Austin, Texas — About half of the consumers in the United States are willing to pay for sustainable packaging, according to research conducted by consulting firm McKinsey & Co., but that number drops when a recession hits.
"It's a very recession-sensitive element of packaging," said David Feber, a senior partner who leads the global packaging service with the consulting firm. "Paying for sustainability goes away fast when it comes to a recession."
A total of 42 percent of respondents participating in a McKinsey packaging survey indicated they are willing to pay "a little more" for sustainable packaging, while 9 percent said they are willing to pay "a lot more." But the total percentage of people willing to pay for sustainability drops by 19 percent when a recession hits and money gets tighter, Feber said.
He presented consumer inclinations in 11 countries at The Packaging Conference, recently held in Austin.
China had the largest percentage of people willing to pay more for sustainability at a total of 80 percent, including 59 percent willing to pay a little more and 21 percent willing to pay a lot more. A recession drops the total number by 12 percent.
France, meanwhile, had the lowest percentage of respondents willing to pay more for sustainable packaging, with a total of 42 percent, including 37 percent willing to pay a little more and 5 percent willing to pay a lot more. Recessionary times ding the total by 15 percent.
McKinsey data shows there is a group of people — anywhere between 4 and 8 percent — willing to pay 10 percent or more for sustainable packaging. "The good news," Feber said, is "those consumers are out there. You just have to find them, but they are there.
"They are always there," he said.
On the flip side, there is a similar-sized group of consumers — 5-9 percent, depending on the country — who are not willing to pay anything extra for sustainable packaging. The rest fall somewhere in between.
The majority of consumers, regardless of the country, see either brand owners or packaging producers as being the most responsible for "driving sustainability in packaging," McKinsey reports.
Just 9 percent of consumers in the United States believe they have the most responsibility to drive sustainability. That's 10 percent lower than the high mark of 19 percent of consumers in Japan who feel the same way. In Great Britain and Italy, just 6 percent of consumers see themselves as having the most responsibility.
"Elements of sustainability have been a key issue for a long time, but it has hit a tipping point," Feber said. "We are seeing real change. Capital markets are rewarding companies for it. CEOs have it on their agenda. Boards are asking about it, and regulators are regulating it. And so this is our new world.
"It has more than finally hit a tipping point. I think we all know that. It wasn't that long ago that I was standing on this stage where I convinced a number of you that sustainability was here to stay," he said.
Another megatrend in packaging, Feber said, is the continued growth of electronic commerce for packaged goods, a trend aided by the pandemic.
As more and more products are being shipped directly to consumers, packaging design has experienced what Feber called "a big implication," with substrates shifting to flexible from rigid and glass to plastic. Packaging designers also are becoming more creative to serve this portion of the market.
A third megatrend involves the challenges of operating in a time of economic downturn, labor shortages and inflation.
"Inflation is still up, labor is still challenging, and costs are up," Feber said. "Volumes have been soft in may of the segments. So we've been operating in a pretty challenging environment, and that's not going to go away anytime soon."
The packaging industry, overall, has been what Feber termed a laggard when it comes to embracing digital technologies. But he sees the packaging industry embracing digital opportunities in the future, including artificial intelligence.