Creating A Feeling Of Authenticity And Purpose Wins With Consumers
Sustainability means different things to different people. For some, it may be environmentally friendly, for others it may be that the product is created ethically. In some cases, it boils down to how consumers feel about how you treat your employees.
If you balance meeting consumers’ emotional needs which often include a strong sense of purpose and sustainability and do that affordably, then brands will struggle to scale..
I spoke with Ujwal Arkalgud, cultural anthropologist, co-Founder and CEO of Motivbase, who has been studying the”cultural requirements” that exist in the mind of the consumer that give added-value to products and brands. His guidance? Create the feeling of authenticity and purpose rather than just the feeling of buying into a gimmick.
Jeff Fromm: What are the big sustainability trends getting momentum now?
Ujwal Arkalgud: As an anthropologist, the thing that’s interesting to me is how consumers assign meaning to sustainability. When you look through the lens of meaning, you see trends in ways that we normally wouldn’t. One important example of that is that sustainability is part of a package deal. What that means is it’s not possible to just solve a problem in the area of sustainability. An organization or a company has to consider the other cultural requirements that go hand in hand with the issue of sustainability or the sustainability problem that they’re solving.
So one such issue that goes hand in hand is this notion of qualities. The consumer has come to expect that a product that is more sustainable is also significantly better in quality compared to its peer group. If an organization misses on one of these, then they don’t get the seal of approval from the consumer, and they don’t get the net benefit on the other end, in terms of loyalty, or higher price point, or whatever else that might be.
Fromm: What trends do you see in the sharing economy?
Arkalgud: There are some interesting things going on in the sharing economy. In particular, because as consumers, we’ve all become a lot more comfortable with the idea of sharing resources, thanks to the Airbnbs and the Rent the Runways of the world. However, the consumer is now starting to realize that while these shared resources have worked well in the case of big ticket items, assets and purchases, they want to see this model applied to everyday household products. In particular, they want to see how organizations might be able to share resources when it comes to, let’s say, how everyday products are manufactured or distributed and consumed. Obviously, one of the first points of focus here is how retailers ship products to consumers.
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There’s certainly a lot of opportunity and I think every CPG company in particular should be considering, especially as they think about partnerships with other brands or companies that are not competitive, but rather could be deeply helpful to their sustainability initiatives.
Fromm: How do you see upcycling influencing the food and treat industries? Will the CPG food companies perhaps see impacts of upcycling?
Arkalgud: Upcycling is one of those things that has existed, especially if you look at other cultures, who are very comfortable with upcycling food. When a particular food item, for example dairy, goes bad, you don’t throw it out, you make something else with it.
Now, that idea that you don’t throw away food, but rather upcycle it, turn it into something else of value, is still fairly new for us in North America. It’s certainly getting an interesting trendy name, but it’s being applied in the manufacturing of food in very interesting ways. It’s setting the stage for a whole range of opportunities and solutions in this space.
I’ll give you one example, a company called Renewal Mill is an amazing example of a company that takes a by-product of tofu manufacturing and makes okara specifically, and makes everything from a flour through to cookies. So they’re, in essence, taking nutritious food that otherwise would have been disposed of, and turning it into valuable, tasty, delicious food items and baking items that they can now sell and upcycle.
Fromm: Are consumers willing to pay more for a solution if it’s more sustainable? And if so, how much?
Arkalgud: This is the billion dollar question, if you will. This comes back to the first point I made when we started this interview, which is that a lot of organizations don’t understand that there are other related requirements that go hand in hand with sustainability initiatives. They cannot expect the consumer to pay more by just taking the existing product and then making it slightly better for the environment. That’s not going to drive greater margins for them.
If they want greater margins, they have to consider the other related requirements. One such requirement relates to the quality of the product and the product experience and that relates to the quality of the package experience. What they need to be asking is, “What are the other related requirements that will allow me to elevate my product?” And once they do that, they can then expect the consumer to pay more. The short answer is yes, the consumer is willing to pay more, but not just for the same product with a slightly better for the environment bend.
Fromm: What are you seeing through the lens of racial, economic and social justice? Because our research says the conversation on sustainability has evolved to be balanced toward racial, social and economic justice, not just environmental justice.
Arkalgud: Speaking through the lens of meaning, when you say sustainability, consumers think environment. But the moment you say responsibility, it becomes much greater than that. Environment is a part of it, and when people think of responsible consumption, social issues, social justice, accessibility becomes a really critical component of that. And it’s very interesting, because then the conversation centers around access, it centers around issues of affordability. Obviously, food is a core part of that. But in particular, so are various other household items.
The greatest impact we can see the pandemic had is increasing the education level, of the consumer in their understanding of how sustainability is not equitable, responsibility is not equitable. It’s easy to be responsible as a consumer when you have money in your pocket when your savings have gone up 30% through the pandemic, but it is very difficult to do that if you’ve lost your job or have half of your income. That has put the onus on organizations and companies as consumers are asking companies to innovate in this space. They’re not asking companies to give things away, they’re not asking them to make donations. They’re asking companies to innovate, to make better for the environment, better for communities, solutions, more accessible and more affordable.