Capturing the Green Advantage for Consumer Companies

Capturing the Green Advantage for Consumer Companies

          
Title image

Capturing the Green Advantage for Consumer Companies

  • Add To Interests
  • SAVE CONTENT
  • PRINT
  • PDF

  • Related Articles
    Green Shopping: Where It Matters Most

    For most consumers, green goes beyond shopping behavior. It encompasses nearly everything they do—and how that affects the amount of energy they consume and the amount of pollution they generate. Yet shopping green is increasingly an important way for consumers to act on their commitment to the environment. At least half of our survey participants told us that they buy green products regularly or sometimes. Europeans lead in this behavior, with 54 percent of these respondents reporting that they shop green regularly.

    But if shopping green is common, shopping habits vary considerably by product category. (See Exhibit 6.) A slightly larger number of participants in our survey said that they purchase green food products more often than green nonfood products. Most popular in the food category are fresh meats and vegetables, which respondents said taste better than conventional alternatives and can be depended on for higher quality. Indeed, these foods rank among the top three most frequently purchased green products across all countries in our survey. Overall, the percentage of consumers purchasing green products is highest for paper and packaged products (such as paper towels, cleaning products, and trash bags)—a category in which green features are well entrenched, cheap, and convenient. In all nine countries surveyed, 15 to 20 percent more consumers purchase green household cleaners than purchase green products on average—and an even higher percentage of consumers in France and Canada reported buying green cleaners.

    exhibit

    There are differences across countries as well, as the popularity of organic chocolate illustrates. In Canada, organic chocolate is 11 percent less popular with consumers than are green products on average. But in Italy, organic chocolate is 4 percent more popular than green products on average. Bottled water ranks among the top five green products in China, Japan, and the United States, but Germans purchase it with below-average frequency. Green appliances, such as energy-efficient cooktops and washing machines, are much less favored in China, where most consumers still wash their clothes by hand and government regulation keeps energy costs relatively low. (See “China’s Growing Environmental Awareness.”)

    China’s Growing Environmental Awareness

    China’s rapid industrialization is having a huge impact on the country’s environment in ways that consumers can see every day. Air and noise pollution have grown more troublesome, especially in urban areas. Pollution of freshwater reservoirs is threatening the water supply of millions of households and the livelihoods of people in rural areas. But as significant as these problems are, they pale before China’s milk scandal, in which thousands of children were sickened by industrial contaminants in September 2008.

    The media spotlight on the 2008 Olympic Games brought many of these problems to the attention of the world—and to the attention of Chinese consumers. The government has promised remedies, but environmental regulators have no legal recourse and are seen by many as toothless tigers. Nevertheless, many Chinese consumers are determined to do what they can to help the environment.

    There is little incentive to purchase energy-efficient appliances in China because such products cost comparatively more and, in any case, the price of electricity and water is regulated by the government. So purchasing green in China generally means buying fresh foods. And because the penetration of modern trade formats is still very low, the Chinese purchase almost all their fresh food at so-called wet markets, where prices are quite moderate. Wealthier people, however—such as dual-income couples without children—favor natural ingredients at any price and will buy organic foods at hypermarkets, where they are much more expensive.

    There’s no doubt that consumers all over the world are increasingly choosing in favor of green products, but they are also expecting more from the companies that make and sell those products. The challenge for green-minded companies is to understand which actions will be most meaningful in their categories and for their customers.

    Are consumers attracted to green products because they leave a smaller carbon footprint? Because they are healthier and safer? Or because they cost less? In some cases, it’s a combination of two or three features that makes for a big hit. Tesco’s reusable shopping bags are successful, for example, because customers are concerned about both the environment and their pocketbooks—and because the bags are well designed and attractive. Furthermore, companies must be aware that the green qualities that matter in one product, category, or country may not matter—or may not matter as much—in another.