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06.18.2008

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The Green Bottom Line: This Time It’s Personal

If 20 years ago, Procter & Gamble had reduced the size of its iconic Tide brand liquid detergent, consumers would have felt cheated: “Why am I paying the same price for a smaller quantity?” In today’s sustainability-heightened marketplace, while the average consumer is still unlikely to equate a smaller package with “lowered carbon footprint,” the chances are exponentially greater that they’ve been exposed to all the elements behind such designations. Media and promotional messaging are now commonplace teaching consumers that green cues like reduced package size and ingredient concentration are moves that are “eco-friendly” and instruct an underlying symbolic logic related to “less plastic, less space on shelves, less cost to manufacture and distribute.” In short, the product’s carbon footprint is reduced. And when massive retailer Wal-Mart says it will only stock compact detergents going forward, it is not clever PR, it is being corporately responsible (though it may still be clever marketing).

While being green is good for business, it is also a strategic imperative. Sustainability is something every corporation, regardless of size, must do to compete and when a company the size and scale of a Wal-Mart makes a sustainability move, competitors and consumers alike pay heed.

Sustainability as a competitive advantage is more than a market leader imposing its will on the marketplace; it’s also about unleashing innovation as a strategic weapon. Toyota has rendered Detroit’s Big Three auto markers mere specks in its rearview mirror thanks in no small part to its innovative, eco-friendly Prius.

So, with prices at the gas pumps and grocery store shelves soaring, sustainability marketing seems to be getting much more personal, if not more determined. Not that green marketing went away. As we all know too well, environmental marketing has been with us for quite some time now. Many of us may be feeling a bit fatigued by it all, but the current economic climate only emphasizes the simple fact that sustainability issues are going to be with us for a long, long, long time. To compete and be successful, we need to understand consumers’ everyday green purchase criteria.

Commerce and Sustainable Values Can Co-exist

Very often, the objectives of consumers have nothing to with corporate agendas. Think of it as two trains traveling on parallel tracks in today’s sustainability-motivated marketplace. On one track, we have the corporate train driven by notions of a triple bottom line (economic, environmental and social). These concerns have historically been the purview of a company’s “environmental” or corporate social responsibility office (CSR), and we are now seeing this office elevated to executive level status.

On the other track there is the consumer train powered by a triple bottom line of a different sort with concerns about themselves, their families and their communities. The most pragmatic way to look at these concerns from a sustainability angle is to say that green purchases are subsumed beneath the mantle of everyday purchase criteria (value, quality and aesthetics).

TRIPLE BOTTOM LINE

Corporations vs. Consumers

One of the important insights we’ve gleaned from our two decades of sustainability research is that green attitudes do not necessarily translate into green behavior. This applies equally to consumers and corporations. For the majority of everyday shoppers “buying environmentally friendly” is not top of mind; it is not a primary purchase factor. So, when Wal-Mart calls on its suppliers to evolve (e.g., reduce package size) toward a more sustainable future, it’s likely that the only common ground between shoppers and companies will transpire at the product level where we see something like a bottle of laundry detergent reduced in size and an end consumer standing there thinking, “Hmmm, is this less detergent or what’s going on here?” The average consumer will not necessarily equate or consider the environmental implications of reduced package size with Wal-Mart’s efforts (or those of P&G), unless they have a heightened interest in sustainability itself, which is a small minority of consumers at this point.

Currently, products and services that share a common track between consumers and corporate CSR efforts have to meet their own triple bottom line of consumer needs that include practical objectives (health, wellness, costs, functionality, aesthetics, protection from pollution, etc.) as well as broader concerns about far-reaching concepts like global warming or the cultural results of “over consumption.” Compact fluorescent light bulbs are but one example of this: if priced low enough, they meet dual needs of both saving money and having an environmental impact. At the same time, they still aren’t perfect; it turns out they’re hard to recycle or don’t pass the test of aesthetics and efficacy in the home since they take some time to warm up, can flicker, have a different kind of incandescence and don’t necessarily fit standard lamp shades. Green Works by Clorox is an interesting example of a brand that might potentially meet the consumer triple bottom line since it has a profile that “fits” with the consumer expectations about price, purity and efficacy. A bottle of Green Works natural bathroom cleaner is reasonably priced at Wal-Mart, has a very short and unadulterated ingredient profile, and appears to be efficacious in the home. That’s a pretty good profile of a product meeting consumer needs, and this clearly gives Clorox the ability to connect to them at a higher marketing level along the lines of CSR.

The Bottom Line: Looking From the Body Outward

For sustainable practices to take root, eventually consumers have to get on board in a big way. We see again and again that companies believe the way that the media portrays sustainability is the same way consumers think about sustainability and this just isn’t true. Companies have to understand the point at which “their” consumers are on the adoption pathway as relates to sustainability behaviors. In both our Hartman Report on Sustainability 2007, and in our upcoming The Many Faces of Organic 2008 report, we find that consumers portray living in both the worlds of “sustainability” and “organics” in terms of personal or self, home, family and day-to-day living before they extend out into consideration of their communities and finally the world.

The Body-World Continuum

As the above chart depicts, consumers typically evolve toward very active “sustainable” lifestyles along a Body-World Continuum. If there is a common ground between corporate and consumer bottom lines it would be in communicating what aspects of the corporate bottom line are most relevant to where consumers are on the path toward greater involvement in sustainability behaviors. Consumers and companies are on the same sustainability pathway, for example, when a consumer attempts to do good in their community through volunteering while the company makes a concerted effort to invest in the same community.

The bottom line on the big sustainability picture is that consumers are intrinsically preoccupied with matters of personal and family health and wellness; these in turn represent absolute gateways to sustainability. As a long-term cultural motivation, wellness is what takes sustainability out of the fad category. American consumers are changing what they care about. Health and wellness connection points are changing the way people live and are likely to lead them to more and more sustainable products in the future.

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In, On, Around – In a Green Way

Clorox, through its acquisition of Brita, Burt’s Bees and the creation of Green Works, clearly has its eye on the Body-World Continuum. Through acquisition and innovation, Clorox addresses consumer concerns and needs to control what’s happening “in their bodies” (Brita), “on their bodies” (Burt’s Bees) and “around their bodies” (Green Works).

Based on Hartman Group research, entire categories of products fit within the umbrella of the Body-World Continuum: Organic Foods (“in the body”); Natural Personal Care (“on the body”) and Natural Household Care (“around the body”).

Green Buying in Tough Times:

In an economic downturn, is being “green” a deciding factor to purchase?

All things being equal or similar (including price), if in comparing two products one has an additional benefit of recycled content/pure ingredients/energy saving features, then it is more likely that such benefits will influence a purchase.

When compact fluorescent light bulbs (CFL) became competitively priced to other light bulbs, everyday consumers were able to make a comparison between filament bulbs and the energy saving characteristics and long lifespan of CFL bulbs.