Good for Whom?

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Forget playing up the environment, data increasingly shows that it's better to stress a product's health benefits for humans.

When the dairy cows at Horizon Organic's farms get sick, they are treated with aspirin and massages. The cows' feed is grown in soil that is carefully cultivated to stay rich and healthy through crop rotation, composting, and careful tilling procedures. In fact, all the farming practices on Horizon's farms are geared toward producing dairy products "in harmony with nature." But do consumers care? Not really, according to Clark Driftmier, vice president of marketing at Horizon, the nation's largest organic dairy company. So, rather than emphasize the environmental aspects of organic farming in its advertising and packaging, the company more often highlights the perceived health benefits of milk and yogurt produced without pesticides, hormones, or antibiotics.

Horizon's strategy makes a lot of sense to the folks at The Hartman Group. The Bellevue, Washington-based consulting firm's recent studies have shown that health and wellness issues are increasingly more important in the green marketplace than environmental concerns. By shifting the focus onto health and wellness, and away from strictly environmental themes, marketers such as Horizon can vastly increase the size of their audience. "There was never a very large environmental market - there was a lot of talk, but not a lot of dollars on the table," says Laurie Demerritt, executive vice president at The Hartman Group. In contrast, there is already a $66 billion annual market for wellness products, such as supplements and organic foods, according to Hartman research.

Demerritt is quick to point out that not all environmental shoppers have shifted their attention away from the health of the planet to their own health. But the emphasis by marketers on the well-being of consumers resonates with a larger audience than the indirect connection to health that environmental measures promise. "This is much more tangible," says Demerritt. What's more, the prominence of health-care issues on the national agenda has inspired more people to become increasingly aware and proactive in caring for themselves, further fueling this current trend.

This shift in the factors driving the green market has dramatically changed the way that Hartman studies consumers. Earlier surveys focused on segmenting them into unique environmental categories, with accompanying demographic patterns. More recent studies have used a gradual core-to-periphery lifestyle model, placing consumers on a scale of health and wellness activities. Hartman believes this method is more useful to marketers because it does not place consumers into strict categories of behaviors and demographics. So, while the environmental segmentation can still be helpful for some marketers, those wishing to reach the much larger health and wellness market are better served by the lifestyle model.

Back in 1996 and in 1998 Hartman did place consumers into six categories, each with varying levels of environmental concern and consumer behavior. This segmentation system found one group - the True Naturals - which actively tried to help the environment through its purchase behavior. While this group increased from 7 percent of the population in 1996, to 11 percent in 1998, it remained a limited market. The other three environmentally-inclined segments (New Green Mainstream, Affluent Healers, and Young Recyclers) which made up an additional 42 percent of the public in 1998, have not lived up to their potential as green consumers. "People said they were interested in ecological products, and said they were willing to pay more, but we haven't seen that in the sales," says Demerritt.

In the new core-to-periphery model used last year in several Hartman studies, consumers were classified on a scale which measured the level of their health and wellness lifestyles. If the consumer market were a sphere, those most involved in such lifestyles would be at the core, and those least involved would be at the periphery. In the September 2000 Wellness Lifestyle Shopper Study, 14 percent of U.S. households were classified as core wellness shoppers, meaning they had high levels of dietary supplement purchases, organic and natural food consumption, and healthy lifestyle traits, such as regular exercise. Fifty-five percent were mid-level, and 30 percent were at the periphery. Hartman believes the large market of core and mid-level wellness consumers are ripe targets for marketers who can highlight the health benefits of their products or services. And even consumers at the periphery can be wooed by marketers who understand what those consumers are looking for.

One group taking full advantage of this trend is the organic food and beverage industry, which is growing by 15 percent to 20 percent a year. While the organic farming process was originally designed with benefits to the ecosystem in mind, consumers tend to buy such products because they think it's better for them. In their Fall 2000 Organic Lifestyle Shopper Study, Hartman found that 66 percent of organic food purchasers are motivated by health and nutrition factors, while 26 percent are motivated by environmental factors.

The Organic Lifestyle Study also identifies 6 percent of the public as core organic consumers, 35 percent as mid-level, and 59 percent as periphery. More importantly, the study shows marketers which "dimensions," or attributes, of organic products are most important to the different types of consumers. Core consumers are most concerned with the authenticity and community benefits (e.g. environmental impact) of the product. Mid-level consumers care more about the experience (e.g. retail setting) and expert opinion (e.g. feeling that doctors or media figures endorse a product). Periphery consumers are looking for convenience and comparability (e.g. it looks as robust as the non-organic version). All three groups are attracted to the internal benefits of organics (e.g. health and well-being).

Depending on the product, and which group a marketer was targeting, the advertising, packaging, retail presentation, and information presented could be altered. "There are 20 different things I could say that are positive about organics," says Horizon's Driftmier. "But the message that appeals to core organic consumers might not appeal to periphery customers, and those are the segments we need to reach to keep on growing."

As Hartman's studies would suggest, Horizon's health-oriented approach, availability in supermarkets, and competitive prices, seem to be working. Company revenue has grown 50 percent to 100 percent each year for the past nine years. The cows are earning those massages.

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