In my previous blog, I put forth the premise that companies should stop focusing on the one-dimensional idea of “going green” and concentrate instead on the goal of achieving sustainability, which involves a three-dimensional focus on the ability of people, the planet and profit to all survive and thrive.
Now I’d like to carry this a bit further by posing the question: Is the Green Movement over as it relates to business? I think so – at least in the sense of being a purely “environmental” cause. It reminds me of a point in time back in the ’90s when I was just exhausted after trying to rebuild The New Organics Company, an early supplier of organic foods to conventional retail outlets. The company then had its products in some 300 Walmarts and thousands of other stores, and was struggling every day to maintain its somewhat precarious position of leadership in what was then a fledgling industry. Some $30 million dollars or so into my tenure as CEO, I suddenly realized that the industry was fighting itself, and the lack of coordination and consistent messaging from the various entities involved had become a major issue. We just couldn’t seem to get our act together on such fundamental questions as whether it would be better to preserve the small-farm “purity” of organic crops or to cultivate them on much larger tracts of land in an attempt to market organic foods to a broader segment of consumers. I personally preferred the latter approach, but realized the inherent lack of scale and efficiencies would result in premiums that most people just weren’t prepared to pay. So any scale outside of specialty retail would be very difficult to implement, and in fact for the most part just wasn’t profitable. That’s why I believe – and yes I am going to say it here – that the organic industry’s share of three percent of total food sales has not been a success.
But how does this apply to the Green Movement in general? The problem, as I see it, is that the business of “going green” can’t be accomplished at conventional prices. It nearly always necessitates an added premium – and people generally don’t like to pay a perceived premium for something they really don’t understand. That is why I believe green is going the same route as organic – a specialty for an elite and enlightened market, but not something with mass appeal.
Now this needn’t be a downer for either environmentalists or for companies that wish to appear progressive, provided that they’re willing to demonstrate flexibility and take a pragmatic approach to the problem. To once again use my own experience as an illustration, after leaving The New Organics Company (which ultimately lost its foothold due to unfortunate circumstances that I won’t go into here), I went to Horizon Organic Dairy. Sales there were flat, and the firm was then engaged in determining which direction to go. So we did some research and found that the biggest boosters of organic milk were pediatricians, who were recommending it to parents because it did not contain bovine growth hormones, and thus protected children – and especially girls – from early puberty. Now we had a direct benefit to justify the premium, which we honed in on. This led to our building a much stronger company, thanks in part to a partnership with Starbucks, which bought our organic milk and proceeded to make a small size for children available in its retail outlets. At that point, the brand really took off, causing Starbucks to become interested in buying it, and eventually leading to its being acquired by a small stakeholder, Dean Foods – a huge success for everyone involved.
The point of this story is that in order to make organic a really profitable proposition, we had to persuade a sizable group of consumers to pay a premium. And that required our being able to show them convincing evidence of a specific health benefit, particularly where their children were concerned – something that’s a bit more difficult when you’re merely talking about the the absence of pesticides and other organic attributes. So to apply this same lesson to the Green Movement in general, I would venture that until you can attach a specific, tangible benefit for the buying public to premium green initiatives – the ones whose costs have to be passed on to the consumer – they won’t have the runway to be effective, and may well make your products less, rather than more competitive.
That’s why I’m now convinced that at least where business is concerned, the Green Movement, as such, is no longer sustainable – and thus needs to be replaced by the Sustainability Movement. That is to say, by environmental-type programs that will either save companies money or provide consumers with demonstrable, tangible benefits – and that they’ll thus be willing to pay a little extra for. If such programs also will help prevent climate change or save an endangered species, that’s all well and good, and those aspects can and should be included as added benefits in any promotional efforts. But our primary focus should be on making people’s lives a little easier, or perhaps eliminating a threat to their family’s well-being – for instance, by offering nontoxic alternatives to harmful chemicals in household products Let’s start emphasizing the the kinds of things that will help make daily existence more sustainable, rather than more noble goals that a majority of shoppers – particularly in a stressed-out economy – might feel they can ill-afford to worry about (and that you can rest assured will continue to be addressed by companies whose main appeal is to those concerned about the environment.)
That’s the message I’m now attempting to convey to groups I’m addressing – complete with an opening slide featuring a red X through the word “green.” And that in no way is meant to imply that I don’t remain as fully committed an environmentalist as I ever was. It’s just that I have come around to the belief that a more pragmatic and less idealistic-sounding approach to environmentalism can often be the most effective way to promote it .
