The population of conscientious consumers will continue to rise in 2015, largely due to millennial’s mounting purchasing power, estimated at $200B and climbing; this will drive and enable large-scale growth for sustainable, purpose-driven brands and the People-Planet-Profit market in the coming year.
Companies with genuine sustainable imperatives, like Patagonia, are taking advantage of this opportunity and growing quickly to share their stories and product value with a broader audience. To be successful in this rapidly growing market, sustainable companies need to strategically differentiate themselves and react to the following trends in 2015.
Acquisitions Fuel Growth
Not only are sustainable companies increasingly looking to mergers and acquisitions as growth strategies to increase market share, but global giants are also leveraging this approach to enter the sustainable market.
Recent examples include Seventh Generation’s acquisitions of bobble and Gamila, and Bain’s investment in Toms Shoes. The U.S. Department of Commerce estimates that the latter type of consolidation amounts to $400-$500B in sales annually in the US alone.
As sustainable-minded companies continue on this path, they need to carefully plan their M&A strategy to ensure their purpose stays intact while synergies of the merger(s) propel desired business growth.
Efficiency & Scale Prevail
Purpose-driven companies are growing rapidly along with the consumer desire for more sustainable products. Last year, global sales of products with sustainability claims on packaging rose 2x the rate of those without.
For companies that wish to keep up with this pace and meet the increasing consumer demand for innovative and sustainable products, process improvement and stabilization are becoming a more important part of their operations.
Investments in systems, data, and reporting will be leveraged at a larger scale in the coming year by purpose driven companies. This will allow efficiencies to be created for this amount of business scalability and enable employees to focus their efforts on continued innovation.
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