Forget Innovation - Green Products Drive 70% of New Product Growth

A recent Boston Consulting Group (BCG) research report showed responsible products accounted for two-thirds of grocery product growth in 2013. That’s a pretty incredible number considering how grocery brands have been struggling. 

The number that has been getting the press in recent years has been the growth in private label to 18% of grocery sales – but with 96% penetration, growth should slow. And while we have been worrying about the impact of private label on the bottom line, high margin Responsible Products have grown to a surprising 15% of grocery sales! This is not news for top tier natural brands, but may be a hidden opportunity for conventional brands.

Large CPG companies have the advantage of extensive distribution and highly experienced sales and marketing teams, which should make success in this category easier to obtain. But, as consumers get more savvy about certifications and are exposed to more information on how products are grown, conventional brands can trip up and consign their brand to nasty internet memes rather quickly. 

The fact that CPG companies apparently are not quite doing green products right is evident from the figures. Specialty manufacturers of natural products have enjoyed a blistering 12.5% growth on average, while big CPG brands that have launched green products have seen growth of less than 2%.

While the BCG report doesn’t cover product positioning in depth, my guess would be that brand equity is on the side of the Specialty brands. We know that most consumers purchase natural products alongside conventional, with a substantial amount of the population only buying organic or socially responsible in selected categories (meat, dairy, etc.). 

For a conventional brand with strong equity, the best move might be in creating a separate brand where the natural brand benefits from marketing, sales and distribution power, but is not burdened with a legacy brand image. Clearly this is a winning strategy as evidenced by the success of Green Works by Clorox. Conversely, a major brand can buy a natural company, as Clorox again, did with Burt’s Bees. 

In the first case, with Green Works, deep green consumers shied away from a brand clearly developed for the mass market. With Burt’s Bees, Clorox again saw a drop in deep green consumers, despite no change in the product, again shying away from mass market display. The lesson learned is, don’t target the deep green consumer if your company manufactures conventional products. You won’t benefit from your distribution strength and will risk public outcry (besides it makes you look really stupid in the eyes of the deep green consumer.)

With the high growth rates for natural products, it’s likely we’ll see large and small brands jumping on the bandwagon, with varying degrees of success. Tread quickly, but tread lightly is the tagline for success in this growth category.

2 comments about "Forget Innovation - Green Products Drive 70% of New Product Growth".
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  1. Jacquie Ottman from, August 6, 2014 at 10 a.m.

    Because authenticity is key to successful marketing of greener products in marketplace, there's only two routes to growth: grow your own or acquire those that were.

  2. Bob Gordon from The Auto Channel, August 6, 2014 at 10:51 a.m.

    Talk about the profit in Green. Domestically produced ethanol was the fuel of choice for the first 20 years of modern motoring here in the USA until the invention and ownership of poison leaded fuel (Ethyl) by GM, Standard Oil and Dow Chemical in 1921, as well as the inclusion of ethanol production in Big Oil's boondoggle, prohibition.

    For more than 15 years the two guys from Brooklyn who founded The Auto Channel have been screaming for the replacement of gasoline by green and domestic ethanol (see: ), which will bring two obvious benefits to every country that has the smarts and independence to mandate an end to Big Oils 100 year old monopoly.
    The replacement of petroleum based mobility fuel would end the financial and military support of countries that hate us and our way of life, by keeping "fill-up" money here and multiplying in our economy, creating an economic BOOM like never before.

    The reduced cost of a fill up for American drivers will allow them to have the money to spend on American goods and services, by not sending it to the Worlds Big Oil monopoly.

    These benefits can quickly accrue once a serious and sustained effort is instituted to use ubiquitously produced, domestic ethanol, which will allow it to be profitably retailed for around 30% of the cost of a gallon of gasoline, re-purposing our motorists "fill up" spending to explode our economy.
    So whats the problem?...

    After 100 years of 10 billion dollars a year U.S. subsidies and their free military protection of raw materials (both in money and more importantly in lives), Big Oil and their minions will not give up their monopoly without a fight, They have and continue to count on bought and paid for traitorous politicians and stupid mainstream media that continue to exist because of Big Oil's's time to get pissed off Americans don't you think?... we do!

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