Consumers will pay more for sustainably produced ingredients despite COVID-19 crisis

Despite the financial crisis brought by COVID-19, most consumers will pay more for food and beverage products that contain sustainably produced ingredients, according to latest research done by Palsgaard in June 2020.
The leading producer of emulsifier surveyed over 600 people in 4 countries which include the US, UK, Singapore and Mexico. It found that COVID-19 pandemic has increased the importance they place on price, but this does not however affect their focus on environmental issues.
Three quarters (75%) of respondents believed that food companies have a lot of responsibility for protecting the environment, with 23?lieving they have little responsibility. More than 9 in ten (92%) said it was important that the ingredients in the products they buy are produced sustainably, with 49% saying it was very important.
Meanwhile, 82% said they would be willing to pay more for a food product containing sustainably produced ingredients. Nearly half (46%) would pay over 5% more and 17% would pay over 10% more.
Environmental issues were found to be of particular concern to younger consumers. For 18-24 year-olds, climate change was the ethical issue food companies should take most seriously.
The research also provides new insights into the effects of COVID-19 on food purchasing decisions. Over half (55%) of consumers said the price of products had become a more important factor since the pandemic, while 42% said it had made no change and only 3% said it had become less important. However, this does not appear to have detracted from the focus on sustainability. In fact, 41% of respondents said environmental concerns had become more important since the pandemic, with 55% saying there had been no change and only 4% saying they had become less important.
Palsgaard also asked consumers how they thought their purchasing behaviours would change post-pandemic. Four in ten (40%) expected their households to buy groceries online more often, compared to 12% who said they would do so less often. Almost half (47%) also said they expected to eat out less often. The same proportion (47%) said they expected to spend more on products for home cooking and baking. Millennial consumers (those aged 25-34) were the most likely to increase their spending on home cooking and baking products (57%). Fifty-four per cent of consumers in Generation Z (those aged 18-24) said the same.
Sustainability is a key concern for Palsgaard, which in 2018 became the first emulsifier producer to achieve CO2 neutral production at all its sites. Palsgaard is owned by the Schou Foundation and has a sales turnover exceeding US$208 million. Its products are sold to more than 120 countries.