Green envy: mainstreaming of responsible consumption means green products now out-perform in retail
Being green and practicing responsible consumption is officially mainstream, writes Bridget James, in this piece that analysis the sales performance in retail of green products versus conventional products.
Consumer and stakeholder values are evolving, spurred on by concerns about climate change and health hazards. Growth in product sales is being led by responsible brands, with Boston Consulting Group (BCG) research showing responsible products accounting for 70% of product growth.
The report’s authors write: “Any lack of involvement will be costly. Our research suggests that if A brands (major product brands) don’t come forward with credible offerings in this area, one-third of their existing consumers will switch to responsible consumption (RC) private labels or specialty brands.”
For companies waiting for the perfect time to implement a green marketing strategy… now is good.
BCG analysed 2013 sales data from most US retail chains, with some promising results for green brands. “In an otherwise stagnant market… responsible consumption represents a major area of profitable growth… RC products account for 15% of all sales in these chains but also sales have grown about 9% annually in the past three years – making up 70% of total growth.”
The survey also confirms that this trend is indicated to provide similar growth globally. In an additional study of more than 9000 consumers in nine developed countries, the results show that the new focus is on embracing the externalities of product quality and marketers need to realise that responsible production is just as important as price for green consumers.
Now, evidence of purchase trends in current and future markets, shows consumers are giving increased weighting to the product attributes of lasting quality, ethical and environmental production and positive brand image.
What’s driving the green growth?
The BCG report confirms that the increased importance of responsible consumption is the result of consumers’ increasing concerns around climate change, food safety scandals, and health hazards.
Customers have never said, ‘We’re fine with products whose production exploits labour and the environment, and while you’re at it throw in pollution and climate change as a result of a fossil-fuel reliant production process.’
Responsible production has been a latent attribute and now it is key. Consumers realise that if they deal with big brands, these will be the impacts. The consumer backlash has developed over time. The internet has provided the platform for relationship building and sharing of information, in this case, exposing the unattractive practices of the major brands – practices that consumers are voting against with their new responsible consumption product purchases.
Major brands have used developing countries for cheap labour and to avoid EPA penalties for polluting, adding further stress to these marginalised communities. Now rivers run blue, pink and orange in China, Brazil and Mexico where, “clothing gets its tint from harsh chemical dyes that are expensive to filter from waste water at textile plants,” and the use of chemical fertilisers and pesticides pollute the water, affecting communities downstream.
To name just one, The Citarum River in Indonesia has been called the world’s most polluted river. Around five million people rely on its flow for their water supply, while more than 500 factories line the banks, spewing waste into the water.
“The aim of any system should be for all stakeholders – stockholders, employees, customers, community and the environment – to benefit over the long term… It is poor management to purchase materials or service at the lowest price of to minimise the cost of manufacture if it is at the expense of the system.”
A challenge for major brands
Health and food concerns relate to the maintenance of minimum farming standards and chemical loads. Consumers are concerned with knowledge that animals are produced in factories, not on farms, as pictured in advertisements.
Consumers see major brands as the kind of conventional product to boycott. Manufacturers of conventional products have built a reputation in the old way of doing business and deceptive advertising, making consumers skeptical that they can be trusted.
However, major brands bring scales of economy in sourcing resources, manufacturing and regional distribution. These assets could be used to leverage strong positions with responsible consumption products. Retailers need to take care to understand category-specific consumer attitudes, evaluate offerings and make credible claims. “RC products with more stringent and validated claims have seen sales grow,” says the report
Consumers, enabled by information, are becoming the regulatory body of the market, and their new values are driving green growth globally. Ethical and environmental leadership by brands, represent increasingly important emotional product attributes for marketers. A lack of trust in major brands is driving growth away from conventional products.