MJBizMag August 2021 - 48

Sustainable Market Share Index™: Price Premium
Business Under Fire
Sustainability-marketed products enjoyed a sizable price premium of
39%* over conventionally marketed products, and increased +5.3 pts since 2014
Sustainability Price Premium
10%
15%
20%
25%
30%
35%
40%
45%
50%
0%
5%
2014
*Weighted by $ Sustainable Sales of categories examined; analysis excluded store brand/private label
Source: 2020 Sustainable Market Share Index, New York University Stern Center for Sustainable Business
Sustainability-marketed products enjoy a price premium over conventionally marketed products. Between 2014 and 2018, that premium grew 5.3% to
reach nearly 39.5%.
Will Consumers Buy
Sustainable Products?
A
growing number of cannabis
operators are willing to pay extra
for equipment and measures to
reduce their carbon footprints, such as
installing LED lights and using recycled
and/or recyclable packaging. But do
consumers want sustainable products?
And-perhaps more importantly-will
they pay extra for them?
Adopting sustainable principles in most
other industries creates higher operating
costs that are passed on to the consumer.
That can also happen in cannabis when,
for example, cultivators switch to LED
lights and other energy-saving equipment.
There haven't been any studies specifically
looking at whether consumers will
pay more for sustainably produced cannabis.
However, some brands that advertise
themselves as sustainable are among the
top sellers in their markets, such as Flow
Kana and Raw Garden in California.
According to international professional
services company Ernst & Young, 30% of
48 MJBizMagazine | August 2021
U.S. consumers spend more on products
they consider sustainable or better for
the environment.
Consumer Studies
Additionally, the 2020 Sustainable Market
Share Index published by the New York
University Stern Center for Sustainable
Business said mainstream branded
products that are sustainability-marketed
enjoy a 39.5% price premium compared to
conventionally marketed branded items.
The NYU study also said sustainabilitymarketed
products were responsible
for more than half the growth in
consumer packaged goods (CPGs)
from 2015 to 2019. And sustainabilitymarketed
products grew 7.1 times faster
than products not marketed as sustainable
during the same period.
" Our analysis demonstrates that
sustainability-marketed products
enjoy a hefty premium, continue to
grow faster than their conventional
counterparts and contribute over half
of the growth to overall CPG. It's clear
that brand managers who are not
pursuing sustainability strategies will
be increasingly left behind, " said Randi
Kronthal-Sacco, a senior scholar at NYU
who led the research initiative.
Consumers identified as urban,
upper-income, millennials and/or
college-educated are more likely to
buy sustainability-marketed products,
according to the study. In addition,
middle-income earners, baby boomers
and Gen Xers contribute a significant
percentage of sustainable-product sales.
Per capita, the top five states for
purchases of sustainability-marketed
products are Connecticut, Maine,
Massachusetts, New Hampshire and
Vermont. All of these markets have
legalized adult-use marijuana, except for
New Hampshire, which has a state-legal
medical cannabis market.
- Omar Sacirbey
2018
39.46%
34.21%
+ 5.3%
Sustainability-Marketed Products' Price Premium
vs. Conventionally-Marketed Products

MJBizMag August 2021

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