The world’s consumer is changing. We eat less meat, drive electric cars, visit gyms, use ocean-friendly suncreams and re-use carrier bags and coffee cups.
These trends are unlikely to be just fads. Environmental and social issues championed by millennials and Generation Z – teens and early 20s – will become ever more mainstream as these generations take an increasing share of the consuming population.
If governments tap into these trends – from meat taxes to plastic-bottle deposits – all consumers will be impacted and business must adapt.
HSBC’s global consumer surveys show some evidence that younger generations are more willing to be more socially and environmentally concerned. This year’s UK survey suggests 18-to-24 year olds worry more than others about their health and are more willing to actively choose goods and services produced by companies branded as sustainable or responsible.
The young are shown to be reducing alcohol consumption, smoking less and exercising more. They are willing to give both money and time to good causes.
Most respondents to our US luxury-goods survey, especially the young, said they will spend more on sustainable – organic, antibiotic-free, fair-trade, cruelty-free – products.
Price can deter younger consumers from switching to more socially-responsible products, but over coming decades they are likely to move into higher income brackets. In the US, the number of millennials – 23 to 38 – will this year overtake the baby-boomers – 55 to 77.
Our latest UK consumer survey found growing uptake for electric cars, although from a low base. Nevertheless, we expect consumers to increasingly adopt these vehicles as governments and companies become more engaged with climate change and the environment.
Some 53 per cent of UK consumers claimed the amount of plastic packaging affects their purchasing decisions: 84 per cent say they now re-use plastic bags. Again, 18 to 34 year olds are most concerned.
Governments have taken advantage of this willingness to address plastic pollution with 34 countries now restricting single-use carrier bags. Plastic-bottle deposit schemes, bottling taxes and packaging penalties for manufacturers are also being considered.
The UK survey also found that 39 per cent of consumers would consider avoiding genetically-modified products – up from 28 per cent in November 2017. And over two-thirds say they would pay extra for meat raised under higher welfare standards: only 22 per cent of 18 to 35s would pay no premium, compared to 38 per cent of the over 55s.
The trend for ‘fast fashion’ has been popular for decades. However awareness of the fashion industry’s strain on natural resources is growing. The industry contributes an estimated 10 per cent of global greenhouse-gas emissions – more than aviation and shipping combined.
Younger consumers are showing some evidence of demanding action against this; willing the industry to act on both the environmental – pollution, water use and emissions – and broader issues such as labour rights and diversity. Mainstream companies are responding with sustainability-related initiatives in their supply chains.
Sustainability is not yet a mass-market trend – the demand for ‘fast fashion’ remains strong – but as Generation Z takes a larger share of consumer demand, the industry may be forced to think seriously about branding, supply chains and operations. Like other industries, fashion needs to adapt.
Disclosure and disclaimerMore, collapsed
The following analyst(s), economist(s), or strategist(s) who is(are) primarily responsible for this report, including any analyst(s) whose name(s) appear(s) as author of an individual section or sections of the report and any analyst(s) named as the covering analyst(s) of a subsidiary company in a sum-of-the-parts valuation certifies(y) that the opinion(s) on the subject security(ies) or issuer(s), any views or forecasts expressed in the section(s) of which such individual(s) is(are) named as author(s), and any other views or forecasts expressed herein, including any views expressed on the back page of the research report, accurately reflect their personal view(s) and that no part of their compensation was, is or will be directly or indirectly related to the specific recommendation(s) or views contained in this research report: Lucy Acton
Equities: Stock ratings and basis for financial analysis
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