How to market sustainability to meet consumer demandsby
30th Aug 2010
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Sandra Horlings explains how brands such as Lipton Tea have bridged the gap between branding, sustainability and consumer demands.
We live in the Age of Transcendence. The Conceptual Age. The Age of Consumers. Or the Age of Turbulence. What we call it doesn't make a great deal of difference. More important is what's behind it: the fact that we are connected with each other, worldwide, that knowledge spreads at lightning speed across the world, that this leads to new ideas and specialisations being launched everywhere, that we are using up our raw materials, that we are contaminating the environment, that we are taking too many (financial) risks, living beyond our means and that, in so doing, we are pretty much turning the world on its head.
So doing business sustainably nowadays is a no brainer. A must do. But how can business create value from 'sustainability'? Marketing of sustainable products is a new territory and an evolutionary search for peaks. Luckily we’re getting more experienced and better equipped along the way.
Business strategy and sustainability go hand in hand these days. There is increasing evidence that aligning the interests of all stakeholders leads to better - financial - results. But business strategy and marketing strategy are in no way the same thing. When looked at sustainability from the consumer’s perspective, sustainability calls for:
- Creating awareness
- Being credible
- Making the products and services easily available
Awareness and choice are the most powerful levers for increasing sales of green products. McKinsey, in its quarterly issue of October 2008 states that awareness, availability, negative perception, distrust and price are the most important reasons consumers have for not buying green products. It is clear that the market can be opened up through raising awareness and offering an alternative to consumers.
Western European consumers, however, are out in front when it comes to awareness of sustainability. They are familiar with the trends and the consequences. They are increasingly more aware of their own role and the power that they have to bring about change.
But brands must help consumers choose. They can be a trustworthy source of information. Especially in educating and engaging large groups of customers. Where one consumer can't make a difference, a community of brand users can. Brands also influence our attitude and our preference and buying behaviour. If consumers are the agents of change, brands have the power to drive change.
Generally speaking, more sustainable brands are more trusted by consumers. Trust marks are very powerful as they encourage the consumer to trust a brand. Kraft Foods’ market share in the UK increased by 8% after it placed the Rainforest Alliance frog on its Kenco (coffee) packaging. A trust mark tells consumers, in a friendly way, that the brand is honest and sincere. It is an approach that large global companies with established brand names often use. The more sustainability exists in the genes of a brand, the more credible it will be for consumers.
Retailers also play an important role in making sustainable products available to consumers. Sustainability is high on their agenda and they are interested in creating shared value.
A case study in point
Lipton Tea chose wisely and can now show some great results. But it didn’t act on impulse. Over the past 15 years, Lipton has been improving the conditions in which tea is farmed in Kenya. In the last years it became increasingly clear that changes in society meant Lipton needed to explain how it makes tea. And within this marketer of global brands the question was being asked: can the costs of these programmes be offset by marketing benefits? Unilever's brands have a clear focus in the marketplace, a clear promise and a broad anchoring of sustainability in the organisation. So the solution lies at the income side.
Lipton thought the central question for consumers was the credibility of the brand. It explored three possible routes:
- Carrying on its own improvement programme from Kenya
- Setting up a new sustainability programme itself
- Working together with a third party
Lipton spoke about the importance of credibility and the role that third parties could play in that with its advisory board, a club of experts. Especially when dealing with the environment, it became clear that the company's own programme would need continual support from third parties: they could provide a stamp of approval for the production methods.
In May 2007, Lipton signed an agreement with the Rainforest Alliance. Stating that in 2010 all Lipton Yellow Label teas bags sold in Western Europe will contain tea from Rainforest Alliance Certified farms. Lipton realised its ambition and gained even more.
To quickly convert consumers to this ‘better’ tea, Lipton focused on countries where consumer interest in sustainability was already high and everyday increasing.
It changed its packaging in these countries and placed the ‘seal frog’ - the consumer trust mark from Rainforest Alliance - on their packaging.
And it coupled insights to their brand promise: Lipton tea can do that. Drinking Lipton helps people to lead a better life. Better in terms of being healthier and fitter. And also a better life for farmers and a better environment. Furthermore, Lipton made a crucial decision. Consumers would no longer be asked to pay more for certified tea, despite a higher cost price. Although most consumers looked very positively on 'better behaving brands', a much smaller percentage also actually wanted to pay more for them. The price therefore remained unchanged as Lipton set out to convert all its products that were already on shelves. For retailers, there was therefore no obstacle to stocking the certified tea.
Lipton did deliver proof of concept. Sustainability has proven itself to be a major creator of value. Sales and market share went up during campaign periods. In countries with a mature tea market, the shifts were substantial. In markets where brand activation linked well to the brand turnover grew over 10% and it gained 2 to 4 extra points volume share.
Subsequent analysis showed that certified tea was attracting a new kind of consumer, a younger consumer. And the perception of Lipton as a quality tea increased. Without anything having been said about product features in the campaign, the care and attention shown told consumers everything they needed to know about the quality of Lipton Tea. It is perceived to be a better product.
Lipton is convinced that the frog, which is front and center on the Rainforest Alliance Certified seal, has enormous appeal to consumers. Comparing country results with and without the seal visible on the packaging show huge differences. At the definitive moment of choice, the frog-seal therefore made the difference between buying and not buying.
Lipton gained in the out-of-home channel. McDonald's opted for Lipton tea in twelve countries, to the detriment of the incumbent supplier. IKEA and KLM/Air France, too, now serve Lipton Tea bearing the Rainforest Alliance Certified seal. In different places and at different moments, consumers are made more aware of the sustainable alternative and the visibility of the brand is increased.
In the next few years, Lipton will have its hands full keeping its promises. 2015 will soon be with us. By then, Lipton wants to be sourcing all of the tea for its tea bags, worldwide, from Rainforest Alliance Certified plantations. All roll out decisions revolve around the consumer and the promise made to them. So, Lipton’s search for peaks has only just started.
However, this journey has only just started. So there are some additional lessons worth considering when addressing sustainability as a real marketing topic.
- Marketing sustainability is a process. It calls for an agile organisation. In other words, how quickly an organisation can adapt itself to the challenges it has to face: changes in the economy, the whims of consumers, or the faster introduction of laws and regulations.
- Doing so, sustainabability calls for new guidelines. Working together with different, often new, partners takes time. All parties have to go through a learning curve, develop a shared language and be able to trust each other.
- It is about managing a new sort of knowledge. Known often only to a small number of people. Which brings with it major risk of damage to a company's image if used incorrectly. It calls for precision in execution. It's important to be very clear about what it is you’re doing. Not to be careful, not to overpromise or make incorrect claims.
- And sustainability calls for momentum. Marketers who have a good image of the world in which their brands exist pick up the signs early on. Even marketers who have their antennae a little less tuned into society can still identify consumer trends.
- The good news is: sustainability is measurable. And that's important for justifying any investment required. Everyday now there are more brand surveys and indexes published on what the social brand value is and how to improve this. All surveys point in the same direction: high social equity brands are frequently associated with higher preference scores amongst consumers. And in the end, isn't that what marketers are always trying to influence?!
Sandra Horlings is director of Wonderwings.nl.
This article is adapted from the booklet Marketing Sustainability. Bridging the gap between branding, sustainability and consumer demands, published by IDH, dutch sustainable trade initiative.
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