March 10, 2010
Method ‘Green’ Household Cleaners Try to Take Market Share from Clorox
Method’s “green” household cleaning products made from non-toxic, plant-based materials have made their way onto the shelves of dozens of retailers including Target, Whole Foods and Lowe’s, reports Forbes.com. But they have a lot of competition from Clorox and Procter & Gamble, as well as smaller competitors Seventh Generation and Mrs. Meyers Clean Day.
Method’s products are stocked at 160 retailers across the U.S. and are available in Canada, England, Australia, France and Japan, on Amazon.com and its own Web site.
The maker of “green” bathroom cleaners, dish soap and hand soap in January expanded its product line with the introduction of an environmentally-friendly laundry detergent. Method differentiates its packaging by providing products in sleek, and sometimes, clear plastic bottles, reports Forbes.com.
Method launched an advertising campaign called Detox Your Home in 2007 that helped grow its sales from $85 million in 2006 to $200 million in 2009.
Method’s competitors are also developing new eco-friendly lines. As an example, in 2008, Clorox became the first major consumer products firm to launch a line of environmentally-friendly cleaners, which was followed by the introduction of its first plant-based detergent and stain remover in 2009. Clorox’s green line also became the top selling line of natural cleaners in 2009 with a 42 percent share of the total market, generating more than $200 million in revenue annually.
Meanwhile, Proctor & Gamble is working on the development of safer detergents under the Safer Detergents Stewardship Initiative (SDSI), and Seventh Generation aims to exclusively use certified sustainable palm oil for its eco-friendly household products by 2012.
In 2008, eco-friendly cleaning products accounted for only three percent of the market, but will reach a 30-percent share by 2013, according to research firm Mintel International, reports Forbes.com. However, a consumer study from Mintel in 2009 found that 52 percent of shoppers said that green household cleaning products cost too much.
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Reader Comments
Method, like many companies that are in business to help the Earth and society, is at a disadvantage in some ways. If it wants to raise capital by selling stock, it would then be beholden to its shareholders. Method puts greater value on being environmentally friendly than in increasing profits but shareholders could accuse them of not wisely using the funds they provided Method when they purchased its stock.
Ben and Jerry’s was forced to sell their company despite objections from the founders. The stockholders demanded that the ice cream company sell because it increased the value of their shares. The unbelievable fact in all of this is that businesses are legally required to increase profits and shareholders can sue them if they do not pursue the best financial outcome.
There are currently bills in both CA and VT that would change these laws but until then, Method and other socially responsible firms should think twice about going public.
Matt Courtland of The Natural Strategy | March 10th, 2010