What: Sustainable health & beauty products face adoption barriers due to high prices and accessibility issues, particularly among younger consumers.

Why it is important: As younger generations drive demand for sustainable products but struggle with affordability, retailers must adapt their approaches to capture this key demographic or risk losing market share.

The sustainable health & beauty market faces significant challenges in balancing environmental consciousness with affordability and accessibility. Despite growing interest, particularly among younger consumers, high prices remain a major barrier to adoption. A striking 83.4% of Gen Z and 81.8% of millennials express willingness to buy more sustainable health & beauty products if they were cheaper, highlighting the price sensitivity in this demographic.

Retailers are responding to this challenge in various ways. Some, like Sainsbury's, are focusing on developing their own-brand ranges to offer more affordable sustainable options. Others, such as Selfridges, are revamping their beauty halls to emphasize sustainability through refill stations and eco-friendly practices.

The accessibility of sustainable brands has improved, with products now available in health & beauty specialists and supermarkets. However, refillable beauty products remain less accessible, despite 62.2% of UK consumers expressing interest in using refill centres.

The recent demise of The Body Shop serves as a cautionary tale, emphasising that sustainability alone is not enough to ensure success. Retailers must innovate to provide sustainable options that are both affordable and convenient to capture the growing eco-conscious market, especially among younger consumers.

IADS Notes: The challenges facing sustainable health & beauty products reflect broader trends in the retail industry. Recent studies show that even wealthier consumers are reluctant to pay premiums for sustainable products, with only 45% of those with household incomes above $100,000 willing to pay 10% more for sustainable items. This price sensitivity is particularly acute among younger generations, who show high interest in sustainability but often lack the financial means to support it. Retailers are experimenting with different strategies to address this issue. For instance, Liberty is focusing on the growth potential of its own-label beauty products, which could lead to standalone stores and international expansion. Selfridges has adopted a playful approach to circular retail, aiming to make sustainable shopping more engaging and accessible. The situation also highlights a generational divide in sustainability approaches. While environmental concerns have risen across all demographics in the U.S., Gen Z feels particularly uncertain about how to contribute effectively to sustainability efforts. This uncertainty, coupled with financial constraints, presents both a challenge and an opportunity for retailers to educate and engage younger consumers with affordable, sustainable options.

UK consumers are unwilling to pay the premium for sustainable health & beauty