June 16, 2024

You’re the Boss: Why Sales of Green Products Are Down

Sustainable Profits

Last week, The New York Times published an intriguing article — “As Consumers Cut Spending, ‘Green’ Products Lose Allure” — about a major decline in the sales of green products. The article makes a point I have long believed: the average consumer will not pay more for a product just because it’s green, especially during a recession.

What I found most interesting about the article is that independent brands such as Method and Seventh Generation have been less affected by the drop in sales seen during the recession, while more traditional companies like Clorox have seen their green offerings decline sharply or be pulled from shelves all together.

The difference here is that Method and Seventh Generation appeal to “dark green” consumers — those who support eco-friendly products at almost all costs. This consumer group has long shown its willingness to pay a premium for a green product. The problem is that this segment constitutes a tiny percentage of the market. On the other hand, Clorox GreenWorks products are targeted more to “light green” consumers — those who want to be more responsible in their purchasing but will not or cannot pay more.

Consumer behavior toward green products offers a challenge as well as an opportunity. By creating an environmentally and socially responsible product that is effective and competitively priced, a company can steal customers from both sides of the equation. Light green consumers can be won over if they know they can buy a green product without paying more. And dark green consumers are also likely to switch if they know they can buy a good product for less money — even the most committed environmentalists also like to save money.

TerraCycle has tried to accomplish this very tactic with our own cleaner and fertilizer lines. Both are certified non-toxic and biodegradable, and they are packaged in reused plastic bottles. Most important, both are priced competitively with traditional cleaners. Our challenge has been to educate the consumer on the items’ efficacy and to overcome the perception that green products are less effective and more expensive — without the benefits of a massive marketing campaign that would drive up our costs.

What do you think? Are you surprised that consumers are spending less on green products? What will it take for green products to really go mainstream?

Tom Szaky is the chief executive of TerraCycle, which is based in Trenton, N.J.

Article source: http://feeds.nytimes.com/click.phdo?i=27505e2867e1ff643768834038a040c1

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