A Natural Fit?

November 30, 2007

Marketers big and small are entering the green cleaning segment. But is there room for everyone and are consumers willing to pay more for these products?

A Natural Fit?

Marketers big and small are entering the green cleaning segment. But is there room for everyone and are consumers willing to pay more for these products?

Tom Branna
Editorial Director

Bees and bleach? As incongruous as it may seem, Clorox’s recent acquisition of Burt’s Bees could signal the next phase in the household cleaning segment’s shift to a more eco-friendly profile. Like the big cosmetics houses before them, some multinationals in the household cleaning sector, like Clorox, recognize that the best way to compete with aggressive “greenies” is through a combination of acquisitions and new product launches. It’s no wonder then why much of the industry is watching Clorox’s moves to see if the Burt’s Bees purchase, as well as the rollout of a new natural cleaning product line, can be the one-two punch that Clorox and the rest of the industry needs right now.

“One point of note regarding the Clorox range of products is that they have said it will cost 20-25% more than its standard range of products, and one does wonder whether consumers will be prepared to pay such a premium for eco-friendly products,” observed Adrian Atterby, an analyst with Euromonitor International. “While a small number may be prepared to do so, if this price differential continues, the range is unlikely to become a mass market brand.”
According to Information Resources, Inc., sales of household cleaners in food, drug and mass merchandisers (excluding Wal-Mart) fell 1.88% to about $1.6 billion for the 52-weeks ended Oct. 7. While most segments recorded anywhere from slight to deep declines (see chart, p. 96), there were a couple of categories that posted good gains. Specifically, sales of spray disinfectants jumped nearly 6% and sales of nonabrasive tub and tile cleaners rose more than 5%. These results underscore some consumers’ concerns about killing germs and keeping bathrooms clean.

“There are basically two types of cleaning consumers: those who want a deep, thorough clean as the first attribute, and those for whom quick/convenient is the strongest attribute,” said Ross Holthouse, external relations manager at Procter & Gamble. “However, even people in that second category are not willing to sacrifice too much cleaning efficacy in the quest to achieve convenience.”
A couple of months ago, widespread media coverage of Methicillin-resistant staphylococcus aureus (MRSA) had consumers running for their disinfectants. For a lot of homemakers, just a quick shot of a disinfecting formula is enough to alleviate any health concerns. Renewed interest in germ-killing action should continue for the foreseeable future.

“We believe disinfectant has the most upside,” said Rich Owen, president of CR Brands. “We're working on new disinfectant products right now. Look for an announcement in 2008.”

At the same time, CR Brands is updating its Mean Green cleaner with new graphics that focuses on the brand rather than specific uses for the product.

“We asked consumers to help us build the new look. It scored well in test and I think it will do well in the market,” said Mr. Owen. “Our research shows that MG has a loyal following and real brand equity. The new packaging makes better use of those facts.”

While it’s never been billed as an environmentally-friendly cleaner, it doesn’t hurt to have green in your brand name.

“The green market is heating up. Green Works and all the others will help drive awareness for the category,” observed Mr. Owen. “One thing that has effectively set Mean Green apart from the other ‘greens’ is that Mean Green is primarily ‘Mean.’” Green is a secondary benefit.

“Other green products are “green” first while cleaning is a secondary benefit—or at least that’s the way they are perceived by most consumers,” Mr. Owen told Happi. “And in general, consumers are right to see them that way.”

According to Clorox data, natural products represent less than 1% of the total cleaning category, because of consumer concerns over product performance and price. Yet, nearly 44% of consumers said they want to use more natural household cleaning products, but the products need to get the job done.

SDA Announces Annual Meeting Schedule

The 82nd annual meeting of the Soap and Detergent Association (SDA) will be held Jan. 28-Feb. 2 at the Boca Raton Resort and Club, Boca Raton, FL. The theme of this year’s meeting is “Going Beyond Green” and will focus on all aspects of sustainability.

Keynote speakers for the annual meeting will be Ray Anderson, founder of Interace, Inc. (invited) and Lynn Dornblaser, director of customer solutions, Mintel.
Ms. Dornblaser’s presentation is “Going Green and Beyond: Options and Opportunities for Soaps and Detergents. Ms. Dornblaser notes that  “environmental responsibility” is the term everyone is talking about these days, but it is not necessarily easy to accomplish.
This fast-paced presentation will take a look at the types of environmentally responsible products that appear in this category, how product concepts from other categories may apply, and how some companies have taken both small and large steps to offer products within this “green” halo. The presentation will also cover what consumers think about environmental issues, and how they engage in environmental responsibility. The presentation will be global in scope, drawing insight from products and trends around the world.
The program also includes in-depth sessions on U.S. and global regulations with presentations by association experts and SDA staff members.

Of course, the annual meeting will include golf tournaments, opening reception, closing banquet and plenty of quality time around the cabanas! More info: www. cleaning101.com

Taking Green to a New Level

For years, Seventh Generation and a handful of other companies, have been a voice in the desert, urging multinationals and consumers to rethink the way they clean their homes and care for the earth. But as competition heats up, the folks at Seventh Generation are trying to take green to a new level through a variety of initiatives.

“In the U.S., no legal requirements exist for ingredient labeling on household cleaning products. It is one of the least regulated industries in the U.S.,” insisted Reed Doyle, director of product innovation, Seventh Generation.

He noted that the EU’s Detergent Directive requires labeling and website disclosure of ingredients in detergents and cleaning products, became effective in October 2005. In the U.S., Senator Joe Simitian introduced legislation in California (SB 509) that would require manufacturers to post ingredients in consumer products on websites. Meanwhile, non-governmental organizations such as Women’s Voices of the Earth and Environmental Working Group have publicly called for manufacturers to list their ingredients. 

Seventh Generation offers an array of cleaning products.
“Seventh Generation continues to lead this effort by listing all of our ingredients per international nomenclature for cosmetic ingredients (INCI) on the MSDSs available on our website,” observed Mr. Doyle. “Perhaps, it should be called international nomenclature for cosmetic/cleaning ingredients. We have been working with the Soap & Detergent Association (SDA) to proactively push the industry as a whole in this direction.”

Now, Seventh Generation is moving in a new direction, rolling out eight scents all based on 100% pure essential oils.

“Aroma trends indicate that consumers are drawn toward more earthy, woodsy, fresh scents that are best delivered through the use of 100% pure essential oils,” he insisted. “As a result, even mainstream perfumery is beginning to attempt to incorporate essential oils into fragrances because synthetic fragrances are unable to perfectly deliver these aromas.”

Having saturated the natural retail channel, Seventh Generation is expanding to mainstream retailers such as Target, Walgreens, Safeway, Albertson’s and Publix.

“We’ve barely gone into food, drug and mass, so that’s where our growth will be,” he insisted.

And while his company welcomes Green Works and similar products to help get the message out about green cleaners, Mr. Doyle said that a more sustainable cleaning product is one that performs equal to or better than conventional or competing products and has a reduced effect on environmental and human health when compared to the competition. Seventh Generation aims to create products that are:
    • Vegetable-derived;
    • Non-hazardous to the environment;
    • Biodegradable;
    • Phosphate-free;
    • Chlorine-free;
    • Not acutely toxic as used in the cleaning formulation;
    • Not chronically toxic (as defined by the Consumer Pro-duct Safety Commission);
    • Hypoallergenic and
    • Responsibly packaged.

Other Ways to Go Green

All that may seem like a tall order, but one that is growing in popularity with consumers. While large multinationals may be a bit late to the party, they’re starting to roll out greener formulas at a fast clip.

According to Mr. Atterby, in the automatic dishwashing category, both Henkel and P&G are promising that their products clean in lower temperatures. Henkel (Somat 7 in Germany) and P&G (Fairy Active Burst in UK) are now making claims regarding the cleaning power of their products at lower temperatures. In Germany, Henkel claims its Somat 7 can wash as effectively at 40°C as at normal temperature. In the UK, P&G makes similar claims for its Fairy Active Burst, although at 55°C.

Also in dishwashing, Yuki Senzai in Japan has developed Organic Dishwashing Liquid which is made from wheat and rice protein that is derived as a by-product of the noodle production process, providing a unique way of using up unwanted manufacturer ingredients.

“The only downside to this detergent is that it has to be used up one month after opening,” observed Mr. Atterby.

In the insecticide market, producers are also starting to launch new products which use fewer hazardous chemicals, such as Reckitt Benckiser’s Mortein Naturgard range which uses natural plant extracts or which employ new ways of disposing of insects such as Lion Corp’s new range of products which use no chemical pesticide ingredients, instead freezing insects to death. In the UK once more, Sainsbury’s is launching a raft of own-label “green” household cleaning products called Cleanhome. The seven Sainsbury’s Cleanhome formulations use sustainable natural ingredients that reportedly deliver “outstanding cleaning performance, at no additional cost to the Sainsbury’s shopper.” The supermarket chain says that “wherever possible, packaging is recyclable or made from recycled materials.”

SODEOPEC 2008 Set for April 13-16 in Florida

Green chemistry is on the agenda when the sixth SODEOPEC (Soaps, Detergents, Oleochemicals and Personal Care Products) Conference takes place April 13-16 at the Hilton hotel in the Walt Disney World Resort, Orlando.

Technical presentations will cover all aspects of the industry from the new technologies and services that are impacting the industry, to new restrictions due to environmental issues, to innovations that will change the industry in the next decade. Lectures will be presented in English with simultaneous Spanish translation. Here’s a look at the themes of the conference:
    • The Impact of Biodiesel on the SODEOPEC Industries;
    • Sustainability, Green Chemistry and Environmental Issues and
    • SODEOPEC Innovations

In addition to three days of conferences, SODEOPEC will include a supplier exhibit. Exhibitors will also present commercial applications and offer hands-on product demonstrations.

More info: American Oil Chemists’ Society, (217) 359 2344, www.aocs.org

Clearly, all of these moves underscore the growing importance of the green movement to multinationals.

“With this (Burt’s Bees) transaction, we’re entering into a new strategic phase for our company, enabling us to expand further into the natural/sustainable business platform,” said Donald R. Knauss, chairman and chief executive of Clorox in a statement. “The Burt’s Bees brand is well-anchored in sustainability and health and wellness, and we believe it will benefit from natural and green tailwinds. It’s in an economically attractive category with a margin structure that will be highly accretive.”

The Burt’s Bees acquisition, combined with the new Green Works line of cleaning products and the Brita water-filtration products, will enable Clorox to build a robust, higher-growth platform, he insisted. According to Clorox, all products in the five-item line (all-purpose cleaner, glass and surface cleaner, toilet bowl cleaner, dilutable cleaner and bathroom cleaner) are made from ingredients derived from coconuts and lemon oil. The products are biodegradable, non-allergenic, packaged in bottles that can be recycled and not tested on animals. All of them will be available in food, drug and mass markets nationwide beginning next month. The products are priced from $2.99 to $3.39.

Other Environmental Initiatives

While a lot of household cleaning product companies may be dyeing to go green, P&G executives keep a watchful eye on the category.

“At this time, we do not manufacture or distribute any household cleaning products intended for consumer use that we claim or position as being green,” explained Mr. Holthouse.  “We do recognize that this is a growing trend and segment.”

P&G, he said, continues to evaluate opportunities to incorporate alternate materials into its products whenever possible and practical, and where it can provide a meaningful consumer benefit. Mr. Holthouse noted that as is its overall practice, P&G develops products based on consumer-driven innovation. The company strives to develop new products and/or improve existing ones based on the feedback and the input it receives from consumers during its ongoing research efforts. 

“In terms of green cleaning products, we will continue to investigate options and possibilities, with the expectation that any resulting products must continue to deliver the level of cleaning performance, efficacy, and value that our consumers have come to expect and trust from P&G and its brands,” he added.

P&G recently unveiled a five-year sustainability program that calls for generating at least $20 billion in cumulative sales of products with reduced environmental impact during that time. Although Mr. Holthouse declined to comment on which product categories will specifically deliver the most impact against these goals, he did say that sustainability will continue to be a top priority for P&G.

“Moving forward, all products that we develop and commercialize will clearly be evaluated against the criteria and goals we have established in support of the environment.”

Reckitt Benckiser, too, has embarked on an aggressive plan to reduce its impact on the environment. Last month, the company unveiled Carbon 20, a program to reduce its total carbon footprint by 20% per unit by 2020. According to the company, that 20% target (on a current base of about 15 million tonnes of CO2 equivalents a year) is equivalent to removing the carbon impact of roughly one million cars.

“This is a long-term commitment to tackle the real impact of our products’ lifecycle on climate change by addressing their Total Carbon Footprint, from cradle to grave,” said Bart Becht, chief executive officer of Reckitt Benckiser. “This different approach targets more than just the easy wins under our direct control like factory emissions or travel; it will require real partnership across our business and with our business partners to reduce energy consumption; and education and communication with consumers to enable them to tackle their own impact which can be the largest part, particularly where laundry or dishwashing machines are involved.”

Every company it seems, has a green strategy. Still the question remains: are consumers ready to pay more for all of these environmentally-friendly innovations?