Latin America ranks highest in the world in terms of consumers who believe it 'extremely or very important' companies implement programs to improve the environment, with 94% citing so. This compares to just 69% in North America and 68% in Europe, according to The Conference Board's Global Consumer Confidence Survey, conducted in partnership with Nielsen in Q2 2017.
Fabiola de la Portilla, management director of Thought Leadership & Knowledge Latin America at Nielsen, said the need for sustainable commitments in the region would become “the next FMCG revolution”.
“Sustainability is becoming the new demand of consumers and governments, and the fast-moving-consumer-good companies which want to survive in the future should consider pro-environment actions and product claims,” De la Portilla told NutraIngredients-LATAM.
Be 'proactive' and 'prepared'
Industry, she said, had to be “proactive” and “prepared”, particularly as governments mounted pressure to be fully accountable and transparent.
Transparency on ingredients, procedures and labeling, for example, would be paramount, as would a shift towards natural, simple ingredients and environmentally-friendly processes and products, she said.
Across Latin America, Nielsen data indicated 74% of consumers felt more positive about companies that were transparent with where and how products were made, and in Mexico and Peru this percentage was even higher at 76% and 75%, respectively.
In addition, 75% read labels carefully for nutrition content and 62% were willing to pay more for food and drinks without undesirable ingredients.
“Latin American consumers want transparency and choice to make better food and beverage decisions,” De la Portilla said. “...Health and wellness continue to remain number one priority, hence they will be even more willing to pay for products that help them take care of their health and their environment.”
And with 80% of consumers in the region “actively making dietary choices to help prevent certain health conditions”, including obesity, diabetes, high cholesterol and hypertension, she said product reformulation with the aim of becoming “leaders in proven functional foods” was increasingly relevant.
She said it would also be important companies enriched the overall consumer experience and connection around a product's health and environmental attributes, remaining honest at all times.
“Consumers will favor companies which have a strong contribution to their health or environment, but companies should be careful of being authentic – stand behind claims,” she said.
A price to pay?
De le Portilla said, importantly, consumers across LATAM were “highly willing” to pay more for products that prioritized health and the environment.
Across the region, 42% said they were highly willing to pay more for those containing environmentally friendly/sustainable materials or organic/all-natural ingredients and 34% would pay a premium for products with social responsibility claims.
These percentages were even higher in Colombia and Costa Rica, with 44% of Colombian consumers willing to pay a premium on products delivering social responsibility claims; 64% for products containing environmentally-friendly or sustainable materials; and 58% on products with organic or all-natural ingredients. In Costa Rica, 42% of consumers would pay a premium for products with social responsibility claims; 46% for products with environmentally-friendly or sustainable materials; and 48% for products made with organic or all-natural ingredients.
Across LATAM, environmental concerns and related shopping behavior were strongest in Colombia, according to Nielsen, with just over one-third of consumers willing to give up a variety or range in order to buy environmentally-friendly products and 60% willing to give up a brand.