NEW YORK As the recession takes hold, it’s worth asking: Is sustainability sustainable? Organic, a category that generally commands a price premium, appears to have hit the wall. However, green products that cost the same as their more environmentally incorrect rivals seem to be better positioned.
In June, sales of organic items began declining, per Nielsen Co. (which owns Adweek). Tom Pirovano, Nielsen’s director of industry insights, said the difference was that earlier in the year, when gas prices hit $4 a gallon, the stress mostly hit low-income consumers who weren’t predisposed to buy organic items anyway. But “in the last few months we’ve seen big-time layoffs, economic turmoil on Wall Street” which is causing anxiety in the wealthier households that tend to buy organic.
After years of double-digit growth, Pirovano predicts growth for organic will be in the single digits in 2009.
Not surprisingly, the Organic Trade Association, Greenfield, Mass., disputes the idea of an organic slump. Barbara Haumann, an editor with the association, said that the price parity between organic and non-organic has narrowed over the past year as the price of fossil fuel-based synthetic fertilizers has risen. “If a loaf of organic bread is 10 cents more, am I going to quibble?” she said.
The market for green-tinged products is a somewhat happier scenario. While in the past, the category was dominated by pricey, small, independent brands like Seventh Generation, now heavyweights like Procter & Gamble, Clorox and Church & Dwight have green products on the market. The companies have been careful to keep prices for those items low.
One example is Bounty Select-a-Size, a paper towel product that features sheets that are 45 percent smaller than traditional Bounty, but still purports to absorb spills faster than other two-ply competitors on the market. P&G rep Rotha Penn said, “Our intent is to develop ‘sustainable innovation products,’ which are products that do not require consumers to make any trade-offs.”