AOCS 2012 SUSTAINABILITY SURVEY RESULTS

AOCS 2012 SUSTAINABILITY SURVEY RESULTS A Different Angle (Part 4)

INTRODUCTION This white paper marks the culmination of a 12-month piece of research into understanding perceived consumer views on green products. In total, 418 industry experts participated in the study from all over the world, making this one of the most significant studies of its kind. Over the course of 2011-12, the Fabric & Household Care team at DuPont has conducted a series of sustainability surveys at exhibitions and conferences across the world, including CESIO (Europe), SEPAWA (Europe), AOSDAC (Asia) and now AOCS (North America). At these events, we asked industry experts what they believe current consumer attitudes are towards green products. We have, previously, reported on European and Asian consumer perspectives and, following research conducted at AOCS in April 2012, we can now present the North American view alongside this. The European results presented are the consolidated findings from the CESIO and SEPAWA events, whilst results for Asia have been obtained from AOSDAC. 121 NORTH AMERICA 76 ASIA 418 TOTAL RESPONDENTS 221 EUROPE The consumer is at the heart of everything we do, and we are committed to delivering market-driven solutions for the detergent industry and beyond. As such, we have created this report to shed light on how consumers worldwide view green products. EIGHT Key findings The biggest barrier to consumers purchasing green products was thought to be the perception of higher cost, followed by a low awareness or understanding and the perception of reduced quality. Those perceived to be the most concerned with the green label being a marketing gimmick were Asian consumers. The top three criteria that make detergents green for consumers across all regions were believed to be natural ingredients, shorter cycles and lower temperatures. North America is the region least confident that consumers view product sustainability as important when making a purchase. The trend to purchase green products was most pronounced with food, detergents and appliances. It was felt that European consumers were more inclined to purchase green products in the area of personal hygiene rather than appliances. Consumers across the world thought products labeled green lived up to their claims, respondents told us. Opinion was split on whether consumers understood that phosphate-free detergents were better for the environment than those containing phosphates. To find out more about our research into household sustainability, please visit: www.genencor.com/hsi

1. How highly do you believe consumers and/or households rank green issues when making purchase decisions? Very highly 32.9% Quite highly 37.5% 17.5% 6.5% 51.2% 52% Not very highly 43.3% 40% 15.9% Not highly at all 1.7% 1.5% 0% The majority of respondents from Asia (51.2%) and Europe (52%) felt that consumers in their regions ranked green issues quite highly when making product purchase decisions. This would suggest that a product s green credentials could influence purchase decisions even if it wasn t the main decision driver. In fact, Asian respondents were the most confident overall that green was part of the purchase agenda for consumers, with 32.9% believing Asian consumers considered green issues very highly in their decision making process. North American responses were more varied. The majority of respondents in this region felt that green considerations were not very highly ranked in product purchase decisions (43.3%). However, almost three times the number of respondents from North America felt that consumers ranked green issues very highly (17.5%) compared with their European counterparts (6.5%). Overall, these results would suggest that industry experts believe Asian consumers are most concerned about green issues when making product purchase decisions, North American experts were the least certain about how influential green issues are on purchase decisions, and European experts felt that a product s environmentally-friendly credentials could influence decisions but was not the main factor.

2. In which areas do you feel that the trend towards purchasing green products is most pronounced? (RESPONDENTS COULD CHOOSE Up to TWO answers.) Building (insulation, glazing etc.) 8.4% 13.1% 15.4% Personal hygiene 12.8% 13.6% 21% Clothing 3.4% 3% 2% Food 23.1% 25.1% 32.5% Detergents 24.4% 27.1% 28.2% Appliances/electrics 10.7% 17.1% 19.1% 0% 5% 10% 15% 20% 25% 30% 35% Next, we asked respondents in which product areas they felt the trend to purchase green products was most pronounced in their respective regions. Asian and North American respondents shared the closest view, selecting the same top three answers in the same order: detergents (28.2 and 27.1%), food (23.1 and 25.1%) and appliances (17.1 and 19.1%). European respondents appeared to have a different perspective on consumer views, selecting food (32.5%) as their most preferred answer, followed by detergents (24.4%) and personal hygiene (21%). These respondents placed more emphasis on food and personal hygiene products at the expense of appliances and building products, when compared with Asian and North American respondents. The biggest outtake from this question was that industry experts from Asia and North America had a surprisingly similar perspective on consumer views. However, we also felt that all three regions may have placed greater emphasis on detergents due to the nature of their work.

3. How confident are you that consumers feel products labeled green on the market live up to their environmental claims? 50.5% Generally confident 52.6% 61.7% Very confident 10.5% 5% 4.2% Not very confident 30.3% 39% 33.3% Don t know Not at all confident 1.3% 5.3% 0% 0% 5.5% 0.8% Responses for whether consumers felt that products labeled green lived up to their market claims were fairly consistent across all regions. Asian respondents were marginally the most confident that consumers in their region believed green product claims, with 63.1% selecting very confident or generally confident. European respondents appeared to be the most skeptical of the three regions, with 44.5% of industry experts selecting either not very confident or not at all confident. North American responses appeared to engender the biggest consensus, with 61.7% choosing generally confident for their response. Overall, responses led us to believe that consumers around the world were generally confident about green product claims. However, there is still a degree of skepticism that hangs over these products.

4. Which green issues do you think consumers find most important when considering/purchasing detergents? (Respondents could choose up to THREE answers.) Less pollution 5.7% 7.9% 10.8% Locally produced 1% 2% 3.6% Natural ingredients 25.2% 30.6% 29.6% Less packaging 11.9% 12.8% 14.5% Shorter cycles 18.7% 20.4% 30.5% Lower temperature 22.5% 25.2% 26.9% 0% 5% 10% 15% 20% 25% 30% 35% The purpose of this question was to investigate whether consumers from particular regions had different ideas about what made a detergent green. In fact, it revealed a large degree of global consensus, as Asian, European and North American respondents selected the same three product attributes as most important. European and North American respondents believed that consumers viewed green detergents as those that used natural ingredients (30.6 and 29.6%), worked at lower temperatures (26.9 and 25.2%) and in shorter cycles (18.7 and 20.4%). By comparison, Asian respondents felt that consumers placed the most emphasis on shorter cycles (30.5%), followed by natural ingredients (25.2%) and the ability to wash at lower temperatures (22.5%), to describe a detergent as being green. The green attributes that respondents felt were least influential when making purchase decisions in all regions were local production, followed by less pollution when produced and finally less product packaging.

5. Do you believe that consumers understand that phosphate-free detergents are better for the environment than those with phosphates? Yes 47.5% Don t know 48.7% 12.9% 3.9% 11% 49.1% 41.5% No 47.4% 37.9% Responses to this penultimate question revealed that opinions on this issue were significantly divided across all regions. Just under half of respondents from all three regions felt that yes, consumers did understand the environmental proposition of phosphate-free detergents. However, this was equally matched by those respondents who were either unsure or didn t believe consumers understood the environmental credentials of phosphatefree detergents. North American respondents were the most unsure about the consumer understanding of phosphate-free detergents (12.9%), followed by Europeans (11%). These results would suggest that there is still some work to do in educating consumers on the environmental benefits of phosphate-free detergents, or that the industry doesn t really know whether this message has landed or not.

6. What do you believe to be the biggest barriers to consumers purchasing more green products? Not enough products on the market 8.4% 1.3% 15.4% Lack of affinity/loyalty towards green brands 1.9% 1.4% 5.5% Lack of interest in green issues 4.9% 4.5% 7% Perception that the green label is a marketing gimmick 13% 13% 18.9% Perception of reduced quality/performance 13.6% 15.4% 21% Perception of higher cost 27.3% 32.7% 44.2% Low awareness/ understanding 16.3% 21.4% 22.4% 0% 10% 20% 30% 40% 50% The final question asked industry experts what barriers they felt were preventing consumers from purchasing more green products. All regions selected the same top four responses perception of higher cost, perception of reduced quality or performance, low awareness or understanding of green products and perception that the green label is a marketing gimmick however, a very different emphasis was placed on each of these in the respective regions. The perception that green products had a higher cost attached to them was the primary barrier selected by respondents in all three regions. In North America, this was by far the most selected response with 44.2%, followed by Europe (32.7%) and Asia (27.3%). North American and Asian respondents shared the view 21.4% and 22.4% respectively that low awareness or understanding was the second biggest barrier to the uptake of more green products. Whereas European respondents felt that a perceived reduction in product quality or performance (21%) was the second biggest barrier. In contrast, the third biggest perceived barrier for consumers was different in all three regions. Asians felt it was the perception that the green label was a marketing gimmick (18.9%), Europeans felt it was low awareness or understanding of green products (16.3%), and North American respondents were of the opinion it was a perceived reduction in product quality (13.6%).

Cesio, 8th World Surfactant and Business Convention, Vienna, Austria 6th-8th June 2011 This conference, organized by Cesio, the European Surfactants Association, offered experts in the field of surfactants the chance to air their views on the state and direction of the industry. Under the theme of Sustainability of the surfactant industry in a highly regulated world, the congress covered aspects affecting the entire value chain. Scientific, economic and technical issues, applications, market trends, safety and regulatory frameworks were all subjects up for discussion. SEPAWA, 58th Congress and European Detergents Conference, Fulda, Germany 12th-14th October 2011 SEPAWA is one of the largest expert associations in Europe, with more than 1,300 members. Four regional groups, three specialized groups (Professional Cleaning, Legislative-Environment-Consumer and Applied Cosmetics), the German Society of Perfumers within SEPAWA and five international sections are designed to encourage an interdisciplinary exchange of knowledge and experience. The different groups organized lectures, excursions and conferences. AOSDAC, 8th Asia Oceania Soap and Detergent Association Conference, Beijing, China 9th-11th November 2011 This 3-day conference and the accompanying exhibition gathered key players from Asia and Oceania, exploring the development and future direction of the cleaning industry from an Asian and Oceanic perspective. With the theme of Green Cleaning Solution of the Household, the organizer and participants presented and discussed the opportunities and challenges the industry faces. Fabric & Household Care was a major sponsor of this event. AOCS, 103rd AOCS Annual Meeting and Expo Long Beach, California, USA 29TH APRIL-2ND MAY 2012 For over 100 years, the American Oil Chemists Society has promoted the cause of industry members and encouraged global collaboration in the areas of fats, oils, detergents, surfactants and related materials. This year s event attracted over 1,500 attendees, representing 49 countries. In conclusion Overall, results were more closely aligned in all three regions than we had anticipated. It transpired that some questions provoked similar responses globally. These were most notable when respondents were asked whether regional consumers felt green products lived up to their environmental claims and whether they understood that phosphate-free detergents were kinder on the environment. Over half of the respondents from each region felt that consumers were generally confident that products lived up to their green claims, and there was a split response from all regions regarding consumer understanding of phosphate-free detergents. The most surprising trend was that Asian and North American consumers were believed to have similar attitudes towards the product areas in which they were most likely to buy green products. Both felt that detergents, followed by food and appliances, were the areas in which the trend to purchase green products was most pronounced. European respondents, in contrast, felt consumers were more likely to buy green products in the area of personal hygiene. The findings from the first question were surprising, as it was perceived that Asian consumers ranked sustainability credentials much higher (32.9% very highly) in their purchase consideration than their European (6.5% very highly) or North American (17.5% very highly) counterparts. With regard to the attributes that made a product green, results revealed the same top three answers for all regions. Natural ingredients, shorter cycles and lower temperature washes were selected but placed in a different order by the three regions. In the final question, regarding barriers to the uptake of more green products, all shared the belief that the perception of higher cost was the primary barrier, although views differed by region on the remaining top two factors. As intended, our research set out to investigate perceived consumer views on sustainable products in order to offer valuable insight for the detergents industry and beyond. We have revealed some interesting regional differences and similarities, providing even more food for thought on the topic. We hope our work will spur further studies to help the industry drive innovation and meet consumer demand. If you have any questions about the methodology or content of this report, please do not hesitate to get in contact with us at fabricandhouseholdcare@dupont.com