Inside America’s Green Machine

Eco-friendly products aren’t going away. If anything, they should become more widespread in these tough economic times. But changes are afoot. Corporations increasingly are getting into the green game, and profitability remains the priority. Consequently, claims can be misleading. We take a look at the greening of consumer products and how this will affect your wallet.

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At the 2009 Consumer Electronics Show (CES) this past January in Las Vegas, “green” was the color of choice for almost every manufacturer, particularly those that sell power-draining flat-panel televisions.

All of the major manufacturers unveiled new models that promise to deliver  significant improvements in efficiency. Samsung introduced a line of flat-panel LED (light-emitting diode) TVs that it claims will use 40 percent less energy than a typical LCD (liquid crystal display) TV. And energy efficiency isn’t the only eco-friendly selling point of this line, which is expected to arrive in stores sometime this year. Samsung says these TVs also are mercury- and lead-free, which means that they’ll be easier to recycle when it comes time to dispose of them. (Although Samsung refused to say how much these TVs will cost when they arrive, because they carry the company’s top-of-the-line technology, you can bet that they won’t be economy-price models.)

As the United States slides deeper into a recession, you might think that manufacturers would be reluctant to introduce green-product lines that typically carry a large markup (20 percent to 100 percent) over traditional lines. On the contrary, even in tough times manufacturers are pushing to get into the business of selling eco-friendly goods and services.

“Everyone is falling all over themselves to show who is the greenest,” says Tatjana Meerman, publisher of Packaged Facts, a market research firm. “I go to the store and am just astonished at the number of ‘green’ products I see.”

GREEN MEANS GO. To be certain, especially during a tough economic environment, green would appear to be a luxury for many people. After all, it’s one thing to save the planet when you have money to spare, but it’s quite another thing when you’re trying to make ends meet. Although the industry analysts, green marketers, environmentalists and academics whom we interviewed warn us that anything could happen in these tough economic times, the consensus is that green products will not fare worse than their conventional counterparts. In fact in some cases, green is becoming the default choice. Energy-efficient products are the norm, and washers, refrigerators and cars that are less efficient are becoming relics. In other words, the products that you buy are increasingly more environmentally friendly than ever before, even if they aren’t designated as green.

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“There are several times in history where environmental issues have come to the forefront,” says Ed Stafford, a professor of marketing at Utah State University. “But this time, green is here to stay.” What’s different now, Stafford adds, is that everyone is on the green bandwagon—consumers, government, industry and nonprofits all have taken an interest in promoting or buying green products.  Before, the push wasn’t as unified, so green quickly recessed into sparse niches.

That isn’t to say that the market for green products is flying high. For example, the sales of organically grown foods had increased an average of 18.7 percent a year since 1997, but that growth slowed to 4 percent from October 2007 to October 2008, according to Nielsen Co. Sales of hybrid vehicles, which had expanded by more than 50 percent each year since 2005, increased a scant 0.4 percent in 2008, according to market research firm Mintel.

However, many green-product categories are growing faster than their conventional counterparts, according to data from several market research firms. (See “Products Bring in the Green.") Recent salmonella scares, stories about E. coli, and concerns about pesticides in conventional foods and toxic chemicals in personal-care products, such as lotion, shampoo and soap, are shoring up sales of organic food and driving the booming green personal-care and household-products sector, Meerman says.

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