Souring on Green?

28 May 2008 It is hard not to notice that the boom in sustainable consumer products has coincided with one of the strongest economies in recent memory.

But now that businesses worldwide are bracing against the down-turned U.S. economy -- a downturn which by all measures appears to be barreling towards recession – how will sustainable business be affected? Will consumers be as likely to part with their recession-prone dollars for pricier green goods? Will businesses continue to seek out sustainable practices? Will investments in green technology come to a halt?

Experts interviewed for this story agree that while green business may be dinged by a faltering macro economy, the movement is too old, too big and too important to take a disproportionately severe beating when compared to other sectors.

“We’re not seeing any kind of significant change in sensitivity towards these issues yet – though if we have a recession the growth of everything will go down,” says Nicholas Eisnberger, managing principal of GreenOrder, the New York-based sustainability consultancy. “2007 was a tipping point in peoples’ awareness. The idea of sustainability has penetrated the mainstream consciousnesses in a way that hasn’t happened before.”

Rona Fried, of Progressive Investor magazine and SustainableBusiness.com, said that consumers who drive the sustainable product movement are the educated affluent who are largely immune from economic downturns – something that has bolstered the movement’s buoyancy.

“It has been shown that recession after recession, people who value organic products are going buy organic no matter what,” Fried says.

According to the Organic Trade Association, organic food penetration has more than tripled from 0.8 percent of total U.S. food sales in 1997 to 2.8 percent in 2006. During that period sales growth in the sector was consistently in the double-digits in spite of the 2001 recession.

Joel Makower, editor of GreenBiz.com and a sustainable business consultant, believes that the reasons people consume green products is varied and complex: health, fashion, quality, politics, responsibility and financial prudence all play a role. As such, the face of these consumers now includes many demographics and not just the rich – something which will protect the sector in the face of economic adversity.