but it's relied on what the science says," Petersson said. "And I think we, as a company, have a licence to take a place in that ideology."
If he is right, that may account for investors' optimism about his company, which, since its listing on New York's Nasdaq exchange last month, has surged to a market capitalisation of more than $14 billion. If plant-based food and drinks have a fraction of the staying power of kosher or halal, the current share price might turn out to be a bargain.
Petersson has also put his finger on something about consumers’ behaviour when it comes to sustainable products. What had been a niche pursuit has now become, for many, an article of faith.
Until recently, the conventional wisdom in consumer goods was that people would happily express their green preferences in surveys and largely discard them at the door of the supermarket, like parishioners who attend church only at Christmas.
But a surge in sales of green-marketed products like Oatly, whose revenues were about $400 million last year, shows this assumption to be outdated. Petersson says that, in Oatly’s key markets, 60-70 per cent of buyers only started buying plant milk in the past two years.
Market researchers are scrambling to keep pace with this trend and produce a more accurate portrait of the green consumer. Two consultancies, Brodie and Public First, surveyed thousands of people in the UK and US this year, dividing them by attitudes. Almost all expressed some concern about climate change.
About a fifth were “corporate optimists”, who have significant faith in business to solve environmental problems. They like to buy green and ethical products and are prepared to pay more for them. But they have a bias towards “easy wins” like recycling and smart energy meters. They are less likely to make drastic moves like vegetarianism or giving up flying.
Another group, “big power sceptics”, is smaller at 14 per cent in the UK, 9 per cent in the US. They are more despairing of the will of corporates and governments to tackle climate change, but are inclined to lifestyle changes such as giving up meat and buying second-hand. They tend to boycott, to protest and to pursue social media activism.
Other segments are less prepared to change. “Commercial realists” believe other factors, like the economy, must come first. “Pessimistic free-marketeers” think businesses are unlikely to change because they lack financial incentives to do so.
‘Superficial enthusiasts’
One of the largest groups is the “ethically disenfranchised”, who are too confused by sustainability jargon and dilemmas to act. As for “superficial enthusiasts”, they lack understanding but cheerfully say yes to every environmental question they are asked.
That means a majority of consumers have not fully embraced buying green. Reaching them is a challenge not just for commercial marketers but for governments seeking to push populations towards green energy, local holidays and electric vehicles. Behavioural shifts like these may help contribute about 20 per cent – or closer to 40 per cent in a positive scenario – to meeting international “net zero” goals.
To achieve widespread change, marketers will need to ensure new habits move beyond fad territory. For Oatly, that means proving wrong an executive at another food group who dismisses the company with the question: “How far can being very cool take you?”
And they will need to cultivate those new habits across the board rather than just among those with a bias to action. Plant-based foods and drinks like Oatly, for example, may easily find customers among the “corporate optimists”, but may have to go further to reach out to the less committed majority.
That includes removing excuses for consumers to look elsewhere, such as packaging they cannot recycle locally or language they struggle to relate to. Consumers view social issues as closely linked with sustainability, so big companies need to demonstrate ethical behaviour on wages and taxes if they want their green messages taken seriously.
Companies that make more expensive and higher-impact products like home insulation will have to work even harder. But the sustainability movement needs to make sure it is not just marketing to the converted. – Copyright The Financial Times Limited 2021
