The Next Green Marketing Revolution

The green marketing revolution on the past several years was haphazard at best, characterized by rapid growth and tentative consumer endorsement. It is not surprising that it ran out of steam in 2008 and 2009 during the onset of the global financial crisis. Every company under the sun was attempting to come out with a new green product to show their concern for the environment. Major brands such as Clorox and Arm & Hammer created significant new green products that with their reach, distribution and marketing dollars brought in new green consumers who might not have ever purchased a sustainable product before.

This was not the first green marketing revolution that failed. There was a brief frenzy around Earth Day in 1990, with companies offering products that were everything from ozone-friendly to recyclable and biodegradable. Some of the claims were weak at best, if not outright deceptive, leading to the development of the term “greenwashing.”

The green explosion of the past several years should not be seen in the same light. In some ways it was a victim of its own success. Sales of Clorox Green Works topped $100 million in 2008, but fell to $60 million the next year as consumer priorities shifted and price sensitive buyers looked for less expensive alternatives. This about face in consumer behavior forced companies such as Arm & Hammer to stop selling altogether their Essentials cleaning line in the US market.

Brands that had built up greater consumer loyalty such a Seventh Generation have faired better. Seventh Generation has been producing sustainable products since the 1980s, but also sells to a consumer that is used to paying more for sustainable products and is less likely to shift their purchasing behavior because of a downturn in the economy.

Over the past several years some companies such as Walmart and GE, with its ecomagination campaign, have built their green marketing campaigns around a long-term strategy for the company. Not coincidentally these companies launched their campaigns in 2005 before the consumer frenzy started in 2006. Corporations that were responding simply to the increased consumer demand likely produced one-off products in order to get something to market as quickly as possible. This was always frought with peril as it exposed them to inconsistent messaging (one product is green, one is not) and it was likely also only partially green (e.g., organic cotton, but unsustainable dyes on the fabric).

The next wave of green products from major marketers will be characterized by a more comprehensive approach to sustainability and will likely have the following characteristics:

  1. Industry Appropriate Approach to Sustainability: Levi’s no longer markets its Levi’s Eco line which used organic cotton. Instead it is focusing its sustainability efforts around the Better Cotton Initiative, which looks at water use, labor and environmental issues. Consumers will no longer be faced with the question of buying a sustainable and non-sustainable Levi’s product. Everything will be made according to their best efforts, as Levi’s defines them. More and more industries will seek to find what is the most sustainable strategy for their sector.
  2. Transparent Greening Initiatives: Nike has built its sustainability efforts around Considered Design. Under the program Nike raises the bar each year, with more and more of its shoes and clothing attaining the Considered standard.  While Nike does not go to the effort of making let’s say a perfectly compostable shoe that consumers can buy, it does create a sustainable approach to lowering its carbon footprint each year. Whether the economy is up or down next year doesn’t matter. It’s sales might be effected, but not its competitive strategy. This is similar in approach to what GE did with its ecomagination campaign. GE set numeric goals for reduction in energy use company wide. The big difference in the strategies is theat GE completely rebranded itself, while Nike doesn’t really talk much about its greening efforts, instead focusing on producing high performance athletic equipment.
  3. Own vs. Third-Party Certification: Third-party certification standards can be costly and hamper a major consumer producer’s flexibility and nimbleness in the market place. Starbucks has eschewed the Fair Trade certification standard in part because there just isn’t enough Fair Trade coffee for its needs. Its also costly. Instead it has developed its own ethical sourcing guidelines, which the company says are similar in standard to other third-party verification criteria. To be effective, a company’s private certification program should still stick closely to what are generally agreed upon sustainability guidelines, as Starbucks has down.

 

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