By the end of 2023, European shoppers could breathe a small sigh of relief after inflation slowed faster than many economists had expected. This was a welcome respite from the stomach-churning 10.6% rate recorded at the height of the region’s energy crisis in October 2022.
Nevertheless, cost of living pressures are still being felt by many families across Europe. Interest rate rises have caused European economies to slow down, with eurozone countries seeing output decrease by 0.1% in the period of July to September.
Germany, the continent’s economic powerhouse, is now at risk of falling into a technical recession after its economy shrank in Q3. Meanwhile, inflation in the U.K., despite reaching its lowest rate in two years, remained stubbornly high at 3.9% for November, compared to 2.4% in the eurozone.
It is encouraging to see, therefore, that while budgets were still tight for many European families this year, shoppers’ commitment to sustainability remains firm. According to research commissioned by Elopak and carried out by Absolute Market Research, 75% of U.K. consumers consider companies’ environmental commitments to be important when making shopping decisions, with one-third willing to switch to brands that are taking steps to be more sustainable.
Concerns over sustainability are particularly pronounced in the food and drink market, with four out of five consumers saying they intentionally choose products with a sustainability claim. Within this, packaging is regarded as an important touchpoint, as a third of shoppers claim to make environmentally conscious decisions about their packaging choices and three-quarters of those surveyed said they prioritise fully recyclable packaging.
Likewise, the Sustainable Consumer survey by Deloitte found that single-use plastic packaging is a serious concern for U.K. shoppers, 64% of whom said they try to limit the amount they use in 2023. This figure has remained consistent since 2022, despite the ongoing cost of living squeeze.
Even in a market with as persistent inflation as the U.K., we are seeing many of the green habits formed during the pandemic continue to flourish. Packaging is evidently an important medium for empowering this behavior, with 55% of respondents saying they prefer to get information about a product’s environmental impact directly from its packaging.
However, the research by Deloitte shows that affordability continues to be a barrier to even more sustainable shopping habits. Of the U.K. consumers surveyed, 62% said high prices are holding them back from being more sustainable, while 52% said they want sustainable alternatives to be more affordable.
Information is also an important factor in empowering more sustainable choices. Modern shoppers have never been so engaged with the products and packaging they purchase, with 72% of those surveyed by Elopak interested in learning about a product’s environmental impact. A similar proportion (seven in ten) said they are keen to learn about the environmental impact of the packaging they buy.
However, awareness of products’ environmental benefits is currently inconsistent. While 67% of survey respondents said they feel well-informed about the concept of recycling, only 33% say they adequately understand a product’s carbon footprint and just 13% feel au fait with the circular economy. This presents an opportunity for businesses that are walking the walk on sustainability to spend more time and resources on explaining these benefits to consumers.
As we look to 2024 and the prospect of further economic recovery beyond, we can be all but certain that consumer demand for sustainability will continue to grow. Elopak’s research found that two-thirds of consumers said they were likely to move to a brand which demonstrated they were taking steps to mitigate climate change, assuming price and availability were the same. This was even more pronounced among younger generations, with Gen Z scoring the highest of all.
Businesses will therefore need to invest in innovations that offer more sustainable options to consumers while doing everything possible to keep prices stable. They will also benefit from educating consumers about their sustainability goals in greater detail.
In both instances, packaging is a useful tool that provides a well-understood platform for sustainable innovation, as well as a useful medium for giving consumers access to information. Getting this right could bring substantial upsides for companies: slashing emissions and building a loyal customer base among the next generation of shoppers.
Thomas Körmendi is the CEO of Elopak, a global supplier of carton-based packaging.
More must-read commentary published by Fortune:
- Economic pessimists’ bet on a 2023 recession failed. Why are they doubling down in 2024?
- COVID-19 v. Flu: A ‘much more serious threat,’ new study into long-term risks concludes
- Access to modern stoves could be a game-changer for Africa’s economic development–and help cut the equivalent of the carbon dioxide emitted by the world’s planes and ships
- ‘Parroting Putin’s propaganda’: The business exodus over Ukraine was no Russian bonanza
The opinions expressed in Fortune.com commentary pieces are solely the views of their authors and do not necessarily reflect the opinions and beliefs of Fortune.