Why consumers don't yet know about your sustainability efforts - Sustainability Spotlight

A recently-published study suggests consumers may not be as drawn to Anheuser-Busch InBev's new 100% renewable electricity icon as the brewer might hope for. But, Ben Cooper writes, there are factors other than consumer sentiment driving the beverage sector's investment in renewable energy.

Those leading Anheuser-Busch InBev's push to promote its progress on renewable energy may have been somewhat deflated to see research published earlier this month by QuadPackaging (QP) and Package InSight, a specialist in eye-tracking technology attached to Clemson University, South Carolina. A-B InBev proudly unveiled its 100% renewable electricity icon in January along with plans for it to feature on every Budweiser label in the US from the Spring.

However, the QP/Package InSight study leaves one wondering how many Bud drinkers have so far noticed the change.

The study was designed to test whether the inclusion of a visual element showing a sustainability rating will increase consumer attention and sales when compared to the same package with no sustainability rating. While 41% of the participants in a post-test survey claimed that sustainability influences their purchase decisions, according to the eye-tracking technology 92% failed to notice sustainability logos added to certain products used in the trial.

"Our study found that while sustainability is important to consumers, they did not make purchase decisions based on a visual rating system," the researchers concluded.

This eye-tracking study will be added to the considerable body of research that has been conducted into how consumers react to sustainability logos. According to Ecolabel Index, which claims to be the largest global directory of ecolabels, there are currently 463 ecolabels in existence across 199 countries and 25 industry sectors. These include ethical labels, such as Fairtrade, as well as environmental sustainability certifications.

Market research is constantly telling branded companies that sustainability is more important to consumers. Earlier this month, Unilever reported the fourth consecutive year of growth for its 'sustainable living' brands, which grew 46% faster than the rest of the business and delivered 70% of its turnover growth. However, notwithstanding the strong growth in many food and drink products with higher sustainability or ethical standards, research also reveals a gap between how consumers say they will behave and how they actually do behave while shopping.

Exactly how consumers react to visual cues on-pack in the few seconds they typically spend weighing up purchases in-store is clearly significant in understanding and perhaps closing that gap. It should be noted, however, that the QP/Package InSight study used product packages the researchers had created rather than actual food and drinks products, and was conducted in a "retail lab", namely the Clemson University shop, not a supermarket.

For its part, A-B InBev says its '100% renewable electricity' symbol can "show consumers that their purchasing choices can have a positive impact". The US is the first market where the brewer is able to make the claim, as it now sources enough electricity from Enel Green Power's Thunder Ranch Wind Farm in Oklahoma to cover all the electricity needed to brew Budweiser in the country. The logo will be rolled out to other markets as they reach the same milestone, while the company as a whole is committed to obtaining all its purchased electricity from renewable sources by 2025.

Even if the benefit the symbol brings in terms of increased sales or enhanced brand loyalty is relatively limited in the context of the global volumes of Budweiser, it is increasingly the economic benefits of renewable energy that companies are eyeing.

The International Renewable Energy Agency (IRENA) forecasts that all renewable energy technologies will compete with fossils on price by 2020. In its recently-published report on corporate sourcing of renewable energy, IRENA places the management of climate-change objectives and reputational factors above economic and financial drivers for companies, but says the latter "will likely increase in importance as renewables become even more cost-competitive". These drivers extend beyond simply seeking out cheaper energy but also relate to securing better long-term price stability and energy security, the report adds.

The drinks sector already has a relatively good record on renewable energy. Generating electricity from biomass in combined heat and power plants (CHPs) has become increasingly common in distilleries and breweries across the world, while drinks producers have also invested in anaerobic digesters to convert by-products into energy.

In its 2018 Environmental Strategy Report, published last month, the Scotch Whisky Association reported that the sector had reached its 2020 target - to meet at least 20% of its primary energy needs from non-fossil fuel sources - four years ahead of schedule. According to the report, the proportion of energy coming from non-fossil fuels increased from 3% in 2008 to 21% by the end of 2016.

Major drinks corporations are well represented in the 134-strong membership of RE100, a global coalition of companies that have made a time-bound commitment to source all their electricity from renewable sources, launched in 2014 by environmental NGO The Climate Group and the Carbon Disclosure Project. In addition to A-B InBev, the RE100 roll-call includes Unilever, Nestle, Diageo, Danone, Coca-Cola European Partners and Carlsberg.

A-B InBev says it is working with a number of NGOs and professional services firm Accenture to develop "a process and guidelines" to encourage other brands to adopt its 100% renewable electricity symbol. As more companies increase their use of renewable energy, they will naturally seek to maximise the reputational benefits by communicating this to consumers. On-pack symbols, therefore, are likely to become more common. As they become more common, consumers, in turn, will be more likely to look out for them, which should help further build momentum in renewable energy.

Right now, particularly while on-pack logos of this sort remain relatively uncommon, it may be that the 100% renewable electricity logo is seen by some consumers as a proxy for Budweiser's broader sustainability credentials. If so, this would be a highly-desirable outcome for A-B InBev.

There will always be restrictions on how much sustainability information a brand can include on a label, and probably even greater limitations on what a shopper will notice. As sustainability becomes more important to consumers, companies will strive for their brand names themselves to trigger sustainable or ethical cues in consumers' minds in the same way as they might convey other attributes such as exclusivity or value for money.

Above all, that Budweiser is a sustainable brand is the message A-B InBev wants to communicate.

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