A study into the growth of sustainable consumer behaviour in the food retail industry demonstrates the ongoing popularity of more sustainable products, despite the recent economic slowdown

How have consumer preferences and purchasing behaviour towards more sustainable food evolved in light of the COVID pandemic, high inflation, the war in Ukraine and the increasingly evident impact of climate change? A joint study by the REWE Group, the Consumer Panel Services GfK and the German Sustainability Award Foundation examined this issue. The results give cause for long-term optimism: sustainable products continue to enjoy popularity across the generations. This is despite the inflationary pressures that have caused German households to make cuts, which have led to a weakening of the trend in recent times.

The last few years, during which health, economic and political crises have occurred in ever faster succession, have placed huge demands on people, both personally and economically. The fact that more sustainable food remains a major concern for many consumers in such an uncertain environment is obviously a reason for optimism. The study’s findings and assumptions bolster our commitment to the ongoing systematic expansion of our sustainable offering, says Dr Daniela Büchel, REWE Group Board Member for Human Resources and Sustainability.

The study examined preferences and purchasing behaviour since 2018 in respect of organic produce, meat and meat substitutes, dairy alternatives and local produce, using data from the Consumer Panel Services GfK’s 30,000-strong panel of households. The findings were broken down by consumer generation and financial type and were supplemented by a recent ad hoc survey undertaken by Consumer Panel Services GfK on behalf of the REWE Group into attitudes and values relating to climate and reusable packaging.

Increasing relevance driven by younger generations

By 2021, sustainable consumption of organic produce, meat substitutes, dairy alternatives and regional products had experienced an upward “lift effect”, as it were, which was also reflected in the significant increase in expenditure, which by definition varied according to generation and household income. As a result of inflation, many consumers have now reduced their spending, which has noticeably weakened, but definitely not reversed, this growth. Indeed, the trend towards more sustainable products continues to be evident across all generations, with the increasing relevance and demand being driven primarily by the younger Generation Z and millennials.

Consumer willingness to pay more for more sustainable products also persists. Since 2022 however, there has been something of a downwards shift in the premium that consumers are willing to pay. Organic is part of the mainstream and is here to stay, but customers are now increasingly turning to cheaper brands. Moreover, when consumers feel the pinch, their purchasing decisions are often driven more by the product itself than by paying a premium for sustainable packaging. This is despite a generally high level of support for more sustainable packaging. And the upward trend in dairy alternatives and meat substitutes is now also stagnating, following a period of rapid growth up to and including 2021, although with more attractive pricing and a move away from positioning meat alternatives as a “substitute product”, potential for long-term growth still exists.

A need for information and a positive outlook

On the whole, the findings from the study and the additional ad hoc survey demonstrate that, while people have recognised the issues of sustainability and climate change with all its consequences as major challenges of our time, there is still a lack of clarity and a need for information regarding the influencing factors, emission drivers and the action they can take as individuals in terms of nutrition and consumer behaviour. The study provides insights into what drives people to make their shopping more sustainable. And into the information they need to make sustainable choices. According to Dr Otto Schulz, who is on the board of the German Sustainability Award Foundation e.V., this may support the growth, marketing and targeting of sustainable products.

Especially in challenging times, we need to win consumers over with a positive outlook for the future, and demonstrate how more sustainable consumption can enrich lives – in terms of quality of life, personal nutrition, enjoyment, the environment and social cohesion, instead of offering purely functional, technical and financial solutions to these problems, says Dr Robert Kecskes, Senior Insights Director Germany, Consumer Panel Services GfK.