Turning Green into Gold

Companies that invest in sustainability now are likely to reap dividends when the economy improves

Packaging Digest, 7/21/2009 10:21:00 AM

I’ve been ruminating about the tough economy like everyone else. Rather than lamenting what is, I think this downturn affords businesses a rare opportunity to slow down, rethink and reset.

Consumer product companies that innovate, will insulate their brands to a higher degree from the current downturn while positioning them for future growth. Tip: it’s time to research sustainability measures that can begin to be implemented—now. If there’s ever been a time and a place to allocate tight marketing budgets, this is it.

Why sustainability and why now? Sustainability practices are increasingly important to consumers. Interestingly, they have not pulled back from buying green, slow economy, decreased purchasing power, or not. That goes for products as well as packaging. Information Resources Inc. (IRI) recently released an informative report that CPG companies really need to take heed of, titled: “Sustainability: CPG Marketing in a Green World.”

With more and more consumers consciously choosing to live greener lives, sustainable product packaging is no longer an afterthought. Rather, it should be adopted and integrated as part of an overall brand repositioning in sync with an overall environmentally responsible plan. Company brand values need to be tweaked and realigned with today’s consumer values more than ever, if they are going to succeed over the long haul.

IRI’s report tracked consumer behavior in eight distinct demographic segments and the following green segments: organic, Fair Trade commodities, and eco-friendly products. While sales to hard-core eco-centric consumers fell 6.6% in 2008 largely due to price increases, “respectful stewards” increased spending on environmentally friendly products by 15.5% and “proud traditionalists” by 8.4%. This helped buoy sales up 4.1% for the year, signifying that previously less green consumers are climbing what IRI refers to as “the green adoption curve”.

IRI’s eight green consumer groups:

• Eco-centrics. “Green” is the chosen way of life for these consumers; they are well-informed, active and ardent supporters of green products.
• Respectful stewards. Idealistic, community-focused consumers who see value in paying more for products that are green.
• Proud traditionalists. Hard-working, family-focused consumers who focus on having environmentally-conscious homes and experiment with green products.
• Frugal earth mothers. Lower income female consumers who look for savings while also looking for more prudent, wholesome products for their families.
• Skeptics. Men who are highly educated and earn high incomes; who are also skeptical about the benefits of purchasing green products.
• Eco-chics. Young adult consumers who think being green is hip. They’ll buy on impulse; they’re early adopters but haven’t delved deeply into environmental issues.
• Green naives. Younger, lower income consumers who haven’t made the correlation between cause/effect and environmental responsibility.
• Eco-villains. Middle income male consumers; couldn’t care less about any environmental issues and dismiss environmental concerns outright.

The key for marketers is to understand which segments of consumers are prevalent within their own constituencies so that their companies can offer the right kind of innovations and messaging that is relevant to them. This will take some resource investments of time, capital and research on the part of the marketing department, but the returns are too important to ignore.

Green Packaging: Why Now?
There are few consumer goods that are 100% green, natural and organic, but there are more and more products with at least some components that are green, natural or organic. There is no such thing as 100% green packaging. However, that does not mean companies can’t make commitments now and into the future to conduct business as environmentally soundly as possible. Nor does it mean they cannot find innovative new ways to develop and integrate greener components in their products and packaging. Right?

Why would companies invest in this now, when budgets are getting slashed? Consider this: research demonstrates that while sustainable packaging isn’t the primary consumer purchase motivator, it has become important enough to make consumers opt for one brand over another within a product category if one company embraces good environmental practices and a competitor doesn’t.

The Hartman Group’s “Sustainability Outlook: The Rise of Consumer Responsibility” shares some significant findings concerning packaging attitudes in a recent survey among 1,600 consumers:

• The highest rating—75% of respondents stated the importance of packaging that could be recycled as most important to them.
• 71% indicated biodegradability in packaging an important asset.
• 67% cited packaging made from recycled content important to them.
• 63% like to purchase packaging that is refillable.
• 62% felt that minimal packaging was important.
• 60% of respondents look for packaging that can be repurposed for other uses.
• 51% indicated compostable packaging was important to them.

Bottom line: with so much talk focused on myriad environmental issues over the past few years, and growing impetus in recent months, the consumer is increasingly aware. There is growing concern about packaging and what becomes of it after it has served its purpose. The three R’s—Reduce, Reuse, Recycle have hit home with greater numbers of consumers now.

Consumer product companies ought to consider: what better way is there to sell sustainable values than through that most important of marketing initiatives—packaging? Utilizing the three R’s in updated packaging design sends a powerful message. Better yet, using the packaging itself as a communications platform about the company’s commitment to sustainability gives marketers a powerful tool to reach consumers. Targeting that messaging to the company’s proper green demographic(s) becomes meaningful. Tying that messaging in to the company website, advertising and every other marketing initiative it uses, will further educate targeted consumers.

Contrary to the belief that consumers are increasingly skeptical due to widespread green-washing, The Hartman Group’s survey yielded an eye-opening statistic. 82% of those surveyed thought most companies’ green claims “mostly true”. Of course, it is important to maintain trust with consumers by being honest about all of the company’s sustainability practices, including those made on and about packaging. It is better to say nothing, than it is to make claims that stretch the truth; the latter can do considerable damage to the brand, precisely when building consumer trust has never been more important.

Consumers are not only looking to niche companies that have made sustainability a cornerstone of their brands. They’re also expecting established mass market companies to move in this direction, and rewarding those that do. Being responsible stewards of the environment by adopting better business practices is step one. Offering more sustainable products and continuing product innovations is step two and that necessarily leads to sound packaging.

Sustainable packaging should be used to push the values of “reduce, reuse and recycle” and as the ultimate platform to reach the target consumer with the company’s overall sustainable positioning. Here is a terrific opportunity to further differentiate brands in a meaningful way—right now and for the future. Seizing this golden opportunity will lead to green in more ways than one.

Ted Mininni is president of Design Force, Inc., the leading brand design consultancy to consumer product companies with Enjoyment Brands™. Design Force helps their clients market brands that deliver positive, gratifying experiences to consumers. Their expertise lies in emotionally connecting consumers to brands by creating compelling visual brand experiences, which motivate purchase decisions.