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U.S. Consumers Still Willing to Pay More for ‘Green’ Products

MintelHP2MarketMore than one-third (35 percent) of U.S. consumers say they would pay more for environmentally-friendly products, according to a survey on “green” living from market research firm Mintel.

Mintel believes that the “green living” market will track the Healthy Products, Healthy Planet (HP2) market at a broad level. The green market outperformed the economy as a whole, growing more than six percent in 2008, followed by flat growth in 2009. The report also finds that the market took a hit from tighter consumer budgets due to the recession and trading down from high-end green brands. The market grew about 41 percent from 2004 to 2009.

Food and beverage and personal care segments account for the majority of green products in the marketplace, according to the report. Despite slim sales growth of 1.8 percent in 2009 due to the recession, the natural and organic food and beverage category is expected to grow nearly 20 percent from 2010 to 2012.

The survey finds that only 21 percent of organic food buyers have cut down or eliminated organic purchasing, while 20 percent have switched to less expensive organic options.

However, nearly half (48 percent) are buying as much or more organic food than before the recession. Mintel said this suggests that organic food is a core lifestyle element for many people who may make cuts in other areas of their budget before reducing their organic buys.

Similarly, sales of green personal care products took a hit in 2009, growing only 1.2 percent. The report predicts that this segment is poised to grow once consumer spending begins to recover. In addition, since one-third of all consumers have never tried organic or natural personal care products, it indicates good growth potential, says Mintel.

New products with an organic or natural claim accounted for 5 percent of all beauty and personal care product launches in 2006, increasing to nearly 10 percent in 2008 and holding steady through 2009, according to Mintel’s Global New Product Database (GNPD).

The report finds that the number of consumers purchasing all categories of green household consumer goods declined slightly in 2009, primarily due to the recession with household cleaners and paper products still the most frequently purchased green products.

To meet consumer needs, large and small household cleaner manufacturers like Clorox, Procter & Gamble, Method, Seventh Generation and Mrs. Meyers Clean Day continue to develop more non-toxic, plant-based products.

The number of people purchasing green durable goods remained unchanged between October 2008 and November 2009, with only green electronics showing substantial growth. Mintel attributes this to the rapid obsolescence of common devices and increased availability of green electronics.

A key finding shows that green consumer services including dry cleaners are starting to become a significant factor in the green marketplace. The survey finds that at least one in three consumers consider environmental impact when choosing providers for services.

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