Sustainability has advanced from being an optional extra to an essential component in new product development. It goes beyond simply adhering to environmental regulations, to reflect a bold commitment to ethically develop products that still deliver on key benefits like functionality, flavours, quality and taste, while minimising environmental impact.

47% of global companies ensure sustainability features and initiatives are incorporated in new product launches

^{Source: Euromonitor International’s Voice of the Industry 2024, fielded in February 2024 (n=579)}

Euromonitor International’s Innovation in Sustainability report explores innovative approaches in sustainability across five key supply chain stages – sourcing, manufacturing, packaging, logistics and retail. Here are three out of the five key takeaways from the report.

Sustainability is becoming a baseline for innovation

In the current market, businesses must innovate responsibly, meeting strict regulations and the growing demand for transparent, sustainable solutions with minimal environmental and social impact. To be truly impactful, sustainability must permeate all areas of the business, enhancing the symbiotic relationships within business units and the supply chain.

Critical roles lie with R&D and product development teams, which can use the life cycle assessment framework to re-engineer product development, optimising every supply chain step. Additionally, sustainability provides cost efficiencies through resource optimisation and waste reduction, facilitating further innovation to mitigate issues like supply chain disruptions and resource shortages.

Over 27,000 new fmcg products carrying at least one sustainability claim have been launched since 2023

^{Source: Euromonitor International’s Innovation Tracker}

Infusing sustainability into innovation allows businesses to meet evolving consumer expectations and position themselves as sustainability leaders. According to Euromonitor International’s 2024 Sustainability Survey, over 60% of consumers seek to impact the environment positively, a consistent trend since 2020. However, 40% cited high prices as a significant hurdle to sustainable purchasing.

Nowadays, consumers prefer a pragmatic approach to sustainable consumption, favouring affordable products with comparable benefits. It is crucial to link green attributes directly to the product’s core proposition, aligning with consumers’ needs and their preference for solutions that reflect their values.

Focusing on operational emissions reductions to address net zero commitments

Innovations in sustainable manufacturing are intrinsically tied to companies’ net zero commitments, shifting from mere carbon neutrality to genuine reductions in operational emissions.

Carbon reduction efforts often face scrutiny, due to scepticism surrounding the transparency and effectiveness of carbon offset projects. To counter this, brands are leveraging third party certified claims to showcase accountability.

Upcycled products, which repurpose excess materials and minimise waste, are gaining traction in premium fragrances and facial care. Simultaneously, zero waste certification – a guarantee of efficient waste diversion – is being promoted by pet food industry leaders like Mars, Nestlé Purina and Colgate-Palmolive Hill’s.

Retailers are key to streamline sustainable shopping

Retailers, as the crucial link between manufacturers and consumers, play a pivotal role in fostering sustainability across the supply chain. They can nurture sustainable practices by expanding their range of sustainable products, educating consumers and endorsing in-store green practices like recycling and bulk purchasing.

Although corporations universally acknowledge the importance of sustainability, they often struggle to communicate this effectively. Driven by the fear of public backlash, many have downplayed their sustainability efforts. The evolution of regulations against greenwashing highlights the need for substantial proof of sustainability achievements to earn consumer trust and loyalty.

As consumers increasingly expect sustainability as a standard, communication through packaging, online platforms and in-store efforts has been re-emerging over the 2024-2025 period. Retailers play a significant role in boosting consumer engagement and education in this area.