Recession May Deal Green Movement A Setback

Consumers trim spending on environmentally-friendly products

February 24, 2009
The economy is starting to cast a shadow over green living's glow. A movement that appeared to be gaining momentum before October's financial meltdown appears to have slowed, at least temporarily.

According to new consumer research from Mintel, the number of Americans who say they almost always or regularly buy green products remains unchanged since last year, at 36 percent. This comes after tripling the previous year, from 12 percent in 2007 to 36 percent in 2008, according to Mintel consumer survey data.

"People's priorities have changed because of economic hardship. A substantial number of shoppers are now struggling just to provide the basics for their families, so green living is no longer top of mind for many Americans," said Marcia Mogelonsky, Ph. D and senior research analyst at Mintel about the shift in green shopping behavior

Cost remains an impediment to the green market's growth. Mintel's recent survey found the majority of adults are willing to pay only a little extra for green products. Moreover, 54 percent of respondents say they would buy more green products but the products are too expensive.

In other consumer surveys, Mintel has uncovered similar hesitance towards buying green based on price. An October 2008 report on organics revealed that nearly four in five adults say they would buy more organic food if the products were less expensive.

Likewise, a January report on environmentally-friendly cleaners showed that 52 percent of shoppers who buy household cleaning products feel green cleaning products are too expensive.

"Today's shopper is looking for value," said Mogelonsky. "Value doesn't mean just low prices, but cost is definitely a factor. True value includes health and safety benefits, quality, convenience, appeal and trust, all at a reasonable price. Companies who provide those benefits, as well as appease shoppers' green sensibilities, will enjoy success despite the recession."

Mintel sees many opportunities for growth in green markets over the next few years. Though the recession is expected to impact sales through 2009, Mintel forecasts 19 percent growth for green products overall through 2013. Markets including green personal care and environmentally friendly household cleaners are expected to perform especially well.

Organic food, the most mature segment, will experience slowing but steady growth over the next five years, despite lower prices from private label organics and competition from natural and local foods.

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