When a former U.S. presidential candidate narrates a documentary espousing the need to reverse the effects of global climate change – and Oprah starts informing viewers how to live a more eco-friendly existence – it becomes clear that the environment is no longer a fringe concern but increasingly a mass fixation.
As interest in going green proliferates, many companies have recently adopted and are communicating environmental policies in the hope of attracting consumers. They’re also anxious to deflect the heightened scrutiny of activists and avoid getting blogged on. The benefits – beyond avoiding bad press – include cost cutting, motivating employees and winning over eco-conscious consumers.
That’s what Wal-Mart hopes to achieve with its current environmental strategy. U.S. CEO Lee Scott wants the chain to be greener than green by increasing the efficiency of Wal-Mart’s vehicle fleet, and reducing energy use and solid waste from U.S. stores. The Bentonville, Ark.-based retailer also plans to invest US$500 million in sustainability projects, and increase its offerings of
eco-friendly products. It’s already become the largest global purchaser of organic cotton and organic milk.
Here in Canada, says Kevin Groh, Wal-Mart’s Mississauga, Ont.-based director of corporate affairs, the retailer is mirroring the U.S. strategy and is focused on improving its environmental record in three areas: waste reduction, energy management, and the introduction of green products, as determined by its corporate social responsibility task force.
Groh says it has become absolutely necessary for companies to clean up their act, because of increasing consumer demand. ‘We are being asked more questions, customers are making more requests for green products and, as a retailer, there are many things we can control in our business that provide immediate payback. The customer expectation isn’t going away, it’s growing.’
Thus, Wal-Mart Canada is on track to reduce waste by 10% this year, and hopes to improve that number to 30% in five years. In the future, it aims to become a zero-waste company, according to Groh. On the energy management side, this summer the stores turned their air conditioning down and dimmed lighting, a fact that was communicated via posters on-site.
Meanwhile, in B.C., 25% of the chain’s locations run on green power and in Ontario, four stores use energy supplied by green electricity provider Bullfrog Power. Groh says that these areas were chosen because of availability, but that the retailer is hoping to eventually build a national commitment to green power. Meanwhile, the firm plans to erect a sustainable retail location in Vancouver that ‘comes at a tremendous cost to us, but is also a huge opportunity to study sustainable features in a retail environment, that can ultimately be rolled out to some or all of our stores.’
As for new products, Wal-Mart Canada will be launching organic baby clothing in the fall, and plans to reach out to more eco-friendly producers, as well as cut back on packaging for its private label goods. A request to do the same will also be put out to suppliers in the future. Then there’s Green Grants, the retailer’s two-year old program to donate green space to communities across Canada in order to offset its own use of land. Run through an organization called Evergreen, this project too is advertised in stores.
The efforts are a serious and long-term priority. ‘There’s an immediate customer read on any program that’s not honest, and customers will tell you if they’re not buying into it,’ says Groh. But he adds that there are also significant cost reductions associated with environmental changes pertaining to packaging, shipping and distribution space: ‘And when you’re talking about retailers with high volume, you’re talking about high volume savings.’
Like Wal-Mart, the LCBO has also introduced an extensive environmental strategy, which became official in 2004. According to Lyle Clarke, the retailer’s chief policy advisor, it has four fundamental objectives: to reduce the amount of waste generated by 10 million kilograms annually; to increase the rate at which containers are collected for recycling to 80%; to reduce its consumption of energy and utilities by 10%; and to raise cash to invest in programs that preserve and rehabilitate wildlife through the retailer’s Natural Heritage Fund.
The first pillar is what has generated the most attention thus far. Back when the waste reduction target was established, the LCBO challenged its suppliers to come forward with innovative eco-friendly packaging.
The first to answer the call was French winemaker Blasé, whose vintage dated, varietal premium quality wine French Rabbit now comes in tetrapak containers. The LCBO’s marketing team joined forces with the vintner to create a launch strategy for the new product, says Clarke, who points out that the marketing message included several consumer benefits – ‘it’s lighter weight, it’s unbreakable, it’s great for the patio, but we were also very upfront with the environmental benefits in terms of waste reduction. The message on brochures was ‘savour the wine, and save the planet.” A dollar from every tetrapak of French Rabbit sold also went to the retailer’s Natural Heritage Fund, and specifically towards a program supporting the recovery of an endangered bird called the Eastern Loggerhead Shrike.
He adds: ‘What our marketing people tell us is that the environmental message alone is not entirely effective at making the purchase choice. Consumers want to be good for the environment. But you need more than that to get the purchase. They want to see the value proposition.’ The blend of benefits communicated to consumers via in-store efforts and billboard ads worked for French Rabbit. The LCBO achieved its six months sales projections in just a few weeks, and two million dollars worth of French Rabbit
was sold between August and November 2005. Thanks to its success, there are now 30 different enviro-packaged alcoholic beverages on the market, with another 40 or so expected to land on LCBO shelves within the next year or two.
Like French Rabbit, the purveyors of many new products are donating proceeds to the LCBO’s fund including Bandit, a brand from California winery Three Thieves, which is supporting the creation of a Toronto-area habitat for frogs, and Australian winemaker Banrock Station, which will be funding efforts to reintroduce Atlantic salmon to Lake Ontario.
The majority of these do-good projects are advertised through in-store signage. For the Banrock product, for example, the slogan on POP is ‘bring home the wine that brings back the salmon.’
Adds Clarke: ‘We’re trying to engage our staff, customers and suppliers in our strategy in a positive, brand building way that will give them an emotional connection with what we’re doing.’
Even retailers who historically have had a strong commitment to the environment are upping the ante. Toronto-based Roots was way ahead of its time when it introduced organic products in 1989, and today its organic line is being expanded, as are products with hemp and bamboo. As for the chain’s signature leather goods, more and more are vegetable tanned, which means they aren’t produced with toxic dyes.
As Robert Sarner, director of communications and public affairs points out, founders Michael Budman and Don Green have always had a connection to wilderness, given that they conceived Roots during a camping trip in Algonquin Park. Sarner says this history gives the brand credibility to adopt environmental policies. ‘But also I think there’s even greater expectation. People hold you up to a higher standard, when you’ve nurtured your company, heritage and image closely with the outdoors, healthy living and active lifestyles.’
To send an even stronger message of its environmental stance, the retailer opened a new concept store on Toronto’s Yonge Street last month built with eco-friendly products such as recycled wood and bamboo. It sells mainly environmentally responsible products. A significant benefit to this? Roots can charge 50% more for vegetable tanned skins versus regular leather goods, and 10% more for organic clothes. Sarner says the retailer is investing in ad support for its organics line; in fact, many of the T-shirts themselves carry slogans that spread the word.
Furthermore, Roots has donated more money and time to environmental organizations in recent years, and sponsored Al Gore’s documentary, An Inconvenient Truth, which it promoted in stores. The retailer also backs the Toronto Green Awards, which celebrates contributions to the greening of Toronto, and Michael Budman is on the board of Robert Kennedy Jr.’s Waterkeepers Alliance, which works to protect waterways. Plus, the retailer sells bracelets to raise funds for the Stop Global Warming Fund, run by U.S.-based stopglobalwarming.org.
Still, at the end of the day, people’s number-one concern is, ‘the product has to be appealing – it has to look and feel good, the price has to be reasonable, even if it is a bit more expensive,’ notes Sarner. ‘The fit has to be right.’
