September 2024

The societal impact of the Gen Z cohort emerging into the working population with firm beliefs about sustainability will add pressure on retailers and FMCG companies to more fully understand the implications of environmental change for shoppers and categories.

This is according to Patrick Finlay, Managing Director of The Category Management Company. He cites two studies, one by Barclaycard, suggesting 82% of Gen Z have concerns about sustainability and another by First Insight, highlighting that 75% of Gen Z place sustainability higher than brand name, at 49%, as a factor important to purchase decisions, as reasons for 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’,” said Finlay.  “And others, such as Asda, who recently abandoned its refill and reuse trial, have at least taken a punt; lessons learned and returned to the drawing board.

“But the full realisation of any meaningful sustainability strategy will likely be a slow burn; for most of the major retailers, the ambition is to get to net zero for their internal operations by 2035. Set this against the Gen Z beliefs, and you have to ask as we enter our next three to five-year planning cycle, whether another five-flavour range extension is really going to cut it!”

Finlay believes the learning is simple: “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 have taught me that, to paraphrase our 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.”

He notes that this is perhaps more pronounced in these uncertain times when it is those who are bold and have the courage of their convictions to invest in the long term who will be remembered for creating sustainable value for everyone.

“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,” said Finlay.

“For our industry, we need retailers and their suppliers to lead and innovate because we’re still in a phase of experimentation, 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.”

He argues that this kind of change does not happen by chance or good fortune. “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.”