The Pitfalls and Opportunities of Eco Labeling

The Pitfalls and Opportunities of Eco Labeling

There have been two big announcements recently regarding eco
labeling and certification -- one that's causing quite a stir and one
that's happened relatively quietly. Both represent a big opportunity
for the organizations involved and one represents potential danger.

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Let's start with the dangerous one first (the quiet one will be covered in my next post): Dean Foods announced that its Horizon brand -- which has always been the company's organic brand -- will now offer a new line
of lower priced "natural" products. This announcement set off alarm
bells within the organic community and, in fact, the Washington Post, the Chicago Tribune and the Brownfield Ag News
(the farm radio guys) have all reached out to me for comment on the
consumer side of the equation.

Why is this such a big deal? Our Eco Pulse
study revealed that most Americans prefer the term "natural" to the term "organic" -- and they would be more likely to reach for a product with a
label that says "100% Natural" over one that says "100% Organic"
because consumers believe -- erroneously -- that natural is the term
regulated by the government, while organic is an unregulated, fancy
marketing buzzword slapped on products to justify a higher price point.

Consumers respond to the Eco Pulse 2009 survey. Image courtesy of Shelton Group.

Courtesy of Shelton Group
Further, most consumers feel like there is no trustworthy green
label/certification system. So when we asked them, "How do you know if
a product is green?" 35 percent said they tell by reading the label on the
product. In short, consumers are relying on manufacturers to help them
understand which products are eco-friendly and lead them honestly down
the path of green choices. That's why the Horizon thing is so dicey. 
If consumers erroneously perceive that natural is better than organic,
Dean foods will, in essence, be taking advantage of this misperception
for marketing gain.

Now, their defense might be something like, "Look -- if consumers
tell us the word "natural" makes sense to them and we can back up the
claim that this line of products is, in fact, natural, this is simply a
solid marketing strategy -- not an effort to mislead consumers." They
would be correct.

However, another funny finding in our Eco Pulse
study tells us this may not be a good long-term strategy. Forty percent of the
population claims that if they found out a product that had been
advertising itself as green turned out not to be, they would stop
buying the product. The more interesting finding is that 36 percent say they
would not only stop buying the product -- they’d also tell their friends
and family to stop buying it, too. This is up from 28 percent last year.

So if consumers begin to understand the difference between natural and organic, they may eventually feel a little duped by Dean for using
the term natural to get them to buy. And those consumers could punish
Dean by buycotting AND boycotting the product.

Our advice to Dean is simply this: Take the lead in educating
consumers about the difference between organic and natural. Clearly
there's mass confusion on the part of consumers here. If your
advertising and labeling can simply and easily tell consumers what the
difference is and help them make the choice between the two that's
right for them, having both an organic and a natural line will be a solid short-term and a long-term marketing strategy.

Suzanne C. Shelton is founder, president and CEO of Shelton Group, an advertising agency focused exclusively on motivating mainstream consumers to make sustainable choices.