Strategy

Environment: Green counting

Procter & Gamble learns the hard way that it isn’t easy trying to be more eco-friendly.

Marketing a “green” message is tough these days. Consumers are cynical, and watchdog groups, such as EnviroMedia’s Greenwashing Index, an online forum that critiques and ranks the eco-friendly claims in advertisements, are ever-vigilant. And companies in Canada now have to contend with guidelines for marketing environmental messages recently released by the Competition Bureau and the Canadian Standards Authority.

It’s true that the greenest consumers are likely to be the most suspicious about a company’s claims, but an even greater obstacle is that most people just don’t care all that much — at least, not enough to shell out more money for a greener product. Research from Procter & Gamble shows that only 10% of North American consumers will accept a trade-off — such as a higher price or performance decrease — for an environmental benefit. Three-quarters will not accept any trade-off whatsoever. “We’re about making a meaningful difference in sustainability in terms of our products, so we target the mainstream consumer,” says Len Sauers, P&G’s vice-president of global sustainability.

As a result, the consumer-products giant is focused on developing what Sauers calls “sustainable innovation products,” those that are better for the environment than their predecessors, but come in at about the same price and quality. P&G plans to develop and market at least US$20-billion worth of such products over the next five years. It’s already selling Charmin toilet paper and Bounty paper towels with more sheets per roll to reduce waste, as well as Tide Coldwater laundry detergent to cut down on hot-water use. But these products are primarily sold to consumers based on their cost savings, not their environmental benefits.

“The strategy of having environmentally friendly attributes without making a big fuss about it is actually a fairly sensible one, because it doesn’t illicit a negative response,” says Eileen Fischer, a marketing professor at York University’s Schulich School of Business in Toronto. “It’s very hard for something to be truly environmentally neutral, and people who are the most sensitive to environmental claims know that.”

P&G won’t disclose sales figures for any of its products, but Lee Bansil, director of external relations for P&G Canada, says the company is pleased with how consumers are responding to its more sustainable offerings.

That hasn’t always been the case. Around 10 years ago, the company launched a granular compacted laundry detergent in North America. It had the same cleaning power, but required only half the amount of powder, cutting down on packaging. The products bombed. “They didn’t work to the point that it had a significant impact on our business,” Bansil says. Consumers didn’t quite understand the benefits. “We all grow up in a society where we have the doctrine that bigger is better,” Bansil adds.

P&G pulled the detergents from the shelves entirely and only began reintroducing them earlier this year, after first forming and consulting with an expert advisory panel consisting of sustainability thought leaders. Surprisingly, for Bansil, the panel said that simply having an environmental benefit isn’t enough to encourage a shift in consumer behaviour.

“We didn’t necessarily make the product better before,” Bansil says. “This time around one of the big differences was the product was greatly improved. It wasn’t just compacted; it was actually a better cleaning product.” P&G also began a non-branded awareness campaign about the benefits of compacted detergent a full year before relaunching it in North America.

The company’s sustainability efforts are not entirely altruistic, however. P&G still sells the regular granular version of its detergent, along with the traditional varieties of Charmin and Bounty. “That’s what the consumers tell us they want,” Bansil says, adding the company is looking at more opportunities to reduce its packaging.

Ultimately, P&G is not going to do anything to hurt its bottom line. A slide in a company PowerPoint presentation on sustainability says it best: “When it comes to Sustainability, the consumer is boss.”