It’s Easy To Be Green
September 1 1995 by Bob Donnelly
As consumers have become more concerned about-and willing to spend money on-personal health and the environment, “green marketing” has created profitable opportunities for both large and small companies. Entrepreneurs who have developed products tailored to the environmental niche have been especially successful. The Body Shop’s Anita Roddick and ice-cream duo Ben Cohen and Jerry Greenfield of Ben & Jerry’s are good examples. Both companies’ founders have built reputations for corporate responsibility, not only with their product lines but by aggressive promotion that touts social responsibility. Those companies’ successes surprising if you follow market research: Recent surveys have found that almost 90 percent of consumers are more likely to buy products from companies with the best reputations for social responsibility, when price, quality, and service are equal. Environmental concern is not only a consumer issue.
The Investor Responsibility Research Center, a lobby group based in Washington, has identified environmental issues as the third most active shareholder concern in 1995, after profitability and business viability. Shareholders of Mobil, Pfizer, and Union Camp have asked their executives to study the safety of additives they produce and sell that are ultimately inhaled by humans.
Dwight Minton, CEO of Princeton, NJ-based Church & Dwight, maker of Arm & Hammer products, knows a lot about green marketing. His environmental positioning of Arm & Hammer laundry detergent since its launch in 1970 helped propel sales of the product, which now generates 40 percent of the company’s revenues. He has taken the same approach with Church & Dwight’s other consumer and industrial products. “We make the environment a regular part of our business from planning through execution,” Minton says. “Selling from an environmental platform has created a unique equity for the Arm & Hammer brand.” Minton’s approach to stakeholder alliances has been independently measured as annually providing an incremental 5 percent of company revenue, or $10 for every $1 invested in environmental marketing and communications.
New product ideas have even come from Church & Dwight stakeholders themselves. One of the company’s stakeholders suggested that it produce a baking soda-based circuit board cleaner. Eighteen months later, the company launched Armakleen, an environmentally safe alternative to existing technologies. Late last year, Minton created a division within his specialty products group to develop baking soda-based industrial cleaning solutions.
Often, the environmental message stems from a personal philosophy espoused by a company’s top executives. At Londonderry, NH-based Stonyfield Farm, a natural yogurt company with a 60 percent growth rate over the last eight years, founder Sam Kaymen and CEO Gary Hirshberg say they are dedicated to producing the purest natural yogurt on the market. “My ultimate goal is to be able to look my children in the eye and tell them we’ve made the world healthier…and we’ve inspired thousands of other businesses to dedicate themselves to the same agenda,” Hirshberg says. Their strategy apparently has worked: Sales have grown from $2.4 million to $25 million over five years. Last year, the company set up a distribution agreement with
An environmental and socially responsible strategy proved profitable for Minneapolis-based Aveda, a maker of natural and organic cosmetic and hair-care products. Founded in 1978 by Austrian hair-stylist-turned-entrepreneur Horst Rechelberger, Aveda’s mission was to “care for the world we live in,” he says. His philosophy of “walking the pure path” has led him down a profitable road: Although Rechelberger won’t release figures, he says company sales have increased 50 percent in the last five years. Aveda’s more than 700 products now are sold in about 25,000 hair salons, as well as in Aveda Environmental Life stores, Aveda Institutes, and Aveda Spa Retreats. Rechelberger has opened more than 1,400 Concept Salons nationwide and plans to open another 500 by the end of this year.
As these companies show, with the right idea, a little marketing savvy, and some social awareness, it is possible to capitalize on green marketing. You just have to know where to plant the seeds.
Robert M. Donnelly is chairman and managing partner of Alpha International Management Group, a New York-based consulting firm that works with growing companies.