GreenSage E-zine 06/2008

Are You Experiencing "Greenwashing Washout"?

LOHAS research shows that corporate sustainability messaging is not breaking through the clutter in consumers' lives. For those of you who are unfamiliar with the term, LOHAS is an acronym for Lifestyles Of Health And Sustainability. This term is used to describe an integrated, rapidly growing market for goods and services that appeal to consumers who have a meaningful sense of environmental and social responsibility and incorporate those values into their purchase decisions.

Natural Marketing Institute (NMI), a leading provider of strategic consulting, consumer insights and market research services for the health, wellness and sustainability marketplace, recently expanded upon key findings from their 2007 LOHAS Consumer Trends Database™.

New to this year’s report are four major insights NMI observes in the LOHAS marketplace. These trends affect every industry, and it would behoove readers to give them pause and consider the applications to their own business. They are:
1. From Purchaser to Participant
2. Sustainable Style
3. Shades of Green for Everyone
4. Greenwashing Washout

Each of the above trends is explained and referenced throughout the report.

NMI continues to believe that the LOHAS marketplace is very opportunistic and will remain so for the foreseeable future. That said, the time for corporate action is now. Sustainability concerns are unlikely to diminish over the coming years, and ignoring this trend only gives your competition more time to establish market leadership. Alternatively, understanding what the trends mean to a business and brand allows an organization to frame the conversation with its consumers and/or customers and capitalize on this exciting market transformation. It may be necessary to start small, but doing so is critical for long-term business sustainability.

While leadership brands across a variety of industries have been a galvanizing platform for consumers to initially understand corporate sustainability, the future of the green movement will require a new level of sophistication and clarity as consumers increasingly discern between those companies that are truly sincere versus those that are perceived as participating for superficial reasons.

According to NMI Managing Partner Steve French, "While numerous companies are attempting to gain credibility as good corporate citizens, consumers are overwhelmed by the myriad of communications and are, at times, unable to distinguish the legitimacy. Some companies who are doing relatively little with respect to Corporate Social Responsibility (CSR) are perceived as just as responsible as those spending millions of dollars incorporating sustainability into their businesses."

Simultaneously, many consumers remain contemptuous about the sincerity of corporate action and look for credible, third party proof of the claims companies make. Look no further than a brand such as Herbal Essence® compared to Estee Lauder's Origins brand to see the value of third party claims in proving benefits to consumers. Lack of credibility and trustworthiness will continue to cause confusion and blurring in consumers minds, and if it goes unchecked, could undermine the LOHAS revolution currently underway. Simultaneously, CSR messaging must be more meaningful, memorable, and relevant to consumers to have an impact.

More insight on this subject can be found in NMI's sixth edition report series: Understanding the LOHAS Market™.