Monday, 23 February 2009
Draft article for The Marketer
Shopping and Green
Shopping and green have become closely intertwined in the last few years. When asked to name a green brand, many think of a grocery brand; Ben & Jerry’s, innocent, Ecover, even ASDA. The retailers – Walmart, M&S and others – have taken a lead on offering environmentally considered choices. The shopping bag, green points and initiatives on carbon, packaging and animal welfare have added loyalty and retailer wide dimensions to the increased availability of greener and more sustainable products. M&S even recently announced it is making moves into green energy. Meanwhile the overall phenomenon of green consumerism has been buoyant, with the Co-op bank’s Ethical Consumerism report valuing the overall UK ethical market at £35.5 billion, showing 15% growth in 2007.
A recent survey by Gyro International found that 28% of UK consumers are “willing to pay a premium for environmentally friendly products and services”. Over half of respondents said their purchasing was influenced by green considerations, and this was higher in areas like food where retailing concentrates. The survey also found that the greenwash issue is still a major factor, with 50% declaring themselves untrusting of company claims that their products and services are environmentally friendly. Anecdotal evidence (from talking to industry insiders) does suggest that the ‘premium’ green categories, for instance fresh organic produce, have been negatively affected by the recession. But the Gyro survey found that a roughly equal number (30% vs 32%) said they were actually more likely to pay a premium given the current economic climate, rather than less likely.
The 28% figure for the UK is slightly disappointing. In mainland Europe the figure was almost double this at 55%. But it is clearly a substantial segment. And actually public understanding of buying ‘environmentally friendly’ is overdue an overhaul. Many recent successes have been much more specific and authentic than this general claim suggests. And the key opportunity going forward has to be getting people more aware of the true environmental impact of the simple everyday things which they buy. They may still choose to buy 'cheap', but at least they will know the impact.
As I covered in The Green Marketing Manifesto the key tactic for retail green marketing remains customer education. The famous debacle of Iceland (frozen foods) going all organic in 2001 was in retrospect a failure of education – so that people really just get left wondering why their peas where suddenly a bit pricey. Whereas the 2006 M&S ‘look behind the label’ campaign which explained the thinking behind such innovations, was reported by banking retail analysts (Citibank) as ‘the most successful marketing campaign in the company’s history’. More recently we have seen a revolution in attitudes to buying chicken. Following the Hugh Fearnley-Whittingstall documentaries, a survey by the RSPCA found that 75% of shoppers now consider animal welfare when buying chicken. This is more specific than generic ‘environmental friendly’ claims. And it shows the potential for empowered consumers to dictate to markets, with Sainsbury and others responding by offering only birds farmed to high objective standards. Fair Trade (Tate & Lyle) and Rainforest Alliance (PG Tips) have shown how these sorts of specific narratives can reinforce the value of mainstream brands.
The potential with an educative approach is to change the market. When people appreciate the benefits to the environment and to their own health of eating organic foods, then the ‘premium’ no longer seems like simply ‘paying extra’. It is a new common sense. And that’s because it is creating a separate cognitive category. In some senses you could describe this as a process of creating meta brands. The other day I chose organic wine, partly because I’d been reading about the damage to soil from the intensive alternatives in French wine production, partly because I’d heard (probably an urban myth) that it doesn’t give you a hangover, but mostly because of that classic dilemma which FMCG branding was invented to solve; an overwhelming choice, within which ‘the organic red’ gave me a way of short circuiting consideration and getting on with my life.
Where next for green retail? I suspect that ‘paying a premium’ may be missing a bigger sustainability problem that arises from the damage done by ‘cheap’. The problems with intensive farming across the board to the lowest possible prices may substantially outweigh the benefits from ‘ethical consumerism’. When there is a race to the bottom, principles get sacrificed for prices. The global food industry – as forthcoming WWF report will highlight - is at the forefront of environmental damage. One third of all net CO2 emissions are due to deforestation, largely to clear land to grow cheap soy, palm oil and other commodity crops. The loss of biodiversity, the water use and so on of simple ingredients like sugar are staggering. Global farming also provides a livelihood for 2 billion people, many living in poverty and still being screwed by free market prices. And the recent rush to invest in developing world farming land (in response to higher food prices) raises issues around food sovreignity; the right to feed your own people, before exporting cash crops – biofuels being one example of profit and hunger in confrontation. Meanwhile, on the subject of false economies, one third of all food bought in the UK is wasted (according the government WRAP) campaign. And some of this waste must be due to excessive ‘2 for 1’ type promotions.
Of course it would be a brave mainstream retailer today that turned its back on ‘cheap’. It will take much more substantial education for a start. You'd need to create the sort of awareness around 'cheap' groceries that exists around 'junk' food. And would stand more of a chance if real economies – for instance refills and concentrates – substituted for some of the historical unethical short cuts that have been taken. But if shopping and green are to be true partners going forward then addressing the other 95% of what people buy (than ethical goods) is probably the better bet. The prediction by Fast Company magazine of much broader sustainable labelling and rating schemes (for instance across a whole retailer range) as a top trend of 2009 looks pretty well placed.