Little Green Bag
What's the eco-conscious shopper carrying?
Maybe he's something of a cliché. Try as he might, he still can't peel that Gore-Lieberman sticker off the bumper of his Prius. There's probably granola from Whole Foods spilling out of the reusable canvas shopping bag in the back seat next to the book about bio-diesel. Just don't try to pigeonhole him, because he's as elusive as Bigfoot, or maybe, more aptly, the Jolly Green Giant. If there's one thing Janet Little, a nutritionist for Henry's Farmers Market, knows by now, it's that there's no such thing as a plain green shopper.
"The biggest group talking about organics, by far," says Little, who works for the Southern California chain of food stores, "is new moms. After that, there are people who have been touched by some kind of illness, either personally or through a family member - cancer, heart disease, diabetes, something major. They want to talk about pesticide residue."
Next, she says, are a group of gourmets, more food sophisticate than activist, eager to infuse foods with cutting-edge flavors. (Pomegranate-orange martini, anyone?) "And, of course, there are elderly people, who do want to eat more healthfully - but aren't as panicky as other shoppers. They say things like, 'Well, I've lived this long,'" she says. And finally, "there's the small but vocal group who are fair-trade shoppers," Little adds. "They don't just ask about pesticides, they want to know about a product's footprint, and whether the people who grew it are treated fairly."
And just as Little knows she can't reach each and every one of these people - technically all of them verdant consumers, but in varying shades - with one food lecture, smart marketers are also scurrying to thin-slice this growing market, looking for the product pitch most likely to resonate with consumer concerns.
The problem is, defining green gets trickier every day. The lifestyles of health and sustainability, or LOHAS, market, includes 16 percent of U.S. adults, or 35 million people, focused on "health, the environment, social justice, personal development and sustainable living." In terms of annual sales, it represents about $209 billion, reports the Natural Marketing Institute. The personal health category represents the biggest chunk - about $118 billion, including natural and organic products, nutritional products and dietary supplements. Other categories under the LOHAS umbrella include green building ($50 billion) and eco-tourism ($24.2 billion), as well as such relatively small segments as natural lifestyles, alternative transportation and alternative energy.
Organic products, on the other hand, have penetrated 59 percent of U.S. households in 2007, reports the Natural Marketing Institute. In 2006, the most recent year with available sales statistics, the Organic Trade Association reports that U.S. sales of organic food sales totaled nearly $17 billion, a 22 percent gain, and now account for 3 percent of all retail sales of food and beverages. In 2003, organic foods' share of total food sales added up to just 1.9 percent. When asked why buying organic is important, most shoppers will give such vague and unsubstantiated reasons as "It's better for me and my family" or say they do it to promote overall health. And the environment? For many consumers, it doesn't even rate a mention. And while the numbers of those organics devotees has increased a bit - from 16 percent in 2006 to 18 percent in 2007, according to NMI - so has the number that fall into the "reluctant" category, now 19 percent, from 18 percent in the prior year.
A Hazy Shade of Consumerism
Another way to look at these consumers, according to Forrester Research, is by shade: In a survey of 5,000 adults looking to buy electronics, it found 12 percent (25 million Americans) of the population to be "bright green," willing to spend more on environmentally friendly products. Another 41 percent (90 million Americans) are concerned about the environment, but aren't willing to pay more. And the remaining 47 percent just aren't worried about the environment at all; some researchers refer to them as "brown."
"There is no question that there is not just one green consumer," says Barbara E. Kahn, Ph.D., dean of the University of Miami's School of Business, and an expert on consumer decision-making. "Some people are motivated by health and safety issues - they're afraid of getting cancer from bad air or chemicals. Those people are very different from people who feel they get something from being involved, and [are] motivated by altruism. Some people almost seem to be motivated by revenge - they're vitriolic, and they want to punish people [who] are treating the earth badly."
Standard age segments are especially important, says Janet Eden-Harris, CEO of Umbria, a company that tracks social media. According to Umbria's research, Baby Boomers are more than willing to buy products that they think can enhance their health, so long as it isn't much more expensive than other options. For Gen X shoppers, it means products that "do the right thing" for the whole family. And for Gen Y, money is no object: They'll pay just about anything for organic goods, "which they think taste better, and are more sustainable," says Eden-Harris.
"It's not like it's rocket science," adds Kahn. "These are just the standard strategies of segmentation - age, income, urban vs. rural, blue collar vs. white collar." But marketers cannot afford to overlook the nuance of pinpointing the precise shade of green of consumers, while it's still one of the few available ways to differentiate products on issues important to a growing number of shoppers. "And in every category, the one who does it first still wins," she says.
As consumers reshape their thinking, that environmentally responsible consumer is a constantly moving target. Umbria spent a year studying 160,000 blogs that often mentioned sustainability. "Not only did we find that the kinds of conversations people were having about sustainability morphed, so did people's opinions," says Eden-Harris.
"First of all," she says, "there was a huge spike in the number of conversations about sustainability - it grew by 65 percent in 2007. At the beginning of the year, about 25 percent of the bloggers were uncertain about sustainability issues, and the next biggest group - at 22 percent - were what we called 'negaters,' who would write things like, 'I don't believe global warming exists, and you shouldn't either.'" By the end of the year, though, the number of "uncertains" dropped dramatically, from 25 percent to 9 percent, as they switched over to agreement, and many conversations moved from "agreement" to "activist."
These bloggers also change positions on brands. While three-quarters of Wal-Mart mentions were negative, Eden-Harris says, that shifted as the year ended, and more and more conversations focused on the positive impact of the retailer's CFL lightbulb initiative.
(Come on, you thought bloggers only wrote about sex scandals, Lindsay Lohan and the lumps in baseball players' hindquarters - not lightbulbs. But actually, Umbria found that about 74 percent of online conversations about sustainability focus on energy and fuel, as well as automotive issues, Eden-Harris says.)
Conversations and news coverage about global climate change are also having a big impact on consumers, says Wendy Gordon, founder of The Green Guide, which is about to launch a quarterly print edition under new owner National Geographic. Gordon says that back in the early 1990s, when she cofounded Mothers and Others for a Livable Planet with actress Meryl Streep, "Our theory was that people would act more on self-interest than altruism. So the focus was often on health and things like pesticides and antibiotics," she says. "And I don't think that's changed."
What has changed, she says, is that the idea of environment-related health hazards has broadened, as more and more people discuss global climate change. "Hurricanes, droughts, floods, tornadoes - the storm itself isn't a product of global warming, but the severity of it is. And as these problems have become more apparent in ordinary people's lives, it's awakened the American consumer. It's completely consistent - they're more concerned about the environment and how it impacts them, and their personal safety," Gordon says.
Ditto automotive conversations. "Sales of big cars went down as gas prices rose, and when gas prices came down, those big cars started to move again," she says. "We're very elastic - people are more price sensitive than environmentally sensitive."
Multinational corporations have been quick to swaddle themselves in green garland. In the dark ages of corporate responsibility, green meant little more than a dubious participation in recycling. In 1990, in a particularly egregious example of this, McDonald's began to affix the universal three-arrow cycle-symbol, indicating one can recycle the product, to its paperboard containers (which, incidentally, were not manufactured using post-consumer paper). McDonald's made one small mistake: Because of the promotional labels stuck on the packaging, the materials were not recyclable.
So, in the clash between ethical consumerism and increasing personal health and safety concerns, which marketers will win? Eden-Harris has a theory: "The marketers people talk about most are those who have a product they've made personal - convincing people that even as a single person, they could make a difference. And they made it visible. If people are going to pay extra for something because it's sustainable, they want it to make a statement." Still, as greenwashing becomes more and more common, finding a way to do that isn't easy.
"It's mind-boggling. You can't turn around without seeing a product making some kind of claim," says Perry Goldschein, founder of SRB Marketing, an e-marketing company in Denville, N.J., whose clients have included Ben & Jerry's, Working Assets and Pax World Funds. "Lots of them are B.S., and people know it. And that undermines credibility." (Indeed, it's become so common that Web sites exist just for consumers to pan their least favorite greenwashers.)
The eco-sumers, even informed ones, often fail to see the potential irony in this burgeoning cottage industry growing up around them - mainly that these eco-warrior starter kits are also creating a whole bunch of additional stuff in their homes. Things are not necessarily getting simpler and less cluttered. Often, so-called sustainable design builds upon the same old production models. Marketers put a smiling sun on the label and slap bio-something-or-other on the packaging and leave it at that. But people are gradually becoming more informed.
"It's really important for companies to understand that there's a big education component, as well as credibility issues," Goldschein adds. "Your product not only has to do what it says, you have to be able to prove it, and educate consumers about the issues - all in a world where the attention span is a fraction of a second."