The New York Times has an interesting article on the front page this morning: “As Consumers Cut Spending, ‘Green’ Products Lose Allure.” The article notes that sales of a number of environmentally friendly products such as Clorox’s Green Works have fallen sharply.
The article presents the results of a study done by Sanford C. Bernstein looking at sales of green products across 22 different product categories. The results are astonishing; green products now have less than a 2% market share and are declining. This includes green niche brands and green versions of traditional brands. Perhaps the most interesting finding: green products have never had more than a 2.5% market share.
This raises an interesting question: how can this be? Isn’t everyone concerned about the environment?
I think the answer is easy: perceptions. People believe that green products are less effective and more expensive. Which would clean better, a regular toilet cleaner or an environmentally friendly toilet cleaner? For most people, that would be a pretty simple question: the regular version.
Of course I’m not certain this is true; I have absolutely no data. But to make a green product, you presumably have to remove the toxic chemicals, the ones that really work well. Green matters, but efficacy matters more.
I predict that things won’t get better for green products anytime soon.
One reason: the entire green movement took a hit with the launch of the new phosphate free dishwasher detergents. New government regulations recently forced manufacturers to remove phosphates. The result is a rather shocking decline in cleaning quality; the move is very noticeable and it reinforces the perception that environmentally friendly products just don’t work very well.
The saddest part of all this, and the green movement products in general, in my view, is lack of credibility. What kind of genuine reproducible comparative tests and their detailed results are given to the consumer from which to make an informed decision. NONE that I have found. Have you seen any?
“Green” has been used effectively as a target sales stimulus, and well meaning people flock to do their part believing, buying, and overpaying . Just one example: “Our product contains surfactants derived from plants”….Well, sodium lauryl sulfate, an efficacious surfactant used for years in major shampoos, dish soaps…etc. is derived from coconuts and is royally panned by the green soap “manufacturers”. Yet these same “leading” green soap makers glibly advertise that their product contains instead, safe, sodium coco sulfate…. which is nothing more than a “smoke screen” name of a diluted/less pure version of the same ingredient. Isn’t it amazing, that they get away with this , and other equally dubious green claims?
Not really. What do we expect from our current ethic that let’s banks, with “credit default swaps” and “derivatives” destroy our economy with impunity? Before you fall for the green pitch, do some Goggling. Look for Gov’t data bases, the CDC, The US National Library of Medicine, MSDS(material safety data sheets), NIH (National Institute of Health). Unfortunately, not many want to spend the time and effort….15 minutes?
Those that do, however will be rewarded by not being duped by environmental sales pitches, overpaying for “Green” but often inferior performing products and following the politically correct dazed herds of the uninformed, glued to their favorite reality shows, Impact Wrestling and the cerebral antics of the Kardashians!
We cannot continue with the current trends of using so many chemicals in all our products. Let’s not lose sight of why we must Go Green and I mean yesterday! Our living environment will become so toxic our planet will not be able to sustain us! I hope we are not to late now?
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Others have already made this point, but I’ll repeat it so you can turn this into a survey. I’m not inclined to buy green or natural products so long as these terms don’t have any definition. They can be nothing more than marketing terms.
What has changed is sophistication and skepticism. Ten years ago if you introduced a plant based bottle everyone would go “yes, GREEN!” Today they go “OK, how much cropland, fertilizer, diesel fuel, water resources, etc. were required to grow the plant, and is it really that much better than sucking a half pound of crude oil up from the ground”. As marketers we generate some of that skepticism because we define green for ourselves, unlike more serious claims that are objective.
While I agree that price certainly plays a role, especially during a recession, I think that there is a big insight that is being overlooked. Credibility. Yes, the NYT article clearly articulates that the green cleaning market has taken a hit of late. But it also mentions that Method and Seventh Generation are gaining. Why is that? Is it because they are cheaper? No. It is because they are more credible, better positioned brands. More than a mere “positioning,” these brands have a clear philosophy and a growing number of people are attracted to that. It isn’t enough to just slap an “eco-friendly” badge on a product. It has to be believable or it becomes easy for consumers to make the tradeoff. As people become more engaged with brands and have more information coming at them from numerous sources, authenticity, transparency and credibility are going to continue to grow in importance. It ain’t over yet!!
Interesting piece Prof Calkins. I recently left a position as VP of Marketing for an entrepreneurial nonprofit that sells carbon offsets to a wide variety of companies; with the “profits” from the sales of the offsets, the nonprofit invested in new sources of renewable energy, installed solar panels on schools and did long term watershed work. Over the 4 years I was with the organization I saw the dramatic rise and fall of “green” in the US. In 2007 and 2008 when the economy was humming along, “green” was cool– all sorts of celebs espoused the benefits of various eco lifestyle choices. Companies were eager to buy offsets, revise the contents of their products to make them more sustainable (even if that meant they had to charge slightly higher prices) and put “green” claims on packaging. However, sometime in late 2009, consumers really started to worry about the economy and their pocketbooks. I agree with Marta that price was the initial factor that drove the nail into the coffin of “green.” However, now that the economy is starting to pick back up again, I think people are staying away from “green” due to price and efficacy concerns.
Regarding Mak’s comment above, have you read anything by Prof Robert Cialdini? He has done interesting research on the impact of peer pressure on “green” choices– fascinating.
I wholeheartedly agree that perceptions are at the center of one’s purchasing behavior.
On further thought however, I wonder of a world where people’s perception of us was based on our ‘green’ purchasing preferences.
If somehow purchasing ‘green’ was considered COOL, would the improved perception of us make up for the ‘utility value’ deficit?
If our preference for purchasing green products could somehow be made visible, would it add to the perceived value beyond the ‘utility’ of that product?
What if your credit card statement says – 10% of the purchases by other ‘platinum’ card holders were green products versus 2% of yours? Would that somehow influence your behavior?
Good post on environmentally friendly products. It is shocking to know that green products never had more than 2.5% share.
I think you are right that people’s perceptions drive this market, and I dissagree with the previous poster in that people simply opt for the cheapest solution. I think people opt for the lowest price but only because they assume that the lowest price product will do the job. Once they find that the lowest price product doesn’t do the job (or doesn’t do it well), they will try something else at a higher price.
The same is true for green products. They might try it once under the presumption that it does the job as well as the others. However if they find that the product does not perform as well, then their loyalty to the environment will take a back seat to their own convenience and the value they get from having a dishwashing detergent that they know will get dishes clean.
Marta—Certainly price is a big factor. When green products are priced higher many people are reluctant to buy. I think this is particularly true with products where there could be efficacy questions such as cleaning products. Selling a product with a higher price and lower efficacy perceptions is very hard indeed.
I agree with you when “People believe that green products are more expensive.” But, I disagree with “People believe green product are less efficient”. I think people care more about the price. If the green product would have a lower price I believe people would buy them. The problem is that for companies to create green products is more expensive and not profitable, because people prefer to buy the cheapest product (does not matter if it is more or less efficient). I think that a huge percentage of people looking for a dishwasher detergent will buy the cheapest one, no the best one.