Gen Z ready to pay higher price for sustainable packaging - says McKinsey & Company's newly published report

Sustainability isn't fading away, it is evolving. With smart material choices and a data-driven strategy, aluminium and other circular materials can help the brand lead the pack, meeting consumer expectations while also saving the planet. And this is what McKinsey & Company's newly published report, titled 'Sustainability in packaging 2025: Inside the minds of global consumers,' highlights.

The report also revealed notable generational and socioeconomic differences in how consumers view sustainable packaging. The report stated that younger generations, especially Gen Z and millennials, are generally more willing to pay a premium for sustainable packaging.  This trend is particularly evident among higher-income groups. For instance, in Germany, 25 per cent of high-income Gen Z respondents said they would pay "a lot more" for sustainable packaging, compared to just 1 per cent of high-income Gen X respondents.

The survey, which collected responses from over 11,000 participants across 11 countries representing 66 per cent of global GDP, explored consumer preferences across various product categories, packaging materials, and sales channels. It also provided detailed insights by demographic factors such as income, location, gender, and age within each country.

Daniel Nordigården, Partner at McKinsey, added, "Our research shows that while younger and higher-income consumers are willing to pay premiums, there is no one-size-fits-all solution. Brand owners and packaging producers must take a data-driven and proactive approach to meet these nuanced and evolving demands."

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The top five key findings from the research highlighted –

• Price and quality continue to be the most influential factors in consumers' purchasing decisions, with price growing even more important in recent years. Environmental concerns, although present, rank significantly lower across most product categories; however, some European countries, notably France and Italy, place greater emphasis on environmental impact.
• Second, when it comes to packaging, food safety and shelf life remain the top priorities globally. Once again, environmental impact ranks much lower. And when talking about food safety and shelf life, the role of aluminium is highly significant. The green metal is favoured in the food industry due to its exceptional protective properties. It acts as a strong barrier against external elements like oxygen, light, moisture, and microorganisms, helping to maintain food freshness and quality. However, this doesn't suggest a declining concern for the environment; in fact, the proportion of consumers who consider it essential has remained steady. Instead, factors like value for money have become increasingly significant in purchasing decisions.
• Third, among sustainability attributes, recyclability stands out as the most important to consumers worldwide. While there is no firm consensus on the second-most important trait, various aspects of circularity, such as reusability and compostability, continue to rank well.
• Fourth, global consumers are not aligned in their views on which packaging materials are the most sustainable. While glass and paper are broadly perceived as eco-friendly across regions, perceptions vary on materials like polyethene terephthalate (PET). In countries with well-established deposit return systems and robust recycling infrastructure, PET bottles are seen as more sustainable than in regions lacking such systems.
• Fifth, despite environmental factors ranking lower than other purchasing priorities, a majority of consumers still report a willingness to pay more for sustainable packaging, indicating that sustainability continues to play a meaningful if evolving, role in shaping consumer behaviour.

David Feber, Senior Partner at McKinsey, said, "Consumers are increasingly conscious of the importance of sustainable packaging, yet they balance this with practical needs such as food safety, shelf life, and value."

The survey also revealed that consumers across all age groups overwhelmingly place the responsibility for sustainable packaging on brand owners and packaging manufacturers rather than on governments or individuals. This sentiment is particularly powerful in countries such as Mexico (44 per cent), India (40 per cent), France (37 per cent), and the UK (37 per cent). As a result, brand owners and packaging producers must carefully evaluate how to align with shifting consumer expectations.

Overall, the findings highlight the nuanced and evolving nature of consumer attitudes toward sustainability in packaging. Companies that proactively assess their product portfolios, focusing on speed-to-market, targeted marketing, cost competitiveness, and strategic collaboration across the value chain, will be best equipped to stay ahead in a rapidly changing landscape.

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