Appeal of 'green products' growing despite recession -- survey

Greenwire, 21 January 2009 - "Green products" became more popular last year, according to a new survey by researchers who see the trend continuing despite the sharp global economic downturn.

The Boston Consulting Group survey of some 9,000 consumers in East Asia, Europe and North America found that more shoppers deliberately sought and bought green products in 2008 than in the year before. Their research also suggests consumers are becoming more willing to pay higher prices for green products than they were in the past.

Overall, 34 percent of those surveyed said they "systematically look for and purchase green products," up from 32 percent in 2007. And 24 percent said the higher price premium for buying green is acceptable, up from just 20 percent the year before.

The findings, published yesterday in the group's new report, "Capturing the Green Advantage for Consumer Companies," is good news for companies selling eco-friendly products. Seventy-five percent of consumers surveyed said that it is important or very important for companies to provide information on the environmental impacts of their products, and 66 percent said companies should routinely offer green products.

Health and safety concerns still trump the environment with shoppers. Eighty-one percent said companies should spell out their goods' risks and safety issues. But that does not necessarily bode ill for green products, say report co-authors Felix Muennich and Catherine Roche, researchers with BCG offices in Germany.

"Green is also a proxy for health and safety in many products (e.g. foods, skin creams, children's toys) and that will continue to be something that consumers are concerned about when shopping," they said in an e-mail.

The group questioned 9,000 adults between the ages of 18 and 65 in the United States, Canada, Germany, France, Italy, Spain, Japan and China in face-to-face interviews in major cities. In national comparisons, Europeans ranked among the most environmentally conscious consumers, while East Asians ranked among the least.

About 34 percent of Europeans said last year that they routinely sought green products. Italians topped the chart, with 20 percent saying they actively seek green products, compared to only 15 percent in the United Kingdom, the lowest proportion for the region.

Sixteen percent of U.S. consumers last year reported being "systematic shoppers of green products," compared to just 11 percent of Japanese.

Most popular goods

Worldwide, the most popular green or perceived green products seem to be organic food and environmentally friendly household cleaners. Health concerns may explain why these goods are bought at a greater frequency than other green items.

The report says companies may stand a better chance of marketing green goods, especially food and cosmetics, if they can convince shoppers that their products are of higher quality and better for their health. The survey shows most consumers already believe that green products are generally of better quality than mainstream products.

The report also suggests that households worldwide are taking care to be more environmentally friendly, at least in inexpensive ways. About 75 percent said they shut off appliances that are not in use to save electricity, recycle waste or reuse products as often as possible. A little more than 50 percent reported that they strive to use their cars as little as possible now, but about 80 percent say they will work to do so in the future.

Among the least common consumer green practices today include eco-friendly investing and owning hybrid vehicles. Only about 7 percent report owning a hybrid car, while a little more than 10 percent say they invest in environmentally friendly funds.

Many industry watchers question whether buying for the environment will continue to grow in popularity as the United States, Europe and Japan enter deep recessions. Most past studies of consumer green sentiment found shoppers willing to purchase green products only if it did not cost them much more.

Indeed, this latest study shows that, even though shoppers say they are willing to pay more for green goods, companies can charge only about 5 percent to 10 percent more for such products before their popularity begins to slip fast.

Still, researchers say their overall findings leave them confident that the green product industry should weather the current financial storm nicely.

"We expect appeal to remain strong," they said. "But one caveat -- consumer willingness to pay large price premiums for green products is constrained even in good times and will likely be more so in a downturn climate."

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