Aura’s Trevor Yong shares insights from his recent visit to Velocity Institute’s Sustainability Summit 2023.
Attending the Velocity Institute’s Sustainability Summit in September 2023 brought me back to the capital of Texas, the thriving city of Austin. Velocity Institute represents the entire private brand industry and aims to support the retail sector to innovate, connect and grow.
It’s an interesting event because the private brand sector is steadily stealing market share from national brands. Retailers are investing heavily in innovative, high-quality products to rival the household brands that we all recognize. Private brands now account for over 20% of sales for many retailers in the USA.
This growth is set to continue. Consumers are feeling the pinch and are more likely to consider cheaper alternatives if the quality is comparable. The margins on private brands are attractive for retailers and that’s before we acknowledge the increased customer loyalty that selling these products encourages.
Packaging plays a significant role in the consumer decision-making process. We know this more than most here at Aura as our sister company, Sun Branding, works with leading retailers and brands on their brand packaging, aiming to wow and delight the consumer.
As retailers add to their private brand product portfolios, making the right choices with packaging can be challenging. As we heard on more than one occasion at the Velocity Institute Summit, consumers are becoming more discerning during the buying process.
In particular, younger consumers are increasingly inclined to evaluate the sustainability of their purchases, considering environmental certifications, packaging, and, of course, the impact of the product itself on the environment.
“…younger consumers are increasingly inclined to evaluate the sustainability of their purchases, considering environmental certifications, packaging, and, of course, the impact of the product itself on the environment…”Trevor Yong, Business Development Director, Aura
Brand positioning is therefore a challenging consideration for retailers. Even products in the budget price range are being specified with recyclable packaging by product developers.
The Velocity Institute conducted “The State of Green,” a survey of over 80 leading organizations. It delivered some fascinating insights.
- 26% of participating organizations have publicly stated sustainability goals.
- 25% of participants have an in-house sustainability team.
- Most notably, 43% stated that they are experiencing “complexities in gathering data.”
This last statistic is the issue.
Gathering data is challenging. Speaking to the retailers at Velocity, most of them do not know where to start. They are embryonic in their packaging strategies because without data, they can’t justify further investment. This vicious cycle results in inertia. Often, retailers default their focus to discrete, specific packaging improvements such as converting the primary substrates to a seemingly more sustainable alternative. This is certainly better than doing nothing but it lacks a meaningful, measurable strategy. It isn’t in partnership with their supply chain. It isn’t driven by a specific end goal. It’s just “doing something.”
Me being me, I asked a few questions of the various presenters to gauge their current business stance on sustainability. Representatives of Whole Foods Market, a part of the Amazon family, were laser-focused in their efforts to lead on sustainability. I asked what recommendations they would give to companies who are struggling to justify the perceived increase in costs of being sustainable. Caitlin Leibert, VP of Sustainability, had a reassuring answer:
- It will cost organizations less if they commit to sustainability now
- Consumers are willing to pay more for products when they see value
Will investing in sustainability increase sales? Possibly.
Will it improve consumer loyalty? Probably.
Will it help us save the planet? Certainly.
The opportunity exists to achieve amazing things but only if we act now.
If you are interested to know how Aura can support you in your journey to measurable sustainable packaging, please do get in touch using the contact form below, alternatively, call 01274 202 400