Those who can, pay more

December 2009

Fair trade coffee, energy saving technology, clothing not made by children: shopping is now often not only a matter of meeting daily needs. Alongside choosing the right brand, the question of price and the highest quality, consumers also make decisions that determine whether the contents of their shopping basket deserve to be labeled “sustainable” and “ethical”. Germans have an open-minded attitude to products bearing these labels; however, this does not automatically mean that they are willing to dig deeper in their pockets to buy them.

As a rule, it can be said that almost all Germans are open to products which, alongside their actual purpose, also fulfill ethical requirements. This is shown in a study conducted by GfK-Nürnberg e.V. (The GfK Association). In addition, few have a problem with the fact that companies advertise the additional benefit of their products and also strengthen their image in the process. A large majority of advertisements in Germany highlight product attributes such as “environmentally friendly”, “no child labor” and “locally produced”. Across the board, acceptance of these and other labels symbolizing the extra dedication of the company is high. However, not everyone is able or willing to pay more for this.

Higher prices for ethical, social and ecological additional benefits are not automatically accepted. Instead, consumers weigh up who will actually benefit from the financial support of their purchases. Child protection is top of the list for otherwise price-sensitive Germans. Around 40% of respondents would potentially be willing to pay more for products advertising the fact that they are produced without using child labor. The purchase of energy saving appliances is second on the list, with approximately a third of respondents willing to spend a little more on these products. It is extremely attractive for consumers to not only do something good for the environment, but also to profit from it themselves. However, consumers react more reservedly to product advertising that only highlights energy saving manufacture. Here, a comparatively low 18% of consumers would accept a higher price. Acceptance of the “environmentally friendly” label, as can be found on cleaning and washing products, is somewhere between these two extremes. A quarter of Germans are prepared to pay more for this.

Acceptance of higher prices: regional beats global

The proximity of supported projects also plays a part in the decision for or against higher prices. While one in four people deems regional community involvement a good thing and crucially would also support it, this willingness decreases to 16% for global projects. Regional attachment is also important in production. Almost a quarter of respondents would be prepared to spend more on products made in Germany. This figure is even higher for the “locally produced” stamp, with nearly 30% of consumers willing to accept higher prices for this.

Opinion is divided on the labels “organic”, “GM-free”, “no animal testing” and “fair trade”. Although a quarter of Germans are prepared to pay more for this form of corporate commitment, some are more skeptical. Approximately 10% of those questioned do not even believe the promises made by manufacturers, and 13% actually think that the “organic” label is entirely unnecessary.

Commitment depends on wallet size

Acceptance or rejection of the increased price is not only determined by the individual’s attitude, but more commonly by their bank balance. Affluent consumers are more able, and therefore more willing to pay extra for social action. Almost half of higher earners would spend more for child protection, and a third would do the same for fair trade products. In comparison, among households with a strained financial situation, only 33% can imagine paying more for child protection despite their low income. The gap is even greater with fair trade products, as only 13% of respondents with money worries would dig deeper into their pockets for these. The personal financial situation of an individual is also a factor affecting whether he or she chooses organic or environmentally friendly products. One in three affluent people would be prepared to pay extra for these, but among those who need to watch their spending, the figure halves to 16%.

“Actions speak louder than words,” Erich Kästner wrote in his novel Fabian. For many consumers in Germany, this motto also applies to shopping, and quite a few are prepared to pay the price of “ethical consumption”. However, this is certainly an easier choice for those who do not need to tighten their own belts.

Data source: the GfK Association (Omnibus survey August/September 2009).

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