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.
 
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.
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.