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The Ethical Consumer - US - July 2015

"Ethics have become increasingly important to a company’s reputation. In the internet age, consumers can easily access information on a company’s ethical track record and opinions (both positive and negative) can spread quickly through social media. Due to a nearly ceaseless stream of information, consumers are bombarded with issues to care about, and many do feel that they should take a stance in support of or against differing opinions. How they go about showing or demonstrating a commitment, however, varies from passive avoidance (ie, inaction) to zealous evangelism."
- Lauren Bonetto, Lifestyles & Leisure Analyst

This report discusses the following key issues:

  • People expect ethical behavior – What is the best way to communicate the message?
  • Confusion over ethical terms and icons may lead to rejection
  • Taking a stance on a polarizing issue can attract and repel 
  • Big companies struggle with an image problem
  • Consumers more likely to punish the bad than to reward the good

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Table of contents

  1. Overview

    • What you need to know
      • Definitions
      • Executive Summary

        • The issues
          • People expect ethical behavior – What is the best way to communicate the message?
            • Figure 1: How often ethics influence purchasing decisions, April 2015
          • Confusion over ethical terms and icons may lead to rejection
            • Figure 2: Attitudes toward ethical claims, icons, and terms, April 2015
          • Taking a stance on a polarizing issue can attract and repel
            • Big companies struggle with an image problem
              • Consumers more likely to punish the bad than to reward the good
                • Figure 3: Actions taken related to company ethics, April 2015
              • The opportunities
                • Ethics matter – and people feel they’re becoming even more important
                  • Clearer marketing messages can boost the positive effect of ethics
                    • A misstep can be used to demonstrate commitments toward improving
                      • What it means
                      • The Market – What You Need to Know

                        • Ethical claims grow significantly over past 10 years
                          • Ethics stand to become even more important in the future
                          • Ethical Product Launches

                            • Ethical claims attached to nearly one third of products
                              • Figure 4: Share of total US product launches with an ethical claim, 2006-15*
                            • ‘Environmentally friendly package’ accounts for more than half of ethical claims
                              • Figure 5: Share of US product launches with an ethical claim, by ethical claim type, 2006-15*
                            • While most categories see growth, BPC and health somewhat stagnant
                              • Figure 6: Share of US product launches with an ethical claim, by product category, 2006-15*
                          • Market Factors

                            • As Millennials become full-fledged adults, ethics become increasingly important
                              • Figure 7: Population by generation, 2010-20
                            • The ‘connected’ consumer may be a more ‘concerned’ consumer
                              • Median household income slowly begins to rise
                                • Figure 8: Median household income, in inflation-adjusted dollars, 2003-13
                            • Key Players – What You Need to Know

                              • What’s working: Putting people ahead of profits
                                • What’s struggling: BIG – Big companies, big box retailers, big banks, big oil
                                  • What’s next: LGBT rights, living wage, gender equality
                                  • What’s Working?

                                    • Putting people ahead of profits
                                      • Promoting the brand over the product
                                      • Case Studies

                                          • Chipotle
                                            • Marketing efforts promote ethics, education, engagement
                                                • Figure 9: “Farmed and Dangerous Official Trailer,” online video, 2014
                                              • Whole Foods Market
                                                  • Figure 10: “Values Matter Anthem,” online video, 2014
                                              • What’s Struggling?

                                                • Big companies struggle to cultivate an ethical image
                                                  • Big box retailers both loved and loathed
                                                    • Fast food restaurants continue to be served with blame
                                                      • Big banks and big oil
                                                      • What’s Next?

                                                        • In wake of Supreme Court ruling, LGBT community cannot be dismissed
                                                          • Minimum wage increasingly thought of as unliveable
                                                            • Feminism enjoys renaissance
                                                            • The Consumer – What You Need to Know

                                                              • Majority of consumers area at least somewhat influenced by ethics
                                                                • Top concerns include employee treatment, provenance, sustainability
                                                                  • Big companies make big targets
                                                                    • Consumers more inclined to punish “bad” companies than to reward “good” ones
                                                                      • Bouncing back after an ethical dilemma
                                                                      • Influence of Ethics on Purchasing Decisions

                                                                        • Seven in 10 consumers at least somewhat influenced by company ethics
                                                                          • Figure 11: How often ethics influence purchasing decisions, April 2015
                                                                        • Men, higher income, younger consumers most impacted by ethics
                                                                          • Figure 12: Purchasing decisions are often/always influenced by ethics, by gender and age and by parental status, April 2015
                                                                      • Ethical Factors Considered

                                                                        • Top concerns include employee treatment, provenance, sustainability
                                                                          • Figure 13: Factors considered to determine how ethical a company is, April 2015
                                                                        • Those who are influenced may seek to reward or punish companies based on ethics
                                                                          • Figure 14: Top factors considered to determine how ethical a company is, by those who say company ethics influence their purchasing decisions, April 2015
                                                                      • Notorious and Noted Companies

                                                                        • Big companies make big targets
                                                                          • Figure 15: Top 20 companies mentioned as especially ethical or especially unethical, April 2015
                                                                        • Consumers want to believe the best of brands they often use
                                                                          • In their words – The most ethical companies
                                                                            • “Unethical companies” reputations influenced by well-publicized scandal
                                                                              • In their words – The least ethical companies
                                                                              • Actions Taken in Response to Company Ethics

                                                                                • Consumers prefer to support ethical companies without spending money
                                                                                  • Figure 16: Actions taken related to ethical/unethical companies – Telling others, April 2015
                                                                                • Consumers more inclined to punish the bad than reward the good
                                                                                  • Figure 17: Actions taken related to ethical/unethical companies – Purchasing, April 2015
                                                                                • Young men especially engaged, Millennials least likely to ‘do nothing,’ parents set an example through ethical purchases
                                                                                    • Figure 18: Actions taken related to ethical/unethical companies – Social media and purchasing, by gender, young age, generation, parent status, April 2015
                                                                                  • In their words
                                                                                  • Ethical Icon Recognition

                                                                                    • Using icons to communicate ethics may not be effective
                                                                                        • Figure 19: Icon recognition, April 2015
                                                                                      • Icons speak more to Millennials
                                                                                        • Attitudes toward claims, icons, terms reveal skepticism and confusion
                                                                                          • Figure 20: Attitudes toward ethical claims, icons, and terms, April 2015
                                                                                        • In their words
                                                                                        • Attitudes and Opinions toward Ethics

                                                                                          • Size matters – Large companies thought of as unethical
                                                                                              • Figure 21: Attitudes toward company size, by gender and age, April 2015
                                                                                            • Bouncing back after a scandal
                                                                                                • Figure 22: Skepticism toward company ethics, by gender and age, April 2015
                                                                                              • Supporting ethical companies makes consumers feel good
                                                                                                • In their words
                                                                                                  • Figure 23: Personal feelings about company ethics, by gender and age, April 2015
                                                                                              • Consumer Segmentation

                                                                                                    • Figure 24: Ethical Consumer segmentation, April 2015
                                                                                                  • Ethics and the City (35%) – The young, urban, and influenced
                                                                                                    • Lost Causes (39%) – Ethics on the outs with older, suburban consumers
                                                                                                      • Wanting to be Won (26%) – Selective but dedicated
                                                                                                          • Figure 25: Attitudes toward company ethics, by ethical consumer segments, April 2015
                                                                                                      • Appendix – Data Sources and Abbreviations

                                                                                                        • Data sources
                                                                                                          • Consumer survey data
                                                                                                            • Consumer qualitative research
                                                                                                              • Abbreviations and terms
                                                                                                                • Abbreviations
                                                                                                                • Appendix – The Market

                                                                                                                    • Figure 26: Share of US product launches with an ethical claim, by ethical claim type, 2006-15*
                                                                                                                    • Figure 27: Share of US product launches with an ethical claim, by product category, 2006-15*
                                                                                                                    • Figure 28: Share of US product launches with an ethical claim, by product category and by ethical claim type, 2014-15*
                                                                                                                • Appendix – Qualitative Research

                                                                                                                  • The most ethical companies
                                                                                                                    • The least ethical companies
                                                                                                                      • Consumers who are influenced by ethical efforts
                                                                                                                        • Consumers who are not influenced by (or are averse to) ethical efforts
                                                                                                                          • Attitudes toward company size

                                                                                                                          Companies Covered

                                                                                                                          To learn more about the companies covered in this report please contact us.

                                                                                                                          The Ethical Consumer - US - July 2015

                                                                                                                          US $3,995.00 (Excl.Tax)