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HOME • MANAGE SUBSCRIPTIONS • MEDIA KIT
Rising Prices Mask Shifts In Green Shopping
by Sarah Mahoney, Tuesday, March 10, 2009, 1:16 PM

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Green Buyers As the economy continues to worsen, following the trajectory of environmentally friendly products turns out to be as tricky as tracking the stock market. But the recession isn't scaring all micro-segments out of the organics aisle, according to a new report from Information Resources Inc.

While it is true that some of the most dedicated green shoppers are cutting back on purchases, new groups are stepping up their environmentally conscious buying, says Sue Viamari, editor of IRI's "Sustainability: CPG Marketing in a Green World." "It's key for marketers to understand the different level of appetites various segments have for green purchases."

IRI partnered with TNS for its data, and while it divides consumers into eight shades of green, the report focuses on the three most enthusiastic groups:

First are Eco-Centric consumers, who are by far the most educated, affluent, and committed. They are more than willing to pay a premium for green products, she says. With an average age of 45 and about 77% Caucasian, she says some 33% of this dedicated group lives in households where income tops $100,000.

On the face of it, it's these diehards that are cutting back, with unit sales falling 6.6% in 2008. But because these shoppers have "mostly saturated their grocery baskets with sustainable products and as the economy weakened but prices rose, these people kept their spending constant, dollar sales stayed flat for this group last year," she says. "They're not spending less. They're just getting less."

By contrast, a group that IRI dubs Respectful Stewards is also willing to pay a premium for products that address a specific environmental concern--despite a much lower income level. (Some 38% live in households with less than $35,000 in earnings.) Yet their craving for green goods jumped sharply last year: Dollar spending in key categories grew by 15.5%, while unit sales gained 3.9%. (In this group, 86% identify themselves as Hispanic, with an average age of 41.7)

On the other hand, the third group, called Proud Traditionalists, will not pay more for environmentally friendly goods. In fact, they're looking for green buys that save them money. The most solid middle-income segment, some 52% of this group has a household income between $35,000 and $100,000. About 94% describe themselves as Caucasian, and they're also the oldest of all the segments, with an average age of 48.6. For this group, dollar sales increased 8.4%, while unit sales gained 0.9%.

Increasingly, private-label products are the game-changer across all segments, says Viamari. Safeway's private label currently commands 25% of the market, with Target also a key player. The largest categories for generics: Milk, bottled water, mouthwash, dog food and yogurt.

She says marketers may also be underestimating just how committed many types of shoppers are to products that help reduce packaging: "Industry wide, unit sales of liquid detergent fell 5.4%, while sales of concentrate (including both 2X and 3X) jumped about 400% last year. We're seeing the trend continue to beverages, and expect to see a big growth in drink mixes, as consumers look to save money and help the environment that way, as well."




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