Stanford study finds consumers prioritize brand name over sustainability

A study from Stanford University, US, has found that beauty shoppers pay more attention to brand names than to sustainability claims. But, when buyers favor sustainability, they were shown to trust smaller cosmetic brands over large names due to greenwashing awareness. 

“It turns out that package size, ingredients, and brand name are much bigger drivers of purchases than sustainability,” says Kristina Brecko, an assistant professor of marketing at the University of Rochester. 

The study analyzed the sales data of over 30,000 personal care products sold between 2012 and 2019 from a variety of US retailers. The selection included deodorants, toothpaste, and shampoos.

The researchers chose the 2010’s time period to investigate how these beauty brands operated in the absence of current-day scrutiny. “Brands have made eco-friendly claims, often without substantiating them, only recently has increased government oversight begun to ripple through the sector,” they say.

One-third of the products researched had at least one environmental or social claim. Approximately 29% were labeled “cruelty-free,” and 14% were said to have eco-friendly packaging with low-waste or recyclable materials. 

Less than 3% claimed environmental sustainability, such as fair trade certification, and reduced greenhouse gas emissions.

The study found that small beauty brands often offer more sustainable products.Looking back in time

The Stanford researchers questioned a 2022 survey revealing that 78% of respondents said that a sustainable lifestyle is essential. The study authors say their results “tell another story.”

“We wanted to study how companies behave in the absence of regulation, and whether firms have an economic incentive to invest in marketing sustainable products,” says Yewon Kim, co-author of the study and an assistant professor of marketing at Stanford University.

The study also found that small beauty brands often offered a more extensive sustainable product range than large brands. 

“We observe that large manufacturers provide sustainable options through their smaller brands rather than adding them to their established brands. Based on consumer purchases alone, large brands with high brand equity have little incentive to incorporate these sustainability features,” says Kim. 

Cost incentive

The researchers suggest two reasons large brands may have less incentive to offer sustainable products.

First, adjusting existing products to align with sustainability claims may be more expensive and ineffective, as the established customer pool does not indicate concern about the certifications.

Second, large companies are more likely to be suspected of greenwashing, as they tend to make more false or misleading sustainability claims.Cost and greenwashing suspicion are two factors affecting large brands.

Therefore, acquiring or launching smaller brands with sustainable claims seems “more authentic.” The researchers say that sustainable products sold by small brands held 5% of the market share in 2012 and 20% of the market share in 2020. 

“There’s a higher preference for those brands that have fully sustainable product lines, and fringe brands offer these at a higher rate, which suggests that it is easier for them to do so because they have short product lines,” says Brecko.

Call for regulation

The researchers stress that demand alone is not the primary driver for sustainable practices and that increased regulation of personal care products in the US is needed.

Brecko says that the European Union has more control over sustainability claims, as companies need to provide proof of their claims and demonstrate how they reduce their environmental impact. 

“A recent regulation outlines that companies cannot use words that sound ‘green’ on their product packaging without providing evidence that the product meets sustainability standards,” says Brecko.

Recently, toxic chemicals have been found in various cosmetics, such as nail polish, lotions, and soaps. The researchers are calling for stronger regulations in the US.