Longevity: The Undervalued Brand Growth Strategy
This is my Coach purse. It recently caught my eye in a photo taken 13 years ago when I noticed it hanging over my shoulder. I had purchased it years before that and have used it nearly every day since
This is my Coach purse.
It recently caught my eye in a photo taken 13 years ago when I noticed it hanging over my shoulder. I had purchased it years before that and have used it nearly every day since. Thankfully, I’m no fashion maven and care little about style trends, so using one purse for 15-plus years has not cramped my “image” (as much as it pains my girlfriends).
A little worn, with some loose threads and tarnished metal, it has held up well. Beyond well. It’s what I would call durable, which is somewhat remarkable for a product designed in an industry where disposable is dictated by style rather than deterioration.
It’s comforting, refreshing, even shocking to have some goods last so long. A 15-year-old purse is an anomaly. A few other products I own have also stood the test of time. They work reliably, perform their role, year after year. And through those years they’ve build memories, yes, even the vacuum.
My 19-year-old Toyota.
My 14-year-old Timberland hiking boots.
My 20-year-old Specialized road bike.
My 13-year-old Dyson. (Perhaps we should use this one more frequently …)
It was pretty darn hard to come up with a list of items that have lasted more than 10 years. Heck, I’ll even put my 3-year-old Peloton on the list of products I’m surprised haven’t broken yet. We are used to buying new. Most of us don’t even know how to fix things anymore. The cost of replacement is often far less than the time and monetary expense for repair.
We’ve all heard our parents or grandparents remark “things just aren’t made like they use to be.” And it’s true. My kids still play with my husband’s Fisher Price trucks from the 1980s and they show no signs of wear. Many of today’s brands don’t stand a chance in 40 years.
Short-Lived is Short-Sighted Business
Purposefully producing goods with a limited shelf life or at a lower quality is called many things: planned obsolescence, perceived obsolescence, value engineering, or simply the latest style or trend. Companies that utilize this business strategy believe in the rewards of cutting costs by removing value from the product and planning frequent updates or new launches despite minimal real innovation.
The rewards do seem appealing. This business model supposedly assures a steady stream of customers, guaranteeing more consistent revenue with lower costs and, therefore, higher margins.
But this approach is bad for the environment, bad for the customer, and, I argue, bad for your brand.
Great marketing needs to be built on top of a great product.
Continuing to erode the longevity and quality of one’s product may appear to yield short-term benefits, but it comes with long-term consequences.
Part of the problem is simply our expectations about product lifespan. A classification used in industry analysis and financial reporting is “consumer non-durables,” which includes products expected to be used or replaced within three years, such as clothing, beauty products, and food. This language reinforces short-term thinking in product development and marketing, encouraging a disposable, “single-use” mindset rather than repairability and longevity.
The Relationship Between Long-Lasting and Business Growth
When I purchased my Toyota, I originally planned to buy a used one. I shopped the used lots and realized cars five to 10 years old cost only a few thousand dollars less than a brand new one. Instead, I bought new, confident that it would last and trusting the value would remain if I wanted to sell in the future. Rather than going to an intermediary, Toyota received my full margin.
What if we thought about how to put more value into our products? Make them last longer? Create longer cycles between repeat purchases? What if we designed our products to be so durable that we worried about whether our customers would need to buy again? Would we lose money? Call me naïve, but I think we’d build a reputation for longevity. The reward of that reputation? A strong, enduring brand and the ability to price much higher in the market.
Tiffany & Co. and Patagonia are just a couple of iconic brands known for durable, stylish products that have experienced sustainable growth over the past few decades. Tiffany & Co., which has focused messaging on quality, premium craftsmanship and timeless style, has grown steadily since the 1990s before being acquired by LVMH in 2021. Patagonia, with an emphasis on repair, returns, and durable materials, quadrupled its sales in the past decade. A Time reporter covering Patagonia who had a hole in his Patagonia fleece was told by then-CEO, Rose Marcario, that he didn’t need a new one. “You can just patch it,” she said.
Why Longevity Builds Purpose-Driven Brands
Creating durable or longer-lasting products can be a meaningful differentiator in a competitive landscape saturated with lower-quality offerings. Focusing on longevity is a powerful strategy for purpose-driven companies to build a trusted, enduring brand. Doing so:
Elevates Brand Value:
Durable products fulfill or exceed customer expectations, reinforcing quality and reliability as core brand attributes. An extended product lifespan keeps customers engaged with the brand longer, fostering trust, loyalty, and a higher likelihood for repeat purchase. These brands often generate strong secondary market value, which further reinforces the brand reputation.
Commands Substantial Price Premiums:
Products known for longevity can significantly outprice competitors. Customers willingly pay more, viewing durable goods as investments rather than expenses. Brands like Rolex, Tumi, and All-Clad leverage their reputation for lasting quality to charge multiples of standard market rates, boosting profitability and perceived value.
Promotes Word-of-Mouth Referrals (and therefore lower marketing costs):
Durable products earn advocates who talk on your behalf. For example, the “Buy It For Life” movement (#BIFL) on Reddit, Twitter, Instagram, and Facebook has become a thriving community of word-of-mouth marketing and endorsement for products that last.
Focuses Resources on True, Meaningful Innovation
When a brand identifies durability as a differentiator, innovation resources are spent on substantial improvements versus superficial product launches for the sake of news. With these brands, customers come to know that any product advertised as “new” truly means “better.” Marketing campaigns rooted in substantive improvements often generate more significant visibility, media and retailer interest than those with slight changes.
Reduces Environmental Impact
The most sustainable product is often the one already in use. When products last longer, they require less frequent replacement, resulting in fewer materials, less energy and water during manufacture, and less waste. Efforts to reuse and repair extend product lifecycles, further reducing the environmental impact. For brands seeking to attract sustainability-minded consumers, durable products are a natural fit and are easy to communicate environmental benefits.
6 Longevity Strategies from Long-Lasting Brands
So, how do you integrate durability into your business and marketing strategy? Here are some specific examples:
1) Osprey: Lifetime Guarantees Via a Generous Return Program
Osprey offers lifetime guarantees on almost all its products. If they can’t repair the product, they will replace it. Generous return and repair programs create loyal customers. For brands with a shorter shelf life, such as food and beverage, this can include a “guaranteed fresh” promise.
2) Miele: Testing for Durability and Innovating to Improve Longevity
Durability doesn’t just happen; it requires rigorous testing and innovation. German appliance brand Miele tests its appliances for the equivalent of 20 years of use. These stress and durability tests identify the parts that don’t hold up and then improve them for longer-lasting performance.
3) 80 Acres Farms: Redefine Category Lifespans
Longevity doesn’t just apply to durable products but consumables too. One of my clients is 80 Acres Farms, a vertical farm that sells lettuce, salad kits, and other vegetables. 80 Acres produce lasts 2+ weeks in the fridge, allowing the brand to make a differentiated “fresher longer” claim on-pack. This benefit delights customers who throw out spoiled lettuce less frequently and saves time with fewer store trips because lettuce can be purchased in one weekly visit.
4) Le Creuset: Generational Heirlooms as a Messaging Strategy
When products last, they can become family heirlooms. Cookware brand Le Creuset is explicit about this concept. Headlines on its website include “Heirlooms-in-the Making” and “Generations of flavor.” Durability is built into the brand’s equity.
5) Waterford: Timeless Fashion and Style
Irish glassware brand Waterford is known for its timeless elegance. Discontinued patterns are considered a desired vintage collectible versus being seen as out-of-date. Waterford’s Lismore pattern has been the No. 1 selling crystal stemware pattern for more than 60 years. Many home décor trends come and go, but this brand remains consistent while maintaining an enduring style.
6) Fairphone: Designing for Repair and Modularity
When products are designed to be repaired versus replaced, the entire approach to design changes. Parts can be separated and replaced without requiring an entirely new item. Smartphone brand Fairphone creates designs with modular components that can be easily replaced or upgraded.
We, along with consumers, have the mistaken belief that new equals better, or faster consumption equals more sales. These mindsets drive a myriad set of behaviors, product launches, and marketing focused on constant acquisition and replacement. Creating products that are long-lasting and/or timeless can replace this mindset with quality and value for your customers, resulting in increased revenue and profitability for businesses.
So I ask, what does long-lasting look like in your business?
Navigating the Green Guides: Valuable Principles for Marketing Claims
I started writing this article solely from the lens of environmental claims, with the intent of educating brand leaders about the Green Guides.
This article is the first in a series on accurate environmental claims. All articles in this series include:
Part 1: Beyond the Buzzwords: Why Accurate Environmental Claims Matter
Part 3: Lifecycle Thinking: The Best Tool to Help Brands Master Sustainability
Part 4: Navigating the Green Guides: Valuable Principles for Marketing Claims
Part 4 - Navigating the Green Guides: Valuable Principles for Marketing Claims
I started writing this article solely from the lens of environmental claims, with the intent of educating brand leaders about the Green Guides. But as I dove in, I realized that the principles in the Green Guides, which are published by the U.S. Federal Trade Commission (FTC) and provide guidance to help companies avoid deceptive claims, apply far beyond environmental claims. In reality, they lay out a broad set of principles all brand leaders can adhere to, no matter our topic.
The Green Guides are a tremendously useful tool to help your organization communicate clearly and transparently. And as consumers, many of us seek to buy products that are better for the environment — my hope is that this article makes you a more informed buyer.
There are three principles in the Green Guides introduction that should inform all marketing claims:
Marketing isn’t just what you say – it’s what you imply. Look beyond your messaging and consider what you may be insinuating across labeling, marketing, promotion, and advertising. Words, symbols, logos, depictions, and product brand names are all elements that contribute to direct and implied messages.
Deception is evaluated by a reasonable interpretation. Consider how a “reasonable consumer” would interpret your marketing claims. Deceptiveness is dependent on a consumer’s “net impression” of the advertisement. Even if your specific words and statements can be validated, what is the overall takeaway of the communication?
All claims need to be truthful and supported. It is a brand’s responsibility to determine that the claims made (explicitly, implicitly, or unintentionally) are accurate and supported with data or proof. While these Green Guides principles are written to apply to environmental claims, they are all too often ignored in many facets of marketing today. Heeding these principles within communications builds consumer trust.
[Disclaimer: I am not a lawyer, and this article in no way constitutes legal advice. Please seek legal counsel if you have questions.]
What are the Green Guides?
The Green Guides were first written in 1992 as a response to the increasing number of companies making environmental claims that were vague or misleading. According to the FTC, “Sometimes what companies think their green claims mean and what consumers really understand are two different things.” Updated three times since publication, most recently in 2012, the guidance includes 1) general principles that apply to all environmental marketing claims; 2) how consumers are likely to interpret particular environmental claims; 3) how marketers can substantiate and qualify their claims to avoid deceiving consumers.
Violations of these principles can result in the FTC taking action against companies, either by banning the advertising or issuing fines. Additionally, consumers can sue companies for deceptive practices, and many have settled for millions of dollars.
Here are some Green Guides highlights – note that if you remove the word “environmental,” most remain great principles for any marketing claim.
General, unqualified environmental benefit claims are deceptive. Claims such as “environmentally preferable” are vague, hard-to-interpret and often imply a huge environmental benefit or no environmental impact at all. Using the term “eco-friendly,” for example, would be deceptive unless it clearly and in close proximity states the product’s environmental attributes with evidence to support the statement.
Qualifications and disclaimers must be clear, prominent, and visible. This means plain, understandable language and big font size so the text is legible and easily read by the viewer. Often, qualifications or disclaimers are in a tiny font and hard to read or understand.
Do not overstate or imply an environmental benefit is bigger than it is. The Green Guides give this example: Moving from 2% recycled fiber to 3% and then labeling the product as 50% more recycled content. This is deceptive.
Comparative claims should be clear. Any statements of “more/most,” “better” or “-er” need to explicitly state what the comparison is to, whether that is an alternate product made by the same company or a competitor. Data must be up-to-date to continually ensure the claim remains accurate.
Certifications and seals of approval must be legitimate. The brand cannot imply that a product, package, or service has been endorsed by an independent third party when it has not been. The use of a general logo or seal, such as “eco-friendly,” likely conveys that the product offers a general environmental benefit. A more appropriate use of a seal or logo, for example, would be the percent of recycled content, or the fact that the package is curbside recyclable. All claims made or implied via logos or seals need to be supported with data.
Compostable claims must be specific and validated. If using this claim, a business must have proof that the product breaks down into usable compost in a safe and timely manner. Additionally, if a product cannot be composted at home, the company must disclose that information and must make clear the availability of appropriate composting facilities.
Biodegradable claims must have proof of degradation within one year. Companies must specify how a product will degrade in the typical environment where it will be disposed of within a one-year timeframe. For example, a trash-bag company that labels its bags as “biodegradable” is deceptive because trash bags are more frequently disposed of in a landfill where they will not break down within one year. On the other hand, a shampoo labeled as “biodegradable” is not deceptive if the company has data that the shampoo will break down in the sewage system within a reasonable timeframe.
Recycling claims must be specific and accurately convey ease of recycling. Businesses must ensure that their recyclable claims accurately reflect the availability of recycling infrastructure and clearly state which part of the product or package the recycling claim refers to. The Green Guides state that if facilities are available to a “substantial majority” (which the FTC defines as more than 60% of consumers), businesses can make an unqualified recyclability claim.
The Green Guides are a great resource because they offer several simple and easy-to-understand examples for each type of claim. The Green Guides are a useful, valuable resource, but they do not cover all aspects of sustainability — there are a lot of grey areas. The FTC is in the process of reviewing the Green Guides and is slated to release updated guidelines in 2024. These updates should provide more clarity on aspirational claims (benefits or environmental impact promised in the future); net-zero claims; “sustainable” claims; recyclable and recycled content claims; carbon offsets and climate change; and updated guidance on organic, sustainable, compostable, and degradable claims.
How to use the Green Guides in all your marketing claims
Read the Green Guides. Any marketer who is making environmental claims should be familiar that they exist, have read them, and understand the basic principles as well as the specifics that apply to the types of claims they are making (e.g. recyclable, biodegradable, compostable, etc.).
Apply the Green Guides through a standard process. If your brand is making any kind of environmental claims, you need to create a claims-review process to evaluate accuracy, comply with the guidelines, and analyze relevant supporting data or evidence.
Evaluate the perception of your claims. In the second article in this series on greenwashing, I argued that we need to understand whether the perception of what we say lines up with reality. The Green Guides attempt to outline this very thing. If you are not sure whether your claims are misleading, research your perception by talking to customers. It is difficult for us to assess how a “reasonable consumer” would interpret our marketing when we have an insider perspective.
Here is a practical example that illustrates how to apply these principles:
I was working with a client who was launching a new product, part of which included a biodegradable material that represented about half of the product materials. The initial messaging for the product focused on how the product was “biodegradable.” Because the company only had data to support the biodegradability of half the product, I considered the message to be misleading based on the Green Guides’ principles of a reasonable consumer’s interpretation. As a result, we reworked the messaging to make it extremely clear which part of the package was biodegradable and in which conditions (in this case, water).
This article wraps up our series on transparent and accurate environmental claims. My aim was to equip business leaders who do not have a large infrastructure for claims support to navigate this space with confidence. There are real risks to making statements that are misleading or cannot be supported. Accusations of greenwashing, lawsuits, and fines erode trust, cost money, and are a distraction to the business. Understanding the framework of life cycle thinking provides a critical foundation for understanding the core principles of sustainability and how environmental claims fit within the context of a product’s total environmental footprint. The Green Guides are a free and useful resource that provide specific guidance on how to communicate in a way that is not deceptive. Armed with this series, , my hope is that you are more informed, more equipped, and more motivated to communicate accurately and transparently about the environmental benefits of your products and services.
Life Cycle Thinking: The Best Tool to Help Brand Leaders Master Sustainability
A common dilemma I have is whether to recycle my yogurt containers. I know they are made of a recyclable plastic, and my children constantly urge me to recycle, but it’s not so simple.
This is the third article in a 4-part series on transparent, accurate environmental claims. All articles in this series include:
Part 1: Beyond the Buzzwords: Why Accurate Environmental Claims Matter
Part 3: Lifecycle Thinking: The Best Tool to Help Brands Master Sustainability
Part 4: Navigating the Green Guides: Valuable Principles for Marketing Claims
Part 3: Life Cycle Thinking: The Best Tool to Help Brand Leaders Master Sustainability
A common dilemma I have is whether to recycle my yogurt containers. I know they are made of recyclable plastic, and my children constantly urge me to recycle, but it’s not so simple.
Here’s why:
Water: I rinse out the container with warm water so the yogurt doesn’t contaminate the recycling stream. How much water am I using?
Energy: The water requires energy to heat it. What’s the source of energy use? Is it from mostly coal (highly polluting) or mostly renewables? And how much energy is required to recycle the plastic?
Waste: Does the yogurt container actually get recycled and reused? Or does the recycling company end up putting it in the landfill?
Even if yogurt brands claim their packaging is recyclable, which is typically accurate, the above aspects are not within their direct control. Companies must understand the myriad factors that can affect the environmental impact of their products to ensure the accuracy of their claims.
As illustrated with this simple daily behavior, sustainability is a complex topic. But there’s an incredibly helpful framework that can help us sort through the mess of terms and impacts: life cycle thinking.
In part 2 of this article series on environmental claims, I described greenwashing as “communications that mislead an audience by creating the perception of a better environmental profile than reality.” There are two key parts to this definition. First, what is the perception that is created? Second, what is the actual environmental profile? It is impossible to understand whether the perception of our environmental profile is accurate if we don’t know what that profile is in the first place.
Life cycle thinking is a helpful tool to better understand, structure, and explain the broad concept of sustainability and the holistic impact of products or services on the environment. The more business leaders and communicators can become familiar with this framework, the more we can deliver meaningful improvements and communicate transparently. In addition to environmental claims, the framework serves as a valuable tool for innovation and business strategy.
Let’s dive in.
What is Life Cycle Thinking?
Every product (and most services) has a life cycle that begins with raw material extraction that is then manufactured, packaged, transported, used, and finally, disposed at the end of it’s life. At each phase of the product’s life cycle there are inputs (materials, energy, water) and outputs (products, materials, waste, emissions).
Life cycle thinking, as defined by the United Nations, is a “way of thinking that includes the economic, environmental, and social consequences of a product or process over its entire life.” Here, I’m focusing on environmental impacts, beginning with the most basic footprints: water, energy, and waste. The visual below refers to a linear product life cycle because most products’ end of life today is a landfill. Later on in this article, we will dive into a circular product life cycle.
To understand your company’s environmental impact, you need to be able to answer these questions for each phase. In the beginning, focus on the most critical products, materials, and inputs.
Raw Materials: Where do we get the materials from? What was that material doing or being used for before it was extracted? What are the environmental impacts of its extraction?
Manufacturing: What are the material, energy, and water inputs required to make the raw materials and the final product? What waste is created during the manufacturing processes?
Packaging and transportation: How are the packaging materials made and transported? How is the product transported at different phases of the life cycle?
Use: What inputs are required to use the product (e.g., energy, water, materials), and what waste is created?
End of life: How is the product disposed (landfill, liter, recycled, or incinerated)?
Why is Life Cycle Thinking Valuable?
If the global population consumed like Americans, we would need 5.1 earths to support us. This current level of consumption is unsustainable, so businesses need new ways to manufacture, sell, and innovate products and services. Life cycle thinking can highlight ways to reduce the use of resources and emissions that contribute to unsustainable consumption and harm air, water, and natural ecosystems. Meaningful changes can then be communicated transparently and accurately.
Life cycle thinking is a helpful framework because it:
Provides context: Understanding a product’s life cycle creates awareness. It forces us to unearth our business’s full environmental impact, not just parts we can easily see. It gives us a reference point for how changes to one phase can positively or negatively impact other phases.
Reduces risk: Evaluating a product’s life cycle can help us better understand possible risk, including environmental risks, marketing risks from misleading or inaccurate communications (which can lead to negative PR), or previously unknown supply chain risks.
Informs decision-making: Life cycle thinking provides a systematic framework for evaluating decisions, helping us understand the tradeoffs and unintended negative consequences of making a change. With this knowledge, we can use information and data to proceed carefully.
How to Begin
Life cycle thinking is, as its name implies, a way of thinking. Applications can be quick and high-level, or extremely detailed, requiring months of analysis. Below are three specific methods that use life cycle thinking to analyze your product or total business’ environmental impact.
Conceptual map:
Sketch out the product’s high-level materials, inputs, and outputs at each life cycle stage. This level of analysis is essential for all businesses. It’s critical to understand which phases have the highest environmental impact and in which footprint areas. Doing so can also highlight significant costs and potential material supply chain or financial risks. Below is a template to help you get started. You can include actual numbers or simply color code the boxes as “low,” “medium,” and “high.” If you don’t know enough to fill it out, do some research to better understand your biggest impacts.
Streamlined Life Cycle Assessment (LCA):
An LCA is a thorough analysis of all inputs and outputs in each phase across dozens of different types of impacts. There are two general types: streamlined and detailed. A streamlined LCA is a less precise version of a detailed LCA and relies more on secondary data to gather information quickly and inform decisions. Many publicly shared, peer-reviewed LCAs are available online and present a wealth of data to pull from. Allbirds has an in-depth tool and guide to help those getting started. Additionally, numerous software platforms exist to support this analysis as streamlined LCAs are still a complex and technical assessment. Note: Because streamlined LCAs often do not use data from your specific business, they are typically not considered accurate enough to use for marketing claims.
Detailed LCA:
Detailed LCAs are extremely thorough and typically are executed by a qualified third party. These LCAs are verified and checked for accuracy of inputs and adherence to IS0 standards. Detailed LCAs should be conducted before making large environmental investments and are necessary to support environmental claims that span the full product life cycle (e.g. carbon footprint, water, or energy reduction claims). If you’re interested in learning more on Life Cycle Assessments, here is a great in-depth article that includes numerous tools and companies that can perform this service.
Applications for Life Cycle Thinking
Hopefully you now understand what life cycle thinking is, why it’s important, and how to create a rough map of impact. But what are the practical applications when running the day-to-day business, including communications?
Sustainability strategy
Identifying your biggest environmental impacts within a product’s life cycle helps you prioritize your sustainability efforts. Many organizations target waste because it’s so visible, but focusing on material sourcing or the consumer use phase can often have greater impact. The simplest impact reduction across the full life cycle is simply using less to get the same job done, which requires fewer materials, less transport and creates less waste.
Product or service innovation
Sustainable innovation begins with a basic understanding of a product’s greatest environmental impacts. For example, incorporating lower-impact raw materials, or designing products that rely on fewer resources during consumer use, such as high-efficiency appliances. P&G, maker of European laundry brand Ariel, used a detailed LCA to identify that the biggest use of energy (and therefore carbon footprint) was when consumers washed their clothes. This insight helped Ariel prioritize cold-water washing as the No. 1 opportunity to reduce energy use and carbon emissions. The product innovation required superior cleaning technology in cold temperatures to ensure buyers had confidence making the switch.
Inform claims and marketing
When making sustainability claims, communicators need to understand how claims in one phase relate to a product’s total environmental footprint. This helps marketers avoid unintentionally misleading audiences. For example, if Ariel (in the example above) made claims about energy reduction in its manufacturing facility, that could be misleading, because the biggest use of energy happens when consumers wash their clothes. With knowledge of the full life cycle, Ariel marketers would know to be especially careful about how and when they communicate any manufacturing energy improvements because they are a small part of the total impact.
Circularity: The Next Evolution of Life Cycle Thinking
One of the most common and popular applications of life cycle thinking today is the concept of circularity. This idea moves from a linear product life cycle to a circular one. In this model, the end of life feeds into the raw material phase of the next product’s life cycle. Rather than materials going to the landfill, the life cycle becomes an endless loop where materials from the end of one product’s life either feed back into natural systems to support new raw materials (think compost) or are recycled into raw materials for the next phase.
Design plays a critical role in being able to reuse, recycle or compost materials, so product innovation needs to consider end of life upfront. For example, in 2021, Adidas launched its “Made to be Remade” shoe as a product concept. Most shoes cannot be recycled because they are made of dozens of materials including dies, glues, and multiple different types of plastic. Adidas’ shoe was produced from a single material—without any glue or dye—so that it can be fully recycled. They designed a process for customers to return the shoe so it could be ground into pellets and transformed into a new pair. These new types of circular business models require new processes and will take some time to master. Adidas noted about its Made to be Remade program: “One of the main learnings was the need to collaborate with more partners along all steps of the value chain—everything from collection to processing of the used products.” Life cycle thinking gives us the map to begin our journey toward products and services that use less resources and create less waste.
A critical shift takes place when you start thinking about sustainable changes that can be made to your product or business with a life cycle lens. Using this framework is not a silver bullet. There is not always a clear and obvious answer as to which solution is better, because interventions in one area may often have tradeoffs elsewhere. However, adopting this mindset as business leaders allows us to ask more informed questions, forces us to gather more complete data before acting, and inspires new products and business models. As a result, we will be more accurate and transparent when communicating environmental impact.
Stay tuned for our final article in this series on environmental claims: Understanding the Federal Trade Commission Green Guides!
Do you need help applying Life Cycle Thinking principles to your marketing or innovation strategy? We help purpose-driven brands integrate sustainability into their brand strategy.
Unmasking Greenwashing: How to De-Risk Your Brand
In 2016, Keurig launched a recyclable K-Cup pod. Customers were thrilled. Those disposable pods, often the boon of environmentally conscious consumers who love a single cup of coffee, could now be dropped into the recycling bin. An asterisk in small print noted: “Check locally, not recycled in all communities.”
This is the second article in a 4-part series on transparent, accurate environmental claims. All articles in the series include:
Part 1: Beyond the Buzzwords: Why Accurate Environmental Claims Matter
Part 3: Lifecycle Thinking: The Best Tool to Help Brands Master Sustainability
Part 4: Navigating the Green Guides: Valuable Principles for Marketing Claims
Part 2 - Unmasking Greenwashing: How to De-Risk Your Brand
In 2016, Keurig launched a recyclable K-Cup pod. Customers were thrilled. Those disposable pods, often the boon of environmentally conscious consumers who love a single cup of coffee, could now be dropped into the recycling bin. An asterisk in small print noted: “Check locally, not recycled in all communities.”
Source: Keurig
What is your impression when viewing this ad? My assumption is that the pods are recyclable in most communities, including mine (an urban area with a large recycling facility).
In 2018, a plaintiff filed a lawsuit claiming that Keurig’s claims were misleading and that the pods could not be recycled in most communities because they were too small, often contaminated, and not made of a material that was frequently resold (#5).
Keurig countered that it was compliant with the Federal Trade Commission (FTC) environmental claims guidelines because they included a disclaimer noting the pods were not recyclable everywhere. Additionally, Keurig said it had tested the pods with large recycling companies to confirm recyclability.
When judges did not dismiss the case, Keurig settled for $10 million without admitting any wrongdoing.
This Keurig example is an oft-cited one of greenwashing and one that demonstrates the complexity of this issue for businesses.
Interested in training your team on marketing sustainability? This case study illustrates how I helped educate a global media company’s sales team. Reach out to explore how to work together.
What is Greenwashing?
At its core, greenwashing is an accusation of deception. In many cases, accusers claim a company is intentionally using deceptive marketing tactics to create a false sustainability image.
I find this definition of greenwashing overly accusatory and assuming of malintent, so I propose an alternate business-friendly definition:
“Communications that mislead an audience by creating the perception of a better environmental profile than reality.”
Note in both definitions, it’s the “communications” that mislead, whether or not intentional. Call me naive, but I suspect that Keurig business leaders did not sit around a table and brainstorm, “How can we get our customers to think that our pods are recyclable when we know they are not?” Rather, I imagine they knew they had a business and environmental challenge likely believed their solution worked and met the FTC’s environmental claims requirements.
However, I wonder if the Keurig team would have changed its communications had it asked these questions to consumers prior to launch: “What is your impression of the environmental benefit of ad? Do you think you’d be able to recycle these K-Cups in your community? Would you check to see if they are recyclable before you recycle them?”
To identify greenwashing, we must ask ourselves two critical questions:
1) What is the audience perception?
2) Does that perception accurately reflect the product’s environmental attributes?
Whether or not one is in technical compliance with regulations, companies are still at risk of greenwashing if its messaging is perceived as misleading.
Why Does Greenwashing Matter?
It’s illegal to make false environmental claims, and one could be sued, fined, or required to change messaging. Additionally, promoting a product as more environmentally friendly than it is can erode trust and hinder true environmental progress.
As I mentioned in the first article in my series on environmental claims, consumers are increasingly distrustful of environmental claims from products and companies. Only 38% of consumers believe companies when they make these claims, down from 47% just a year earlier. Trust, the backbone of a customer relationship, doesn’t apply to one realm. If consumers distrust your environmental promises, they may discount all messaging. Some companies, like H&M, have recently won legal battles against misleading environmental claims, but the barrage of negative press can damage brand reputation.
True environmental progress requires change. We must be wary of reputational benefits that are purely marketing spin versus those that result from action. Customers seek an actual environmental benefit by purchasing products with environmental attributes. When a company can generate sales without making more extensive improvements, there is less incentive to advance a sustainability agenda. Moreover, misleading messaging can make it difficult for customers to differentiate between businesses that are aggressively reducing their environmental footprint and those that are seeking purely reputational benefits.
Forms of Greenwashing
While the most egregious type of greenwashing is explicitly false or inaccurate claims, there are additional forms that can be perceived as misleading. Here are four common practices, which apply not only to product claims but also to overall brand and campaign messaging, that often arouse accusations of greenwashing. Understanding these practices and how they influence audience perception will help you better detect your greenwashing risk.
Vague and Unsubstantiated Claims
General statements about a product’s environmental profile being good or better for the environment are misleading when they are absolute, not explained, or unsupported by data. Attributes such as biodegradability, composability, and recyclability, even though they seem specific, often need to be qualified to explain when they apply, such as in the Keurig example.
Examples:
Sustainable
Eco-friendly
Biodegradable
Better for the environment
Hiding Negative Impacts
Also called hidden tradeoffs, this type of sustainability messaging disproportionately promotes a smaller, more “environmentally friendly” part of a business, which creates the perception that all aspects of the business are “better for the environment.” The messaging overshadows, or hides, the business’s larger negative footprint. All businesses have a negative environmental footprint to some degree, so it’s important to help the audience understand the relative ratio of impact with respect to the entire business.
Let’s use an example: Imagine that a company promotes a product as being environmentally friendly by focusing on how it’s packaging is now plastic-free. However, 95% of the plastic used is in the product itself—only 5% is in the packaging. It could be misleading to excessively promote a 100% reduction in plastic packaging, when packaging represents only a small portion of total plastic.
A company is particularly vulnerable to hiding negative tradeoffs when its broader industry or business model is widely regarded as detrimental to the environment. Examples include the fashion, oil, and gas industries. In the case of fashion, low cost, high-churn fashion brands draw criticism for disproportionately promoting “sustainable fashion” lines, when operating within an environmentally harmful fast-fashion model. Similarly with oil and gas, companies face backlash when they advertise their renewable energy investments, despite a significant portion—often well over 95%—of their investment and revenue comes from expanding fossil fuel usage. This set of BP advertisements was highly criticized for representing 4% of BP’s energy investments.
Source: Treehugger
Implied Green-ness
This occurs when a brand heavily relies on the color “green” and nature-themed imagery to project a holistic, environmentally friendly image. While the use of green is not inherently problematic, it can potentially exaggerate the perception of environmental commitment that surpasses the brand’s actual practices. Consequently, it becomes crucial to evaluate the impact that imagery and color palette have on the audience to assess whether the overall impression accurately reflects the brand’s environmental initiatives.
Shifting Blame
Messaging that encourages consumer behavior change risks being perceived as trying to leverage an environmentally friendly image without substantial action. Shell, for example, faced criticism for encouraging consumers to reduce their own emissions. A tweet asking, “What are you doing to reduce your own environmental footprint?” resulted in severe backlash and mockery on social media, highlighting Shell’s significant contribution to climate change.
Focusing on consumer behavior in messaging is warranted when a brand creates a new product or service that requires a change in consumer behavior to achieve environmental improvement. An example is Tide Coldwater, a series of products that encourage consumers to wash their clothes in cold water versus hot water. Tide reformulated these products to work effectively in cold water, but the environmental benefit can only be realized if consumers reduce their washing temperature.
How to Avoid Greenwashing and What To Do Instead
To reduce the likelihood of misleading your audience you need to be conscious of the above common practices. A foundational guide to help you is the FTC’s Green Guides, which outline principles for making environmental claims—we’ll dive into these guidelines later on in this series. To avoid greenwashing, you must focus on how your messaging impacts the audience impression with consideration to context, industry familiarity, and the communication itself. There are no set rules for what to do, but the following principles will provide you with a framework to move forward in confidence.
Understand Your footprint
Larger corporations often have a comprehensive understanding of their environmental footprint thanks to teams of people who evaluate supply chain, materials, and manufacturing impacts. For smaller and medium-sized companies, this can be more challenging. Regardless of a company's size, it is crucial to develop an understanding of the material environmental impacts associated with the business. This entails identifying the most significant environmental impacts concerning energy/carbon, water, and waste across the entire lifecycle—from sourcing to consumer use. Gaining insight into the overall footprint provides valuable context for prioritizing environmental improvements and assessing their significance.
We’ll dive deeper into this topic in next month’s article on Lifecycle Thinking!
Validate with Data
Ensure you have validated data and, when possible, third-party certifications to support your messaging. Consumers and stakeholders often do not believe when a company makes its own environmental claims. Support from third parties can significantly increase credibility. Before leveraging claims about your supply chain, using phrases such as “sustainably sourced” or “made with recyclable materials,” gather data and third -party certifications from your suppliers. Company-developed seals and icons are coming under increasing scrutiny and will likely not be permitted in the next round of FTC claims guidance.
Communicate Proportionally
The focus on environmental benefits should be proportional to the magnitude of improvement. Specify what aspect of the product is improved and by how much, without conveying through visuals and broad claims that the entire product is “sustainable.” I love this example of Coca Cola Life, which initially launched with an all-green label and faced backlash of being perceived as a “natural” product when the primary sweetener was sugar. An updated version of the packaging calls out the specific sweeteners, and green covers only a fraction of the package versus the entire label.
Launch Updated
Practice transparency
Be honest and open about your company’s journey, progress, and areas of improvement. Remember: Every company has a negative environmental footprint, and some are working harder than others to reduce that footprint. Business leaders who embrace the challenges they face and communicate transparently about their progress and their shortcomings build more trust among their customer base.
Look at the example below from Patagonia’s website: As of 2021, only 33% of Patagonia’s factories are paying a living wage. My first reaction was not, “Wow, Patagonia is horrible for not paying a living wage to most workers.” Instead, I thought, “If they are willing to admit this, I wonder how much worse it is for other brands who are less transparent?” Counterintuitively, my perception is improved by an admission of imperfection. Additionally, the low statistics in one domain are then balanced by achieving closer to 100% in other focus areas.
Source: Patagonia
Educate your Communicators
Sustainability is a broad and complex topic. Communicators need to become educated about the technical details and the legal requirements, so training is essential. I recently worked with a global media to educate its sales team on what greenwashing is and shared principles on transparent, accurate environmental claims. Read the case study here.
Evaluate Your Perception
Because greenwashing is an allegation of misleading your audience, it’s important to understand whether communications are indeed misleading. The simple way to do this is to ask your audience, whether a consumer, client, investor, or non-profit. If their perception does not line up with your actual footprint, then the message is misleading. Certainly, there may be subjective differences in opinion, but knowing the perception in advance helps you evaluate risk and determine your course of action. Some companies, such as Unilever and Vodaphone have established panels of internal and external sustainability experts to review environmental marketing claims.
As we’ve mentioned earlier, one unfortunate outcome of increasing greenwashing accusations is that companies that are making meaningful progress in sustainability are, at times, afraid to communicate on the topic for fear of getting called out as hypocritical or deceptive. However, customers want to know what brands are doing to improve environmental footprints, and brands that are communicating environmental attributes are outperforming conventional products, as we explored in the first article in this series.
Communication is the only way to share progress. When done with intention, transparency, and an understanding of perception, environmental communications can increase trust, revenue, and accelerate innovation that addresses the world’s most challenging environmental issues.
Stay tuned for the next article on in this series: “Embrace Lifecycle Thinking”!
Beyond the Buzzwords: Why Accurate Environmental Claims Matter
I was recently gifted a reusable, insulated travel mug. The box and informational leaflet included numerous claims of “sustainable,” and “eco-friendly.” Excited and curious, I wondered what made it more sustainable. Were the materials sourced differently than traditional travel mugs?
This article is the first in a series on accurate environmental claims. All articles in this series include:
Part 1: Beyond the Buzzwords: Why Accurate Environmental Claims Matter
Part 3: Lifecycle Thinking: The Best Tool to Help Brands Master Sustainability
Part 4: Navigating the Green Guides: Valuable Principles for Marketing Claims
Part 1: Why Accurate Environmental Claims Matter
I was recently gifted a reusable, insulated travel mug. The box and informational leaflet included numerous claims of “sustainable,” and “eco-friendly.” Excited and curious, I wondered what made it more sustainable. Were the materials sourced differently than traditional travel mugs? Was reusable energy used to manufacture it? Could it be recycled? Was it made with fewer harmful chemicals?
I eventually found an asterisk in small print: “Compared to disposable coffee cups.” Disappointment sunk in. The mission was worthy—to help reduce waste—but without clearly specifying how it was more sustainable, I initially made my own assumptions, namely that its environmental benefits were compared to other reusable mugs, not disposable coffee cups.
Many brands make environmental claims, but they frequently lack specificity, clear comparisons, or validated data. The result is that consumers have become increasingly distrustful of companies that claim to be sustainable. In this article, the first in a four-part series on environmental claims, I explain the importance of accuracy, why business leaders and communicators need to become more educated on the topic of sustainability, and where to begin.
Environmental Claims are Advertising Claims
It’s easy to forget that environmental claims are merely a subset of advertising claims, which are regulated and required to be truthful. The Federal Trade Commission (FTC), which is the legislative body in the U.S. responsible for overseeing marketing and advertising, states:
“Claims must be truthful, cannot be deceptive or unfair, and must be evidence-based.”
Just as we can’t make a false or deceptive claim about product performance, we can’t make one about environmental attributes.
One reason we see so many misleading environmental claims is that it is a complex and technical topic. Those responsible for crafting content (agencies, marketers, business leaders) are rarely well-educated on the topic of sustainability. While most businesses have product experts such as engineers, designers, or scientists to research and validate product performance, companies often lack professionals with sustainability expertise. Even if experts do exist, their knowledge is infrequently translated to those making external claims. The culprit is a lack of knowledge among communicators — not an intentional effort to deceive. But it’s a knowledge gap that’s critical we close.
Pitfalls and Consequences of Green Claims
One consequence of inaccurate environmental claims is that companies are accused of greenwashing—misleading an audience by creating the perception of a better environmental profile than reality.
Examples include advertising an environmental attribute that is vague or unsubstantiated or promoting a part of the business that has environmental improvements when the majority of the business has a huge negative footprint.
Greenwashing is often perceived as intentional, even when it’s not. Consequences range from reputational damage to lawsuits, which can lead to fines and having to remove deceptive advertising. In the second article in this series, we’ll more deeply explore the topic of greenwashing and share examples.
Why Brands Are Jumping On Board
Consumers are becoming more conscious of their role in improving the environment and desire products that have less packaging, are sourced sustainably, and use renewable energy. According to studies by McKinsey and Nielsen IQ, 78% of respondents said they placed importance on a sustainable lifestyle and more than 60% of U.S. consumers said they were willing to spend more money on a product packaged sustainably. When it comes to actual spending, products that made Environmental, Social, and Governance (ESG)-related claims showed stronger cumulative growth from 2018-2022 than those without (28 percent vs. 20 percent cumulative growth, respectively). The chart below shows the difference in compound annual growth rate (CAGR) over this 5-year time period.
Source: McKinsey& Company
Additionally, according to the NYU Stern Center for Sustainable Business’s 2022 Sustainable Market Share Index, “products marketed as sustainable grew ~2x faster than products not marketed as sustainable.” As such, more brands are including environmental attributes in brand communication to capture reputational benefit, address customer desires, and increase sales.
Consumers Increasingly Distrust Environmental Claims
However, with the proliferation of “green” brands and sustainable claims, distrust is growing. According to GreenPrint’s 2022 Business of Sustainability Index, “only 38% believe companies when they make claims on environmental friendliness,” compared to 47 percent in 2021. Interestingly, corporate statements by CEOs and Sustainability Reports are considered particularly untrustworthy at 2% and 14%, respectively.
What’s more, executives agree there’s reason for distrust. Notably, in a global survey of executives by The Harris Poll for Google Cloud, 58% of business leaders said their organizations have “overstated their sustainability efforts.” Clearly, this is an issue we need to address. But how?
To build consumer trust, we need to ensure we are accurate and transparent in the ways in which our products and services improve or reduce environmental harm.
Moreover, to actually improve the environment and reduce our negative impact, we need to ensure that we are making meaningful improvements rather than simply capitalizing on perceived impact.
Where to Begin: No Product is “More Sustainable”
As a business leader and consumer, you may be surprised to learn that brands can’t claim a product is more sustainable. Sustainability attributes are specific, complex, and relative. Think of it this way: More sustainable compared to what?
Consider the claim that a product is “better.” We all know to ask: Better how? Is it cheaper? Faster? More Durable? Easier to use? Safer? Better is so broad and vague—and at this point, overused—that it’s essentially unhelpful because it doesn’t give customers the information they need to make an informed purchase decision.
Similarly, “more sustainable” is broad and vague. Is it less energy? Less waste? Less water? Fewer materials? And compared to what? Most brands rely on the customer perception that sustainability is a linear spectrum that ranges from “bad for the environment” to “good for the environment,” where the latter equals “sustainable.” The reality is that sustainability is a complex matrix of attributes that constantly changes based on the frame of reference. A foundational concept to help understand the environmental impact of a product is life cycle thinking. In the third article in this series, I’ll explain this concept and how it can help you understand the nuances of communicating sustainability clearly.
Because there is no simple answer on what is “more sustainable” and consumers don’t realize this, the FTC prohibits companies from making general environmental claims like “sustainable” or “better for the environment” without clearly specifying a particular attribute supported by science-based evidence.” The FTC states: “It is deceptive to misrepresent, directly or by implication, that a product, package, or service offers a general environmental benefit. In the fourth article in this series, we’ll dive into the “Green Guides,” the FTC’s guidance on environmental claims.
Future Articles in this Series will focus on:
Part 2: Unmasking Greenwashing: Explore the concept, learn from real examples, and discover strategies to steer clear of deceptive environmental claims
Part 3: Embracing Life-Cycle Thinking: Explore how to evaluate a product’s environmental impacts across its entire life cycle, empowering you to make informed and transparent sustainability claims
Part 4: Navigating FTC's Green Guides: Uncover the essentials of the Federal Trade Commission’s guidelines, ensuring your business crafts truthful and transparent environmental claims while sidestepping potential pitfalls.
Stay Tuned for Next Month’s Article on Unmasking Greenwashing!
How to Begin Your Circularity Journey
We are collectively living as though there are 1.7 earths. By 2030 it will be 2 earths. Circularity may be the way forward.
We are collectively living as though there are 1.7 earths. By 2030 it will be 2 earths. It’s no surprise this level of consumption is unsustainable, but there remains a debate on how we are going to collectively solve this problem. Whether you’re a sustainability guru or not, the market is demanding that businesses evolve to remain relevant, profitable, limit the impact of regulation, and address customer needs.
One of today’s central sustainability themes is the circular economy. Now becoming a more mainstream concept, term circular economy describes an economic system that has no waste or emissions, keeps products and materials in use, and regenerates natural systems. What many businesses have enthusiastically embraced is the $4.5 trillion opportunity it presents. While it may be hard to conceive how this concept can equate to 20% of US GDP, eliminating waste, it turns out, is pretty big business. And we have a lot of waste. Like the 40% of food that is thrown away each year.
Imagine if products or packaging were endlessly reused, if supply chains were perfectly efficient, or if all natural resources were regenerated. When we can recover and reuse the materials, nutrients, and energy that power our world, all of that can be reinvested, fueling tremendous economic growth.
But where does a company begin?
Here are 3 insights from those already making progress:
It’s a journey, so take baby steps
When we live in a world that is single-use oriented, one that is designed to maximize consumption and disposal, it’s hard to envision a different way. The first step is simply to take a first step. Target has begun to explore ways of making it’s business model more circular by using Lifecycle Analysis to optimize store signage, and implementing a popular carseat trade-in program. They have admitted that it was almost overwhelming to design a truly circular economy, given their current business model, but they are working to define what “circular” means for Target innovation and operations.
A more closed loop approach has been adopted by Adidas, who recently launched its FUTURECRAFT.LOOP shoe, which is made from a single material (reusable TPU) so that it can be a fully recycled. Customers return the shoe, which is ground into pellets and eventually transformed into a new one. However Adidas didn't start with such a complicated technical challenge. They have been learning how to design a more circular approach since 2017, when the company produced 1 million shoes made from recycled ocean plastic in the Adidas x Parlay line. Sales were so strong that Adidas made 5 million in 2018 and have committed to 11 million pairs in 2019.
Image Source: Adidas
Eileen Fisher is generating sales on slightly damaged inventory through a “not so perfect” offering, a concept that unexpectedly attracted a new set of price conscious customers who are unable to afford their full price clothing. The progressive clothing manufacturer has also been incentivizing shoppers to return used clothing since 2009 through it’s RENEW program, either reselling the clothing or recycling the fabric for future designs.
Image Source: Eileenfisher.com
Design your innovation to be irresistible
An essential component of success with any innovation, especially sustainable or circular, is making it irresistible. This can be challenging for sustainable solutions because they must fight the commonly held perception of being less effective, inefficient, or more complicated. As William McDonough, one of the fathers of the circular economy, said, “The circular economy should be a better alternative, not a sacrifice.”
Loop, a TerraCycle project, is bringing back the milkman concept by providing popular brands in reusable packaging delivered to the home. “People sign up because it’s no waste, but they stay because of the premium experience. Its thoughtful, delightful,” said Virginie Helias, Chief Sustainability Officer of Procter & Gamble. The program is still in pilot phase, having just launched in Paris and New York, but the participating companies informally said that the initial results (albeit 2 weeks of them) were promising.
Image Source: loopstore.com
Plant-based meat is no longer an oxymoron thanks to Beyond Meat and Impossible Foods. After decades of “tasteless” veggie burgers or an entire portabella mushroom sadly attempting to substitute for a beef burger, these companies have designed against the promise of parity to meat on all fronts, except the carbon footprint. “If you don’t have a product that’s just as delicious and craveable as meat from cows, you’re not even allowed to play in this space,” said Rachel Konrad of Impossible Foods.
With ~90% reduction in carbon footprint vs. beef, these plant-based protein companies are committed to making global food consumption more sustainable. The skyrocketing stock price of Beyond Meat after going public last month and the recent $300 million investment round for Impossible Foods seem evidence enough that the product is irresistible, and so is it's equity.
Image Source: Impossible Foods
Crowd Source Your Innovation
BigCo’s are eager to capitalize on the potential of circular models, but recognize they often struggle with in-house innovation. This challenges represents a growing opportunity for startups and smaller companies to partner with larger organizations to deliver innovative solutions. Google and SAP have launched the Circular Economy 2030 Challenge that provides funding, services and mentorship to businesses with a revenue generating idea that advances a circular economy (and also uses Google Cloud and SAP services).
Meanwhile BASF created the Circularity Challenge, a six month accelerator for startups to enable a circular economy, focusing on plastics, energy storage, and recycling value chains. These companies are recognizing that good ideas can come from anywhere, not just organizations with million dollar R&D budgets, and they are actively searching for transformative solutions from around the world.
Image Source: BASF.com
While sustainable innovation can be viewed by some as an additional expense or a less profitable investment, the circular economy is already fertile ground for disruption. It requires new business models, new behaviors, and new cultural norms. However, companies must challenge the status quo and start asking new questions to advance. When they do, there is ample room for growth and good.
4 Reasons Your Company's "Good" Should be Part of Your Core Business
Frederick Buechner asked: “At what points do my talents and deep gladness meet the world’s deep need?” This is a great question to pose when searching for personal purpose, but it also applies to brands and companies.
Frederick Buechner asked: “At what points do my talents and deep gladness meet the world’s deep need?” This is a great question to pose when searching for personal purpose, but it also applies to brands and companies. Said another way from a business lens:
“At what points do our core competencies meet the world’s deep need?”
There is growing pressure on businesses to have a positive social and environmental impact. Consumers are voting with their wallets and their employment decisions for companies that serve society in addition to the bottom line. Governments continue to legislate on issues such as the environment, privacy, ingredients, and worker rights.
A common approach to address this call for action is to continue business as usual, and identify a separate set of social responsibility or environmental programs, establish a charitable giving program, or advocate for popular political point of view. While these approaches have merit in certain circumstances, they often ignore the most significant contribution a company can make to society—through its core business.
While it may seem obvious that the positive social and environmental impact a company has should be connected to its core business, I have seen many companies and brands invest in efforts that are not strategically tied to their products or operations. This Colbert Report clip (starting at 1:15) parodies the causes corporations support that seem disconnected from their business. At best it’s a missed opportunity for social and business impact, at worst it invites criticism of hypocrisy and growing backlash.
Here are 4 reasons we should focus a company’s “doing good” on the core business:
1) It’s Authentic
In an age of corporate distrust, where some consumers expect that companies are trying to get a quick win through a “do good” gimmick, helping through your core business is an intuitive fit. UPS donates shipping and logistics expertise during natural disasters. PetSmart promotes adoption of pets. Marriott trains employees to watch for signs of human trafficking in their hotel rooms.
Everlane, an e-commerce fashion brand, has made “ethical sourcing” part of its tagline. In an industry known for sourcing low wage labor in developing countries, Everlane shares the factory name where each item is produced, with extensive information and photos on each facility.
[Image source: Everlane.com]
On the flip side, many brands “go pink” during October in support of Breast Cancer. While raising money to support research for this disease is a noble cause, it’s easy to question brands’ motivations that have nothing to do with women or health.
Many companies are also taking political stances that don’t have a clear connection to their business. While leadership might feel they have a moral obligation to support a particular issue, I wonder if their voice is best used in that way or could rather advocate for needed change in their own industry.
2) It Motivates Employees
Much research has been done on the best ways to motivate employees, with growing evidence showing that the external motivators of bonuses and perks can be short-lived. Daniel Pink argues in his book Drive that the three most important motivators are autonomy, mastery, and purpose. He defines purpose as, “the yearning to do what we do in the service of something larger than ourselves.”
In order to successfully give employees a sense of purpose, it has to be about their core work. An annual employee volunteering day or the existence of a separate corporate foundation run by a handful of employees will not suffice. Each employee must understand how their daily work helps contribute to something meaningful and valuable.
A simple way companies can elevate the value of their core business with employees is through skills-based volunteering. Many firms such as IBM, Fidelity, and Deloitte, donate technology expertise and consulting services to nonprofits or communities who could never otherwise afford them. One of the biggest reasons these organizations continue such programs is not the social impact, it’s the leadership development the programs create for employees who participate.
[Image Source: IBM Service Corps]
Creative agencies often take pro bono work for nonprofits to help with issue advocacy and fundraising. When employees are doing their primary job in service of an under-resourced population, it creates a greater sense of purpose for their work. In turn, companies see higher employee satisfaction and higher retention. A friend who owns a small business told me he has approximately 2X longer employee retention because of his skills-based pro bono program. It works for the community and for his business.
3) It Builds Reputation and Loyalty Among Customers
Any buyer of TOMS shoes or Warby Parker eyewear knows that part of their purchase helps provide footwear and eyeglasses, respectively, to people in developing countries. These brands have been built around a business model that provides the same benefit to paying customers as those in need.
For 30 years, Annie’s has sold organic food, backed by a company mission of helping grow the volume of organic crops farmed nationally. Patagonia, a brand that stands for experiencing the rugged outdoors, has innovated with more responsible sourcing for over two decades, and products today are produced from nearly 70% recycled or renewable fiber. For four years, REI has shut its doors on Black Friday to give employees and customers a chance to #optoutside.
[Image Source: REI.com]
Each of these brands have a devoted following because they have remained committed to their core mission. Importantly, the brands’ product offerings and company actions seamlessly integrate product benefits with “doing good,” making the two inseparable.
According to the 2018 Edelman Earned Brand study, 64% of consumers self-report as “belief-driven” buyers, expressing both hope and confidence that brands can address society’s social ills. But the brands that do this most effectively are those that integrate their beliefs and social good into the core strategy and identity of the brand.
4) It Does the Greatest Good
While the prior three reasons might seem to serve the company’s self-interest, the final one is about social interest. Companies are uniquely positioned to use their own innovation and expertise to solve social problems that only they or their industry can address. I would argue the pharmaceutical industry’s greatest contribution to society’s challenges isn't what their cash can do, it’s their drugs to populations that can’t afford them.
P&G, Nestlé, Unilever, Pepsi partnered on Loop, an e-commerce delivery service with reusable packaging, demonstrating a significant effort to address the massive issue of single-use plastic waste around the world. These are problems that the industry itself played a large part in creating. Many would say that they have a responsibility to solve, but they also might be the best ones to help solve.
[Image Source: Greenbiz]
There are many companies making important progress in integrating social impact into their core business strategy. However, even the prevailing concept of “giving back” assumes that business has “taken” something. My hope is that we continue turn our efforts of giving back to our core business, so that eventually business itself can be seen as “giving” through its primary goods, services and operations.
Importantly, this is not a selfless exercise on behalf of companies. What works for society also must work for business, as they too must benefit from their efforts. The exciting part is that GOOD business is also good BUSINESS.
5 Insights Every Brand Should Know about the Sustainable Shopper
We’ve all heard that customers prefer sustainable products and will pay more for them, but what does the sales data actually tell us? Let’s dive in.
I recently attended Nielsen’s 2019 Sustainable Shopper webinar. In a space where data is often claimed, it can be hard to know whether consumers actually behave the way they intend when it comes to “doing good.” In this case, it’s real sales data, so we can gather insights from the way consumers actually behaved.
Here are my top 5 takeaways:
1) Sustainability benefits are mainstream and outperform conventional products by A LOT
While we may qualitatively sense that there are increasing volumes of products with sustainability attributes, it can be hard to tell if these products outperform those without. The Nielsen shopper data shows that products with “sustainability” claims, along with those that have no artificial ingredients and clean label, show significant sales increases vs. year ago compared with conventional products. Specifically, we see 5.8% growth for those sustainability benefits compared with 0.4% of conventional products. That’s ~14X higher growth rate.
If we look at multi-year trends since 2014, sustainable product sales have grown by nearly 20%. The compound average growth rate (CAGR) of these products is four points higher larger than conventional products (3.5% vs -1.0% comparatively) (1).
One might dismiss this growth rate by assuming it was on a tiny base, which might make it easier to deliver bigger growth, however, I found the following slide on Nielsen’s website showing that sustainable products now make up over 22% of store sales, according to 2017 data. That’s not a tiny base. Sustainability has arrived, and the growth rate is real.
2) There is no 1-size-fits-all sustainability benefit
The breadth and diversity of sustainability benefits are increasing. Nielsen categorized the claims across 6 sectors: social responsibility, sustainable farming, sustainable resource management, sustainable seafood, sustainable packaging, and animal welfare. These categories do not even include the charitable giving space of financial donations generated by product sales.
While some benefits are seeing significant sales growth, notably “sustainable fishing” (+27%), “free range” (+16%), and “B-Corp” (+15%), others are seeing declines, such as “less packaging” (-7%) and “farm raised” (-3%).
While consumers previously may have viewed the space as a monolithic “better for the planet” benefit, consumers are becoming more knowledgeable about the specific attributes they want to purchase in their products. The mere existence of a sustainability claim does not guarantee the average sales trends, so one has to diver deeper on specific benefits consumers desire within the broad sustainability space.
These sustainability benefits vary in how much they deliver personal benefits for the consumer, environmental benefits and social benefits. When a company can deliver both personal and "better for the world," there is a sweet spot of social impact and business opportunity.
3) Consider category purchase drivers when identifying sustainability benefits
Even within specific sustainability attributes, brands have to evaluate category specific trends and purchase drivers for their current and future product offerings. While certain sustainability topics might dominate the current media, such as reduction of single use plastics, these are not necessarily the best ones to pursue for your brand. First, because those issues might not be a brand's biggest environmental impact, and secondly, because benefits have vastly different rates of sales growth across categories.
In grocery we see significant growth among organic, and clean label products, whereas in beauty and personal care there is a greater emphasis on paraben-free claims.
The slide below further demonstrates the variation a single attribute can deliver across a variety of categories. We see the sales growth of products with “fair trade” compared with total category sales across 4 categories. In Nutrition Bars, Coconut Water, and Supplements, “fair trade” significantly outperforms the category, whereas in Ice Cream, “fair trade” under-performs the category.
Product benefits, combined with the perception of supply chains, environmental impact, health, and product safety, and all affect how consumers perceive the value of different sustainability benefits across categories.
4) Ingredient related claims see some of the highest high growth rates, not just among food and beverage categories
Some of the highest growth rates among sustainability products are for ingredient related claims. A core reason ingredients are becoming more important as primary product benefit is the consumer link to both health and product safety. A recent study showed that recalls of hazardous meat and poultry were up 83% since 2013, providing legitimacy to concerns around product safety.
While the importance of ingredients might seem intuitive for products that are consumed, the trend is just as notable in many cases for personal care and beauty products. In slide 22 shown above, we see that ~60% of cosmetics and facial skin care are “paraben-free,” which means the lack of these ingredients is essentially becoming price of entry in those categories.
We also see in vitamins, minerals, and supplements as well as in personal care that show ingredient related growth rates from ~8-25% compared with conventional products.
5) The Sustainable shopper is urban, affluent, well-educated and often has young children
This data has remained relatively consistent for some time, and is largely driven by the Millennial generation. While it may be that these consumers have historically had more access to products with sustainability benefits on the coasts, the trend seems to be moving inward, according to commentary in the webinar, with cities like Chicago and Cincinnati showing increasing consumption of these products.
For companies, one of the benefits about this consumer is that they are more affluent, which means that brands can be confident in being able to charge a premium for sustainability benefits if they are perceived as relevant for the category. Sustainability attributes should be a primary consideration as brands establish their innovation pipeline for the next 3-5 years.
Even though I’m a big fan of sales data, I couldn’t resist including a couple of relevant insights from the claimed data.
6) Link Sustainability claims to premium factors (i.e. attributes that consumers will pay more for)
One of the challenges with making sustainability claims, is that it actually increases the cost of goods to deliver those products. It may be that sustainably-sourced ingredients are more expensive, or the manufacturing process is more complex or runs smaller volumes, or perhaps a 3rd party certification incurs additional costs.
An essential business strategy to offset these costs is to increase prices, but if consumers are unwilling to pay for higher prices, then delivering sustainable products may not be financially viable. That’s why brands need to deliver sustainability benefits that are associated with factors that consumers will pay higher prices for.
Consistent with most product attribute data, the two biggest premium factors are Quality/Safety and Superior Function or Performance (49% and 46%, respectively, of consumers were willing to pay more for these benefits. Frankly, I’m surprised we’re not seeing even higher numbers than that.) Increasingly consumers are associating sustainability attributes like organic, or antibiotic-free with these premium factors.
7) The US lags developing countries when it comes to demand for corporate environmental practices
In a list of the top 11 countries where consumers say it’s important for companies to improve the environment, the US don’t make the list. Not by a long shot. All 11 are developing countries, with responses ranging from 92-97%. The US is at 68% (this data point is pulled from a separate Nielsen deck). One of the primary reasons cited for this variation is the visibility of negative environmental impacts due to lack of environmental regulation, such as no formal waste management processes, and higher water and air pollution.
For global companies that develop their innovation in the US and export it to other countries, they may be missing an opportunity to capitalize on the even greater relevance of sustainability in developing countries.
It’s exciting to see that products with sustainable benefits continue to outperform conventional products. The brands that understand consumers preferences by category, and innovate to understand the link between environmental, social and personal benefits, have an opportunity to be differentiated in the marketplace. With over 22% of products now considered to have some kind of “sustainability” benefit, it’s become a crowded marketplace, and that demand will continue to increase.
Consumers are becoming more informed and more savvy about the specific benefits they want by category. The time is now to innovate for the sustainable consumer, because soon, we will just call her the consumer.
(1) - https://www.nielsen.com/us/en/insights/news/2018/was-2018-the-year-of-the-influential-sustainable-consumer.html