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Inflation Testing US Consumers ‘Resolve’ in Sustainability-Price Ratio

A new Stifel survey found most consumers value sustainability when making purchasing decisions, but Americans are reassessing spending priorities as economic conditions change.

While 81 percent of consumers believe it’s important for companies to act sustainably, only 64 percent are now willing to pay more for brands with leading sustainability practices, down from 67 percent last year. Against a backdrop of spiking inflation, consumers are prioritizing good value, low price and reputation for durability when purchasing active and casual lifestyle brands, the survey said.

Consumers’ sustainability priorities remained consistent with 2021, while other considerations were viewed as lower priorities, including style, innovation, uniqueness and trendiness. What was trending, perhaps a nod to the current economic backdrop, was 63 percent who now regularly consider pre-owned, secondhand or refurbished goods when purchasing active and casual lifestyle brands.

“Sustainability plays heavily into purchasing behaviors for an overwhelming majority of U.S. consumers, and especially so for younger, Generation Z shoppers,” said Jim Duffy, managing director and sports and lifestyle brands analyst at Stifel. “With inflation, however, we are being asked to pay more for everything. This is testing resolve for consumer willingness to pay a premium for brand attributes including leading sustainability practices.”

Stifel, working with Morning Consult, recently surveyed 4,679 U.S. active and causal lifestyle brand consumers ages 18 to 55. Of note, 56 percent look for information about a brand’s sustainability practice when contemplating a purchase, while 71 percent consider sustainability factors when choosing between brands and 58 percent have purchased a new product specifically for sustainability reasons.

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Leading sustainability priorities that consumers consider “very important” include giving workers fair pay and benefits, supporting racial equality and protecting local environments and ecosystems.

The inflationary backdrop is having influence on brand perceptions and giving consumers a more cynical view. Relative to last year, more consumers indicated belief that brands are more profit-focused but fewer consumers now say that brands are increasing their focus on social issues and positive community influence.

The survey also questioned 5,325 additional active-causal lifestyle brand consumers in the same age group across the U.K., Germany, France, Italy and China. Across all markets, at least four out of five category purchasers say it’s important that brands operate sustainably.

For example, 59 percent of French consumers and 42 percent of Italians named sustainability a “top three” purchasing priority compared to 31 percent of Americans who feel the same. More than half of respondents in China, France, Germany and Italy have boycotted or stopped buying a brand or product specifically over sustainability concerns, while only 45 percent of British consumers and 41 percent of Americans have done so.

In conjunction with the survey, Stifel updated its Sustainable Lifestyle Brands Index that ranks brands based on U.S. active-casual lifestyle consumer perception of brand sustainability practices.

For the second year in a row, Bombas (No. 1), Patagonia (No. 2) and The North Face (No. 3) notched the top overall scores. Rounding out the top five were YETI (No. 4) and Hydro Flask (No. 5), both cracking the leader board for the first time.

“Consumer appreciation for YETI and Hydro Flask’s contribution to the elimination of single-use plastic highlights that consumers value the positive influence of product and environmental campaigns alongside efforts to minimize resource consumption in the supply chain,” Duffy said.

Stifel Financial Corp. is a financial services holding company headquartered in St. Louis that conducts its banking, securities and financial services business through several wholly owned subsidiaries.