Prior to the recession almost 76% of Americans ranked themselves as 'light green' consumers. This meant they were inclined to buy green products though not necessarily fervent environmentalists. That number is now down to 60%. Most cite cost as the issue. Like most Americans, their family incomes are lower and so their purchasing habits are more frugal. Since green products are not infrequently more expensive than their competitors, that affects sales.
But many also cite less availability of green products. This may be a function of where they shop in order to save - upscale stores tend to carry more green. It may also be that merchants are stocking fewer green items because they have noticed the same developments.
The data do not suggest that this is a long term trend. The number of self-described committed, eg dark green, consumers has risen. And the factors consumers note in preference surveys - health and waste - remain core values for which green products are optimally positioned. Green companies are perceived to engage in ethical business practices, a characteristic that transcends economic cycles.
So while green purchasing has softened, the data suggest it will rebound with the economy. In the meantime, the experience of operating in a resource-constrained recessionary environment is providing producers with experience that may enable them to better manage costs and gain market share when the recovery begins. JL
SustainableBusiness.com reports:
The Green Revolution is turning out to be more of a Green Evolution, at least for now.
Before 2009, the number of green products on the market was rapidly increasing as was competition among industry players to be seen as "green" among an increasingly sophisticated public. It was close to hitting a critical mass, with 76% of Americans qualifying as "light green consumers"
- those who consistently seek out and buy some green products or services.
But people are generally purchasing fewer green products as a result of the recession, according to a survey, "The Green Evolution" by Grail Research.
That's not surprising news as 65% of respondents say they've changed their purchasing behavior because of the recession - most of them buy less overall, and those products they buy are less expensive ones. Since the biggest barrier to purchasing green products has always been the perceived higher price, it makes sense that green purchases go down when times are tough.
Another reason people say they don't buy green is "low availability" of products - they aren't as easily accessible as conventional products. That shows there's still interest and if more companies offered such products the price would come down and they'd be more widely available.
Tough times also means that "green" fades into the background as people focus on jobs and the economy. The current hyper-partisan atmosphere where action on climate change is taboo, environmental laws are under attack, and the intense negative spotlight on Solyndra and the solar industry is causing confusion regarding the importance of green and its attributes.
What does this mean for companies that have been greening their products, their manufacturing processes, their logistics, and their brands? Should you wait for the economy to improve and take a breath from all this greening?
We think not. First, businesses that invest in innovation during recessions tend to come out the other side stronger than competitors who don't invest. Second, greening operations brings numerous benefits to the bottom line in terms of savings from increased efficiency, reduced waste, less threat of liability because of chemical use, and long term branding.
If your company operates much more efficiently and saves significant money that way, can you afford to sell green products at lower prices? The answer could well be "yes."
Who is Buying Green?
People who are committed to buying green haven't changed their purchasing behavior at all since the recession began. In fact, the percentage of "Dark Green" consumers has risen slightly. People who choose green products for most of their purchases rose 1% in 2011 and now make up 9% of the American market.
It's not surprising that people who are less knowledgeable about and committed to purchasing green products would lose interest during hard times. Sure, the percentage of "light green" consumers - people who "sometimes" buy green - dropped from 76% to 60% between 2009-2011, but that still leaves a solid majority of Americans as "light green" - they will return to the green market as the economy improves.
This is especially true given that the profile of green purchasers is becoming less niche and more mainstream - it's not so easy anymore to say a particular age group or income level buys green. Although "deep green" purchasers still tend to be slightly more affluent and more educated, the difference is ever less pronounced.
What People Look for in a "Green" Products
People want to buy green products but they don't want to spend a lot of time figuring out which ones really are "green" and which ones aren't. They have a hard time differentiating between products and brands because so many claim green attributes, and only 11% say they actively research green attributes and brands.
They find green certifications hard to understand, but Energy Star is almost universally recognized (97%), followed by the USDA Organic foods label (71%). 34% recognize the Fair Trade label, but only 15% say they understand what LEED-certified means.
So, how do you reach people? Green messaging on packaging is highly visible and one of the key places people look for information.
Although 40% rely on word of mouth, product packaging is the most importance source of information.
What Kind of Green Information Do People Want?
People look for information that relates to their everyday lives, which is probably why most people associate green products with either recyclability and/or natural/organic ingredients.
A majority of people perceive a product as "green" if it's made with recycled materials, can be recycled, or the packaging is recycled. Other big categories are whether a product is energy efficient, biodegradable, and non-toxic.
Display Quantitative Information Visually: people are more likely to find green claims compelling if quantitative information is displayed visually to communicate environmental impact.
Keep Phrasing Specific: Purchasers prefer "Our product eliminates the amount of waste equal to 500 Olympic swimming pools a year" over "Our product eliminates 15% of the waste during manufacturing" or " Our product is manufactured with less waste."
What About Green Companies?
A strong majority of "dark green" purchasers (72%) make decisions based on a company's business practices, as do 28% of "light green" purchasers.
Interestingly, the most important criteria people use to determine a company's greenness are sustainable manufacturing processes and suppliers who also use those practices. People also say they buy from companies who are transparent about the risks and safety associated with their products.
Although less important, people prioritize companies that communicate about environmental issues and who get involved in social responsibility projects. People are impressed when a company speaks out on climate change or contributes to reforestation - and takes a stand.
And companies don't have to exclusively make green products to be perceived as green. It's more about whether a company clearly articulates its green attributes.
When asked which companies they think of as green, people choose: General Electric (13%), Seventh Generation (8%), Toyota (6%), Whole Foods (6%) and The Clorox Company (4%).
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