Mintel: Americans Willing to Pay More for Green Products

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March 30, 2010

The environment remains a concern for the majority of Americans and more than one-third (35 percent) of consumers polled indicate they would pay more for environmentally-friendly products, according to Mintel’s latest report on green living.

“Given this increased interest in the environment over the past few years, nearly every segment of consumer products now offers a ‘green’ option for shoppers,” said Chris Haack, Mintel senior analyst. “Food and beverage and personal care are the two most mature categories and account for the majority of green products in the marketplace.”

After rapid sales growth of more than 24 percent between 2006 and 2008, the natural and organic food and beverage category saw only slight growth in 2009 (1.8 percent) as the recession took its toll on nearly every sector of the consumer goods marketplace. Despite this stall, sales in the segment are forecast to grow nearly 20 percent from 2010 to 2012, according to Mintel.

Furthermore, only 21 percent of organic food buyers have cut down or eliminated organic purchasing, while 20 percent have switched to less expensive organic options, including store brands. Meanwhile, nearly half (48 percent) are buying as much or more organic food than before the recession. “This suggests that organic food is a core lifestyle element for many people who may make cuts in other areas of their budget before they will turn away from organics,” Mintel said in a statement.

Although sales of green personal-care products increased by 18 percent from 2006 to 2008, similar to food and beverage, it saw only a slight increase of 1.2 percent in 2009. “This segment is poised to resume rapid growth once consumer spending begins to recover from the current downturn,” according to Mintel. “One-third of all consumers have never tried organic or natural personal care products, suggesting that there is plenty of room for growth in this market.”

New products with an organic or natural claim only encompassed 5 percent of all beauty and personal-care product launches in 2006 but increased to nearly 10 percent in 2008 and held steady through 2009, according to Mintel’s Global New Product Database (GNPD).

“We expect to see a growing trend toward upscale green personal care products targeted to spas, salons and other high-end retail outlets in the coming years,” Haack said.

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