Gen Y demands ethical business

Generation Y consumers are demanding ethically made goods.

Businesses must cater to the increasing needs, desires and purchasing power of Gen Y Kiwis driven by sustainability concerns, according to a new Colmar Brunton survey.

That's the key finding of the 2013 Better Business Report which gauges Kiwis' attitudes to sustainability. The survey also shows sustainability has become more mainstream for New Zealanders and is particularly influential in what we eat and drink.

Colmar Brunton CEO Jacqueline Ireland says Gen Y is increasingly motivated by sustainability issues and we are seeing the beginnings of a seismic generational shift that will continue to drive sustainability into the future.

"Sustainability for Kiwis is about the future - preserving our way of life for the next generation and beyond," Ms Ireland says.

"Being sustainable is the choice of Gen Y. It is a generation that will rival the size of the boomers and their decades of heaviest consumption are still ahead of them. They are already growing up starting families, building lives and buying big ticket items as well as everyday products. They are the consumers of the future so businesses that do not take note should beware."

While Gen Y spans the 13-29 age group, currently 16 per cent of New Zealand's population are classed within Gen Y and over 18 years of age. That is set to rise rapidly with 18+ Gen Y consumers making up 24% of the market within five years.

The 2013 survey showed that 67 per cent of Gen Y Kiwis buy organic foods (up from 50 per cent in 2011), 80 per cent buy fair trade products (65 per cent in 2011) and 76 per cent buy eco-friendly cleaning products (69 per cent in 2011).

Similarly their concerns about sustainability issues such as pollution of lakes and seas (54 per cent), protection of native plants and animals (50 per cent), the impact of processed foods on our health (48 per cent), the unsustainable use of natural resources in New Zealand (46 per cent) and others have all risen sharply since 2011, reflecting the generational shift in attitudes.

"The good news for businesses is that Gen Y are more flexible than other Kiwis when it comes to spending their money and are prepared to pay a premium to feed their sustainability desires."

Cost has become less of an issue than two years ago and significantly more Gen Y Kiwis (38 per cent) than in 2011 (31per cent), are prepared to pay whatever it costs to get the best organic, sustainable and ethically produced products.

"Another trend for businesses to note is the burgeoning desire for all the facts so Gen Y Kiwis can make informed decisions."

A massive 94 per cent of Gen Y New Zealanders want to see all the information about the environmental and sustainable implications of their purchases. Almost three quarters of them are also keen on the idea of businesses rewarding customers who choose sustainable options with discounts or special benefits.

The survey revealed that sustainability has become mainstream for Kiwis, as illustrated by 84 per cent of Kiwis in favour of extending marine reserves and 60 per cent supporting regional GE-free zones.

New Zealand consumers generally want to do the right thing and make sustainable choices, especially if it is easy and doesn't cost any more (76 per cent), while a clear majority (61 per cent) are prepared to pay a little more for organic, sustainable or ethical products. The exception is Gen Y who are prepared to pay a premium in much greater numbers than the rest of the population.

Across the population, sustainability considerations when choosing who to deal with or purchase from are increasing. More than two thirds of the population are influenced by issues of sustainability when choosing energy / power companies (74 per cent), food and beverage products (69 per cent) or food retailers (69 per cent). More than half of Kiwis consider sustainability when choosing car makers, technology and communications suppliers, fast food companies and airlines, while 45 per cent think about sustainability when choosing a bank - up from 32 per cent just two years ago.

Jacqueline Ireland says how we produce food and what we eat and drink have emerged as key future territories.

"Between 2011 and 2013 there has been a jump of 19 per cent in the number of people purchasing organic foods and a 13 per cent increase for purchasing free trade products, while 95 per cent now prefer to buy locally produced products rather than imported ones."
Ms Ireland says Kiwis are including more sustainable options in what they eat with 78 per cent growing some of their own fruit and vegetables at least sometimes.

Further evidence that sustainability has become mainstream is illustrated by the fact that 96 per cent of those surveyed say they recycle, try to be energy efficient (95 per cent) and use a reusable water bottle of coffee cup (93 per cent).
Sustainable Business Network CEO Rachel Brown says the Better Business Report reflects trends her organisation is seeing and sends a strong signal to the market.

"We too have seen increased awareness and associated activity around a host of sustainability issues, particularly amongst Gen Y, who are our future business, political and community leaders. It's now business's role to respond because in five years' time Gen Y will have very significant power in the personal and professional roles."

Colmar Brunton conducted the online survey with 1000 online New Zealanders representing the national spread of age, gender and region. The survey has a margin of error of + or - 3.1 per cent.