Have you noticed that some large corporations are purchasing other socially-conscious corporations to take advantage of the goodwill created by these companies’ endeavors? The cover of the July 17, 2006 issue of Newsweek prominently displayed the title, “The New Greening of America: From Politics to Lifestyle, Why Saving The Environment is Suddenly Hot.” If you have noticed such changes, then you may not be surprised to read about a new trend in marketing behavior that has recently hit a tipping point with conscientious consumers who purchase products and services made by what the author of this article refers to as “conscientious capitalists.”
Conscientious capitalism is a term that represents an economic system that takes place when businesses make money while also making a difference. Some examples of ventures considered representative of conscientious capitalism are:
- Patagonia’s commitment to environmental activism;
- Starbucks’ commitment to social responsibility and fair trade practices;
- Google’s commitment to make meaning by organizing the world’s information and making this information universally accessible and useful.
To gain a better understanding of the driving philosophies behind what may be propelling this tipping point in the rise in conscientious consumerism, Molly Lavik recently had several conversations with business practitioners involved with this new market. The following are relevant excerpts from these conversations followed by a checklist of items to consider as a conscientious capitalist.
Conversation 1: Sarah Wauters, conscientious consumer, mother of Genevieve and T-shirt entrepreneur.
A conscientious capitalist makes products that are in high demand by a socially conscious consumer base. A conversation with Sarah Wauters, a representative of this market space, reveals the mindset and driving philosophies that motivate the buying decisions of a conscientious consumer.
What led you to your interest in products that are conscientious?
There were a series of events that occurred in my life. My sister was diagnosed with breast cancer, and my mother cared for a long-term boyfriend who had cancer. My mother received recommendations from the doctors that anyone who has these diagnoses really, really must stick to organic food almost exclusively. My mother began to warn the rest of us, “You really have to start to eat well.” Then I became pregnant, which of course is another real motivator, and I began to hear from my other very aware friends that while you are pregnant, you really have to be careful about what you eat. One of the most important things is that you have to eat organic foods, both produce and meat. So I began to do that, and then of course once you have a baby, you have to feed both the baby and yourself.
So as far as food is concerned, I really became very conscientious about purchasing organic food pretty much exclusively, and then, of course, becoming more aware of which foods to purchase. Certain fruits and vegetables absorb pesticides and chemicals. With meat, it’s very important because in any meat that is down the food chain, the accumulation of chemicals is going to be much greater.
I also did a renovation of the house prior to the birth of my daughter. I began to do research about wares that are prepared specifically for the use of humans, yet that aren’t going to damage your health. Even when I purchase towels, curtains, bedding, one of the things I have found is that I can either buy organic products or can get hand-me-downs, which have been washed many times. We bought for our daughter an organic cotton and wool mattress. Those are the kinds of things that really have impacted my life.
What else are you concerned about when making purchasing decisions?
I’m not only worried about my daughter’s development, which I think is one of the main concerns of consumers, but I’m also concerned about the total impact I have. When my daughter was born, I used cloth diapers; there is still a big question about cloth diapers since a lot of energy is used to heat the diapers to clean them and then they also require bleach. A large use of energy is involved in that particular process. What I can do to circumvent this energy drain is to use a product called the gDiaper that is being marketed out of Portland. It has a durable cover with a disposable insert that soaks up the waste. You can throw it into the toilet and it goes through the sewer system, which is quite a bit less of an impact than using cloth or disposal diapers.
Is there anything you wish that conscious capitalists could do a better job with when they create products for the progressive market space that is important to you?
These products would be much more attractive if the prices were lower. . . Currently these products are more expensive. I do think for a business person who wants to start a business that appeals to the green marketing niches, they need to think seriously about family demographics and not only about products that appeal to that market, but also about the price point and how non-green competition fits into that price point.
I also believe that conscientious capitalists need to take a comprehensive approach when creating their enterprises to make sure that they not only create products appealing to this market, but that their corporate values are authentic and consistent throughout the company to the ideals that are important to consumers in this space.[1]
As a conscientious consumer, are you utilizing any technology such as the Internet in your purchasing decisions?
As far as the Internet is concerned, I use it all the time. I used the Internet for help when Genevieve had a condition that is the flattening of the head. My first pediatrician was just putting me off, so I basically did the research myself and I found a chat group on the Internet devoted to this health issue in children. It was far more helpful than even the medical community could be because each of the mothers would tell you exactly the steps you needed to take.
The primary advantage to the Internet is that you really are not alone in your problems and in your searches. There are so many other people out there that have the same issues and difficulties and desires, and they can help you to get all the information that you need. I think with regard especially to medical issues because the medical community is so fragmented and so huge, that when you come into the medical industry as a patient, you need to speak to other patients who have had other similar issues as yours. As a technology the Internet brings us closer as a community.[2]
Conversation 2: Gwynne Rogers, LOHAS (Lifestyles Of Health And Sustainability) Business Director, The Natural Marketing Institute.
Gwynne Rogers analyzes the values and behavior of the conscientious consumer or “LOHAS consumer,” a market segment measured by The Natural Marketing Institute. The Natural Marketing Institute (NMI) is a strategic consulting, market research, and business development company specializing in the health, wellness, and sustainability marketplace. NMI’s “dynamic capabilities focus on the well-being of people and products, and the environmentally and socially responsible sustainability of the planet. And with over $200 billion in goods and services, combined with unprecedented growth, the world of health, wellness and sustainability is impacting every aspect of consumers’ lives.”[3]
What does the Natural Marketing Institute (NMI) measure when conducting research?
NMI measures consumer attitudes and behavior in the LOHAS marketplace.
According to the LOHAS organization’s web site, “Lifestyles of Health and Sustainability (LOHAS) describes a $228.9 billion U.S. marketplace for goods and services focused on health, the environment, social justice, personal development and sustainable living.”[4]
What survey methodology is utilized to generate the LOHAS Database?
We survey 2,000 U.S. adults every year. Our sample matches U.S. Census demographics, so we know that our sample is representative. It is accurate to plus or minus 2 percent at the 95 percent level.
What are your future predictions for the LOHAS market place that may be of interest to the conscientious capitalist?
What I expect to continue to happen is that for every “step in the right direction” that businesses take in terms of offering more responsible products, there is a portion of the population, the LOHAS consumer, that is going to buy into that and then continue to expect more. For example, much progress has been made over the past few years in developing healthier products and packaging made with higher recycled content, such as Starbucks’ new cup that is the first with recycled content to be approved by the FDA. That is a pretty big deal. As much as we continue to make really solid progress, the LOHAS consumer is going to continue to push that envelope. And that is going to continue to put the onus back on manufacturers to come up with more and more responsible ways to do their business. . . . In terms of differentiating a leader from a follower, that leader is going to have to continue to innovate. And innovation is going to express itself in things such as:
- Fair trade for buying coffee
- Sustainable fisheries
- Locally grown food
- Artisans
- And certainly organic products.[5]
Conversation 3: Michael Crooke, co-founder, Revolution Living and former CEO and President, Patagonia, Inc. and Patagonia’s parent company, Lost Arrow Corporation.
Michael Crooke shared his thoughts about conscientious consumerism.
You were an early member of the LOHAS market space. What do you think of the growth of this market space?
I really don’t think much of the LOHAS Acronym—Lifestyles of Health and Sustainability. I think it’s very, very limiting. If you even look at the LOHAS conference, there are very few true businesses that are truly successful that are really making it. I believe there is a much larger movement: The Cultural Creatives, a term coined by Paul Ray. He has identified maybe 50 to 70 million people that have a propensity to pay for public goods, i.e. environmental or social goods.
I think this market space is much bigger than that. I think what is going on is not a paradigm shift, but a new Renaissance II, where in every field–whether it be energy or building or whatever-it might be the big C-Creativity, as framed and described by Mihaly Csikszentmihalyi in his book, Flow: The Psychology of Optimal Experience. In all of those fields there is a great deal of creativity going on because of a need for moving more toward sustainability.
People are fed up with capitalism 1A. While capitalism in itself is a great idea, one of the greatest inventions in the history of man, it needs to change. The corruption, the wars, the this and the that which are going on are based on greed and oil. There is a large group of people-the progressives-who want to find these new brands and connect to these brands.
What do you mean by the term “progressives”?
Progressives are people who are pushing the envelope, who aren’t interested in doing things the same way as their parents and grandparents did. Progressives are those people that start trends. They are people who really think outside the box in a continuous way in all aspects of their lives. These are the progressives, and these progressives are the people who are driving consumer sentiment and society in general. Progressives want to be positive about what can happen. They don’t want to look at the glass as half empty; they want to look at it as half full. They don’t want someone getting down on them because they aren’t driving a Prius. They want to feel as if they are doing the right thing and they are contributing towards this movement.
The progressive group is much larger than the LOHAS group. Progressives encompass a much larger demographic. In fact it’s not a demographic at all; it’s a psychographic. It’s people who want to be inspiring and encouraging. It’s people who have continuous learning going on in their lives, whether they are 80 or 19 years old. The progressives are those people who are driving consumer sentiment and society in general.[6]
Driving Philosophies Revealed in These Three Conversations
It’s clear that a tipping point of interest is on the rise with this market segment whether you refer to them as progressives or cultural creatives or members of the LOHAS community. Some of the driving philosophies that are revealed in these three conversation excerpts are that:
- Extensive expenditures have been made by LOHAS consumers documenting that it is possible to make money while making a difference.
- Health and parental concerns are underlying reasons for people to become conscientious consumers interested in purchasing responsible products.
- Technology that brings us closer together and fosters community is of interest to this market segment.
- High expectations are a hallmark of the conscientious consumer and something conscientious capitalists need to consider when developing new products and services for this market segment.
- Products that are produced and manufactured in a manner that helps promote the sustainability of the planet attract a large and loyal following of consumers.
- Conscientious capitalists are a major factor in causing a new Renaissance II to emerge.
If you are a business practitioner who wants to be a pioneer in the new Renaissance II, the “Conscientious Capitalist Checklist” can be utilized as a guide to transform an enterprise with conscientious capitalism.
Conscientious Capitalist Checklist Source: Provided with permission to reprint from Mentorography, Inc. © Mentorography, Inc. 2006 All rights reserved. Mentorography® is a registered service mark of Mentorography, Inc.
[1]Sarah Wauters, Conscientious Consumer, Mother of Genevieve and T-shirt Entrepreneur in an interview with Molly Lavik on May 3, 2006.
[2]Ibid, August 1, 2006.
[3]Natural Marketing Institute, “Welcome,” http://www.nmisolutions.com/, accessed May 26, 2006.
[4]“Background,” http://www.lohas.com/about.html, accessed May 16, 2006. (link no longer accessible).
[5]Gwynne Rogers in an interview with Molly Lavik on May 12, 2006.
[6]Michael Crooke in a Mentorography, Inc. interview on May 16. 2006.
