Concern for environmentally friendly products in supermarkets is starting to take hold on the nonfood side of the store in a big way.
While items like compact fluorescent lightbulbs and rechargeable batteries now are prominent in their categories, consumers also are shying away from more chemical-laden products like pesticides, and becoming more careful about flea and tick products for their pets, as well as with health remedies such as those for coughs and colds. Nonfood Center Store items like cleaning products have seen similar changes in shopper preferences.
One issue could derail the trend: If the replacement natural products are not as effective as the old ones, or at least not close, customers will return to their former preferences, sources told SN.
Soon, the initiative of Wal-Mart Stores, Bentonville, Ark., to reduce packaging will be felt in supermarkets, while consumers are becoming increasingly aware of the presence of recycled and recyclable goods and packaging.
“The customer is very in tune with recycling. There's definitely a demand for that as people understand that's a way of protecting resources,” said a nonfood executive with a Midwestern retailer.
“We are clearly looking in that direction and I think we'll be very sensitive to all the chemicals — what products are made out of — more than we've been in the past,” the executive said.
There is a trend away from pesticides and rodenticides, and increasing sales of live-catch traps that, for example, allow the release of mice after they are caught, and DEET-free insect repellents, noted Doug Barnett, director of GM/HBC, Brookshire Brothers, Lufkin, Texas. “People are worried about the environment, and worried about what they are putting on their kids.”
This is taking place across many categories of general merchandise and health and beauty care. “People are looking at naturals and organics,” he said.
While the retailer has stocked natural flea sprays and collars for pets, they have not seen significant consumer acceptance, Barnett said. “We haven't seen efficacy as good as the older products. The manufacturers are going to have to step up and produce a little bit better-quality product that people trust and know it's going to kill the fleas immediately instead of maybe putting out a smell that scares them away for a day or so,” he said.
GIVING GREEN A CHANCE
“People are starting to make purchase decisions based on sustainability and green living,” said David Lockwood, director, U.S. research, Mintel Reports, Mintel International Group, Chicago. This is still in the early stages, he said, “but we are at the point where people are willing to listen and willing to try.”
The Strategic Planner of ACNielsen, Schaumburg, Ill., shows a wide ranging decline in dollar sales in the insecticide categories, yet some subcategories showed a renewed increase for the 52 weeks ending Feb. 24, 2007, after several declining years, perhaps reflecting consumer dissatisfaction with replacement products. This is for the food, drug and mass merchandiser channels, excluding Wal-Mart. Overall, total insecticides and repellents were down 2.3% for the most recent period, following declines of 6.2% as of Feb. 25, 2006, and 3.8% as of Feb. 26, 2005.
Some subcategories showing growth after periods of decline were insecticide ant and roach powder, up 4.8% as of Feb. 24, 2007, following declines of 12% in 2006 and 7.4% in 2005; and rodenticides, up 8.1% in 2007, after dropping 7.4% in 2006 and 3.1% in 2005. Notably, mouse, rat and vole traps have seen two years of decreases in food, drug and mass, following two years of increases. Overall, rodenticides declined 10% over four years, while the traps increased 12% in the same period.
Similar trends are in evidence in pet care products, according to ACNielsen. Flea and tick products rose 1.2% as of Feb. 24, 2007, after dropping 16.2% in 2006, but increasing 1.6% in 2005. External pet treatments went up 17.8% in 2007, following a decline of 22.3% in 2006 and 1.8% in 2005.
As a relatively new area, tracking sales of related natural products is difficult, although SPINS, a market research and consulting firm for the natural products industry based in Schaumburg, Ill., showed an overall 47.6% increase in dollar sales for pet food and pet care in food, drug and mass merchandisers, excluding Wal-Mart and club stores, for the 52 weeks ending Feb. 25, 2007. For the same period ending in February 2006, sales went up 87.5%. Subcategory pet personal and body care rose 35.7% in 2007 and 65.7% in 2006.
GROWING UP GREEN
“The 20- to 30-somethings of today grew up watching ‘Captain Planet,’ while making sure not to commingle their fibers and plastics in the recycling bin,” said Vinnie Hernandez, product library operations lead, SPINS. “It's no wonder as they enter the marketplace, that this eco-educated group has different purchasing habits than the prior generations.”
The popularity of the Al Gore movie, “An Inconvenient Truth,” has fueled this awareness, he noted. “Petroleum-based, environmentally unsound products have lost their appeal,” Hernandez said.
Product efficacy remains important, but all things being equal, green attributes add to an item's attractiveness to many consumers, he noted. As a rule, consumers are always looking for better products, he said, and “this has not changed, but the definition of a better product has changed. A better product now is something that is organic, all-natural, biodegradable, all the while making brighter brights. Our definition of better now includes better for the environment, better for health and better for the world at large,” Hernandez said.
“There's definitely a healthy, ‘better for you’ movement going on in this country,” said Dan Raftery, president, Raftery Resource Network, Antioch, Ill. However, he confirmed, the new green products have to prove their effectiveness. “If they switch from one cleaning agent to another because of their political inclinations, they will likely switch back if the products don't work.”
In the nonfood product categories, there are two aspects to sustainability, he said. “One is the product and the other is the packaging. Regarding the product, if it's better for you and better for the environment, that's the way to go, but it has to work vs. the comparable item that isn't as good for the environment, and it can't cost too much more.”
In packaging, “the new direction is some of the corn-based plastics that have the ability to biodegrade better than the petroleum-based materials. You can market that,” Raftery said.
Mintel research has found that 12% of consumers surveyed buy green products “regularly,” 68% “sometimes” and 20% “never,” Lockwood reported. To a significant extent, selling these items requires a marketing effort to reach the more casual buyers of the environmentally friendly products. “You do have that 12% who are always looking for these kind of items, [but otherwise,] it has to be explained that it is a sustainable item, and believably so,” he said.
Among other findings of Mintel's “Green Living” research report from last fall:
49% of consumers said there are not enough products available to live completely green.
41% said they weren't sure if the grocery stores they shop in carried green products.
There was a 29% increase in natural/organic body care products from 2003 to 2005.
There was a 22.4% increase in natural/organic general merchandise for that same period.
Getting retailers, wholesalers manufacturers and other suppliers to put more resources behind environmentally sensitive products may require the prompting of trade associations, said two leading executives during the recent International Home & Housewares Show in Chicago.
“Consumer preferences are beginning to shift towards a greener, healthier lifestyle,” said David McConnell, president and chief executive officer, GMDC, Colorado Springs. “There are a number of categories that could be negatively impacted if we don't move forward in a judicious manner, because people are paying attention.”
He cited the request from Wal-Mart Stores, Bentonville, Ark., for manufacturers to reduce packaging by 5%. “That's an important issue for a lot of the small general merchandise and health and beauty care manufacturers out there in the business today,” he said.
As a result, McConnell said he is making alliances. “I'm going to try to work more closely with other associations, and make sure there's a common voice about sustainability, and that GMDC is part of that common voice,” he said.
At the International Housewares Association, Rosemont, Ill., Perry Reynolds, vice president, marketing and trade development, said, “It is my opinion and, I think, the opinion of the association, that sustainability is an issue that we're going to pay significantly more attention to over the next several years. As it becomes an issue within the industry, we will do what we can to make certain that we are in step with what consumers are looking for.”
At the Housewares Show, sustainability issues were secondary to talk about design and color, but there were exhibitors with products in the lighting and chemical categories. In addition, energy efficiency is a big factor for appliances. “It has been important in major appliances for a number of years now, and small appliances are moving in that direction as well,” Reynolds said.