Confidence to Grow Green - Even in Recession

Cucumbers, Romaine lettuce, tomatoes – yes, and even those pesky weeds – have grown strong this harvest. So have sales of many “green” products, a hopeful sign considering how other industries have wilted over the past year.

Consumers’ interest in buying green is holding firm and, in some cases, even increasing, based on the latest wave of Eco-Insights (Spring 2009). The recession has created an environment where many consumers are trading down to stretch their dollars, presenting a challenge for green which is often perceived to command a premium. Results in the Eco-Insights survey, however, indicate that green can still be good business.

Eco-Insights tells us who’s buying green as well as which categories are seeing the most growth, stability and loss (in volume and dollars spent). Survey results can be analyzed by demographics, psychographics and lifestyle for 130 products and categories. In this issue of Echo, we look at the market for eight of the broad categories measured in Eco-Insights.

Where Green Holds its Own, Grows and Loses Ground

Despite taking tough economic hits, at least two-thirds of the U.S. adults who took this survey and have been green buyers in the past said their green purchasing has been stable during the first half of this year. For many, it even increased. This behavior, as seen across many categories, tells us that once someone becomes a green buyer, chances are good they will stay that way.

"Across many categories, once someone becomes a green buyer, chances are good they will continue." -Amy J. Hebard, PhD Chief Research Officer, Founder

The Personal Care and Beverage categories rank highest in terms of holding their own, while Fresh Food and Cleaning Products trump other categories with greater growth. Overall, when consumers anticipate changing their green buying behaviors, it’s more often to increase, not decrease. For example, Fresh Food buyers who say their green buying has changed are more than three times more likely to buy more, not less. Packaged Foods, on the other hand, shows some vulnerability: more people say their buying in this aisle is eroding (13%) than increasing (12%). While this difference is tiny, it suggests softening that smart marketing will need to address.

Digging into Demos

Within the big picture of green purchasing, zooming in on demographics can help marketers understand where and how people make consumer choices. For example, overall, Fresh Foods showed the most growth in this analysis. Demographics show that this growth is being driven by some groups more than others: younger adults (18-24 year olds), people with new jobs (even those earning less than before) and younger marrieds (less than five years) are among those most likely to say they’ve increased their purchases of green forms of Fresh Foods. On the flip side, consumers whose purchasing has declined include those with low income (less than $25,000/year), people who are widowed or divorced, and older Baby Boomers.

While Packaged Foods show more of an overall decrease than other categories, students and people with new jobs are among those most likely to have increased purchases in this category. Among those most likely to say they bought fewer Packaged Foods are women, older consumers (65 years+), and people who work from home.

Tradeoffs and Brand Loyalty

Growing numbers of consumers want to buy green, but economic constraints force tradeoffs. For many products, consumers are as likely to consider store brands as name brands, and private label purchasing is on an upswing.

Consumers who are increasing their green purchasing tend to buy name brands; those buying less green are increasingly open to store brands in place of name brands and, in the process, often discover that store brands can be just as good. The opportunity this represents for private labels challenges traditional brands, many of whom will have to re-think their value proposition as the economy emerges from this recession. The desire to go green may motivate consumers to buy name brands again, as green is one of the points of differentiation that could help brands distinguish themselves, when positioned properly.

Takeaways

1. Green is one of the few growth industries today, so thinking about becoming green(er) needs to be part of your growth strategy, if it isn’t already. Most consumers who buy green now want to maintain their level of buying and in some cases even increase it.
2. Growing green is not a one-size-fits-all opportunity. Understand the motivations, buying patterns, demographics and lifestyles of existing and potential customers. Communicate the value clearly. Non-green buyers, whose biggest barrier is often price, will continue to be a tough sell at least until the economy strengthens – efficient messaging may mean putting these consumers off to the side and concentrating instead on reaching those more likely to be receptive.
3. Store brands plus green may be the perfect storm for retailers who deliver the green promise at an affordable price. Premium brands who’ve lost share to store and value brands should think about how to leverage green attributes to differentiate themselves.

This article provides only a sampling of the data available for each segment and each category. Want more of the dirt? Contact us.