The Market for ‘Green’ Products: Confusion or Business-as-Usual?

Businesses are regularly exhorted to reduce their environmental footprint and ensure that their products and services are as green as possible. We are told that consumers want to do business with those with credible green credentials. Is that true? Recent research suggests that the ‘green’ consumer is still a relatively small proportion of the total market and much of the rest of it is either confused or thinks that business operations should be ‘green’ as standard practice.

1. In April of 2015, International research firm GfK, reported that 53% of Canadians said they would feel guilty about doing something environmentally unfriendly on Earth Day (held in April each year). This is less than the global average (63%) The Canadian results mean that on the one day of the year most focused on the environment, 47% would not feel guilty. Does this mean half the population doesn’t care? Is not motivated by guilt? Makes decisions based on criteria other than ‘green’ characteristics? Or just doesn’t care about Earth Day?

The same survey reported that 73% of survey respondents from Canada feel that companies and brands should be environmentally responsible. That’s slightly above the U.S (66%) and close to the global average (76%). The highest levels of strong agreement were in the 50-59 and 40-49 age groups (about 30% in each).

When shopping themselves, 55% of survey respondents said they only bought products and services that appeal to their individual values. This is below the global average (63%) and on par with the U.S. (54%). It is not clear whether being ‘green’ was one of those “individual values”. In other words, 45% of respondents buy products and services without any apparent reference to beliefs, values or ideals.

The study was carried out in 2014, based on results from 23 countries.

• A 2014 study by NPD Group found that 57% of U.S. adults expressed some level of concern about genetically-modified foods, up from 43% a decade earlier (2002). Only 20% of survey respondents said they were “very” or “extremely concerned” about GMOs in 2014, although the percentage in this category doubled over the decade. The study suggests that the main reason for concern was simple confusion about what GMOs are and therefore concern about safety. Not everyone is confused though. The study also noted that about 14% of consumers shopping across all grocery channels actively look for and buy non-GMO products. This group is part of the roughly half of survey respondents who primarily shop natural and specialty stores.

• In May of 2015, the CEO of U.S.-based Hain Celestial, John Carroll reported the emergence of a second tier of conventional retailers (after retailing giants like Target and Kroger) seeking to capture a portion of the grocery dollar spent by a younger age demographic (Millennials). This group is known for making product choices that emphasize “farm-to-table, organic, natural, free from (other) ingredients.” (Millennials are people born in the 1980s to early 2000s, making them 15 to 35 years old today.)

Apparently, attitudes – and behaviours – on issues with environmental implications vary by country, by topic/issue, and by age group. As a result, before launching major ‘green’ initiatives, companies with plans to integrate environmental impact considerations into their business strategies would do well to find out whether that strategy plays to the environmental ethics of both current and potential customers.
Small wonder that so many businesses begin their trek to a ‘greener’ organization by focusing on improving energy, water and other efficiencies. And that’s a great start. But stopping after those objectives have been achieved could leave significant business opportunities on the table. Especially ones that create a distinctive market space and do a better job at meeting customers’ current and future needs.