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Green products are flooding the North American market; even the notoriously green-averse US consumers are becoming eco-centric. More than half of US consumers say they would pay more for a product if they knew it was better for the environment, according to a national poll conducted in April 2010 by ad agency Venables Bell & Partners.

Rather than this being a passing trend, it appears that the turn to green is about an awareness of depleting resources and an altered awareness about the planet we live in.

Key trends

  • What is green?
  • The “green” brand;
  • Fairweather green?

Commercial opportunities

  • Since being green is about a change in values, promote such values as health, family, sustainability, and more generally ‘the good life’;
  • There is much scope for exploiting green awareness and possibly feelings of guilt among consumers. However, consumers are becoming aware of “greenwashing”, so only label your product as “green” if it really has green credentials;
  • For green credentials, get a third party to accredit them;
  • Explain to your consumers, why the product is “green”.

Background

The green-factor with products cannot be denied. Green products have successfully made the jump from being for “hippies” and “tree-huggers” to being mainstream and even cool. Sales in the US product market, if one includes green products as well as those promoting personal health or benefiting the environment are expected to grow dramatically.

Particularly since green spending did not suffer as much as expected in the recession. A 2009 Cone Consumer Environmental Survey indicated that 44% of Americans have not changed their environmental buying habits as a result of the economy. However, figures vary strongly depending on the market researcher.

While all researchers indicate a strong growth in the market, overall spending in the green marketplace is tough to measure because there are so many products and so many terms that fit the description. Although this is leading to some confusion among consumers about what green really is, it does not put them off buying eagerly.

What is green?

There is no clear definition of what criteria a green product needs to meet. Labels not only specify that a product may be “green”, but also “eco”, “organic” and “natural”. Ed Stafford, a Utah State University business professor who specializes in green marketing commented: “Even environmentalists conflict with one another about what is truly a green product.”

No wonder then that many consumers say they don’t know how to verify whether a company really is green. Some companies are capitalising on the lack of criteria, the green hype and the willingness of consumers to pay extra for the products – they are leading consumers to believe that their products are green, while they are not.

Misleading claims are so rampant, there is actually a term for it: “greenwashing”. Eco-friendly non-profit organisations such as Green Seal are seeing consumers increasingly turning to them as independent third parties for more information on whether products and services are really as green as they claim. For the green “techy” consumer, there are also a number of iPhone apps that assist consumers.

The app GoodGuide for example allows consumers to scan the barcode of products, allowing the consumer to immediately attain ratings on health, environment and social responsibility.

The “green” brand

Seeing that no-one really knows what green is, why then is the market booming? It seems that the market is booming because no-one can define “green”; “green” has become a brand of its own. It is not only associated with environmentally-friendly products and services, but a range of other things such as locally-sourced, fair trade, healthy, sustainable, nostalgic, and generally socially responsible.

There is a wealth of companies in Canada that describe themselves as “green”, even have the word in their company name. There is Green Zebra, which is dedicated to sustainable living, Baby Green Sprout, a shop specialising in organic products – clothes and nappies – for kids, Green Cricket, which specialises in natural personal care products, Greenprint Events, a company specialising in low-carbon emission events and many more.

The term “green” has seemingly penetrated all consumption areas and is changing consumer demands everywhere. For example, a February 2010 survey by the Hotel Association of Canada found that 44% of leisure travellers and 42% of business travellers placed it as a priority whether a hotel had “green initiatives” – whatever that may mean. It seems that the brand “green” can in fact turn things into gold.

A survey undertaken by TerraChoice (an environmental research company) in the framework of the EcoMarkets Summary Report from September 2009, offers some answers as to why “green” is such a popular brand. Asked which environmental issues are most important to them participants of the survey ranked human health on top. This seems to indicate that consumers do not primarily buy eco-friendly products because of the “green” environment per se, but because they believe these products will have a positive impact on their health.

Top Ten Environmental Issues in North America in 2009
On a scale of 1-10

Source: EcoMarkets Summary Report by TerraChoice Environmental Marketing Inc.Note: The scale is 1-6 where 1 is least important and 6 is most important.

Fairweather green?

Consumers, although seemingly embracing “green” are still selective about the level of “greenness”. Consumers seem to be happy to be green when it comes to cleaning products, personal care, and food. But when it comes to the bigger picture, houses, cars, planes, consumers are reluctant to commit.

For example, store shelves are filling up with green personal care goods, as celebrities cooperate in the branding of facial creams, shampoos, toothpaste, eye shadow and blush brushes. As natural and organic food has become more popular, entire supermarkets such as Whole Foods in the US and Wal-Mart Canada have announced their green missions.

When it comes to cars, US consumers in particular have not been so convinced. Car manufacturers and analysts have been saying for years that eco-friendly cars will become hugely popular, but US consumers continued to buy their gas-guzzling trucks.

But, the shock of the financial crisis is possibly changing attitudes, highlighting the attractions of small cars and less oil-dependency. Indeed, a Gallup poll from early 2010 found that 57% of Americans would consider buying a hybrid when they next purchase a car. The top two vendors of hybrids in the US, Toyota and Ford, each reported strong gains in hybrid sales in March 2010 year-on-year. Ford reported hybrid sales were up a huge 69.3% from March 2009.

It remains to be seen whether Americans are really willing to give up their big cars in favour of a green alternative. Comments on the website Autoweek may be capturing the real sentiment of the American consumers: “I think this ‘green’ nonsense is just an invitation to have more government intervention in our lives (not that there isn’t too much of that already!).”

Another one commented: “Green is just another fad, overplayed like safety, security, and privacy”. One might add, however, that young Americans are growing up to be more environmentally aware than their parents. According to sustainability firm BSDglobal, “In the US, children and teens are generally more concerned than adults about the environment, and are more knowledgeable about green alternatives. Increasingly, they influence their parents’ purchasing decisions.

Equally importantly, millions of them will reach adulthood in the next decade, and gain purchasing power of their own.”

Outlook

Green spending will most likely grow. A September 2009 survey undertaken by Ecomarkets revealed that the vast majority of North American purchasers (83%) predict greener purchasing in the next two years. In a sense, “being green” means the aspiration for a “good life” in which values such as the, health, environment, family and happiness once more take centre-stage.

Such values are substituting more traditional values of cost-efficiency, success and survival of the fittest. So far, North Americans have embraced the move to green when it comes to groceries, but they have in the past found it more difficult to make larger commitments, although new surveys indicate all is set for green becoming the new dream.

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