The EY Future Consumer Index Survey reveals deepening concerns around inflation (96 per cent) and climate change (84 per cent) are pushing Canadians to change how they live and what they buy.
“Over the last few years, there has been a gap between intention and action for both companies and consumers in their efforts to address sustainability, but the real effects of environmental change on people’s lives is narrowing that gap and sparking a new wave of change,” said Monica Chadha, EY Canada Retail Leader. “As we head into the holiday season and beyond, we’ll see more shoppers take control and do their research to optimize for both economic and environmental benefits.”
“Extreme weather events, rising energy costs and continued changes to harvests and crops have meaningfully impacted prices and affordability — some consumers have already made switches out of necessity and more are likely to follow,” added Elliot Morris, EY Canada Grocery and Consumer Packaged Goods Leader. “Consumer products companies can’t ignore the large percentages of Canadians who are changing their lifestyles and consumption habits in response to climate change and affordability concerns.”
Some key findings from the survey include:
- Over half of consumers plan to buy less, with 38 per cent indicating it’s to help the environment;
- 30 per cent of Canadians have changed dietary habits due to rising prices or limited food availability;
- Baby boomer generation more likely than Gen Z to recycle and bring reusable bags to the store;
- Fashion accessories (60 per cent) topped the list of product categories consumers plan to spend less on followed by toys and gadgets (52 per cent) and clothing, footwear, beauty and cosmetics (48 per cent);
- Nearly one-third of Canadians have had to change the food they eat because climate change has pushed up prices or limited the availability of products. This is pushing consumers to think differently, with 32 per cent starting to consider buying products that can mitigate the effects of climate change;
- Seeking ways to stretch their budgets, 41 per cent of respondents plan to cook and entertain more often at home. This also means sacrificing takeout food, with 48 per cent now planning to order less — a 15 per cent jump from just over a year ago;
- 64 per cent of Canadians attribute their efforts to drive change to a personal concern for the fragility of the planet (up eight per cent from October 2022), there’s a clear generational divide when it comes to behaviours like using less plastic, recycling more or conserving water. Globally, 65 per cent of baby boomers bring reusable bags to the store compared with just 43 per cent of Gen Z, and 63 per cent of baby boomers recycle or reuse packaging after use, compared with 48 per cent of millennials;
- Younger generations in Canada are speaking with their wallets and double-checking company claims. One-quarter of Gen Z indicated that they are willing to pay for more sustainable goods and services compared with six per cent of baby boomers. And 32 per cent of Gen Z will check an organization’s sustainability policies online compared with seven per cent of baby boomers.
“People are more informed now about what sustainability means and have better access to information to assess whether a brand is living up to its promises,” said Morris. “Companies need to get ahead and respond now by creating new products or reformulating existing ones to make them healthier and more sustainable, so they can protect their profitability and the brand experience.
“Canada and Canadians face an affordability crisis. What I find striking about the results is that consumers are still committed to act and spend more sustainably. So typically in times of difficult economics you’ll find that consumers end up reverting back to lowest costs and of course that’s partially true today but there’s a persistent strain of people wanting to act and buy sustainably. That’s a meaningful change from what we would have seen in previous cycles, even five or 10 years ago.”
Morris said in the survey there’s a real bifurcation in behaviour. Older consumers are taking more personal action to change behaviour. That includes bringing reusable bags to the store or recycling. The younger generation is willing to pay a little bit more for sustainable goods and they’re checking on organizations’ sustainability policies.
“They’re effectively being able to harness the information available to them to be able to make better choices in how they consume. I think that’s the big difference we see between generations. But it also shows I think a fulsome view of how consumers generally are approaching sustainability today,” he said.
For retailers and consumer packaged goods, it’s important for them to understand who it is they’re trying to target and what’s important to them specifically.
“As we look at a time, again, of difficult affordability challenges, it is important to keep in mind that particularly the younger generation is deciding and switching between brands, deciding and switching between products, that information both on their business at corporate level and on an item level, are relevant to them. So it’s important to be able to continue to pursue some of those sustainability goals even in difficult economic times.”
Morris said people are buying less. There’s a meaningful moderation in how much people are willing to spend.
“Retailers and CPG’s who continue to balance a view of economic/profitability with sustainability over the long term are going to be winners. I think it’s important to recognize that there’s very different segments of consumers out there. Some of whom are going to be shopping for price and for a growing number of them they’re going to be balancing that with an increasing importance on sustainability,” he said.
“Over time, I think it’s important for CPG’s and retailers to remain committed to sustainability because consumers are going to continue to be committed to it.”
