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Distribution is key to the success of green brands

Green brands need to focus on distribution if they are to widen appeal of sustainable products. Organic Monitor research finds the most successful green brands are those who have expanded distribution into mainstream channels. Such brands have managed to break ‘the green glass ceiling’ and outperform the market.

In spite of high consumer interest, most sustainable products have low market share. For instance, natural products represent just 3% of personal care product sales in Europe. Organic foods generate 4% of total food sales in North America; the market share of ethical textiles and green household cleaning products is even lower in these regions, below 2%.

Green brands need to ‘think outside’ specialist retail channels. (Photo: shutterstock.com © Olesia Bilkei)

Green brands need to ‘think outside’ specialist retail channels. (Photo: shutterstock.com © Olesia Bilkei)

According to Organic Monitor, a major factor behind the low market share is most green brands are focusing on specialist outlets. “Few natural personal care products are in mass market retailers, whereas the channel generates over a third of cosmetic and toiletry sales in the US.

Reaching out to mainstream consumers

Green brands need to ‘think outside’ specialist retail channels if they are to broaden appeal. Aveda, for instance, has also been successful in the natural personal care industry because of its distribution strategy. Aveda is positioned as a professional hair care brand in salons and Organic Monitorresearch shows it is the premier brand of natural personal care products, with distribution in over 7,000 salons.

A major challenge for green brands is channel selection: what outlets to focus on? To add complexity, the success of sustainable products in some channels creates competition. For instance, private labels marketed by mass retailers often ‘cannabilise’ branded product sales. Indeed, in many cases, the leading brands of organic products in North America are owned by retailers. In Europe, DM drugstores’ Alverde has taken up high market share to become the leading private label of natural personal care products.

Eventually, the complexities associated with distribution have led some green brands to set up their own retail networks. In the wake of The Body Shop, which pioneered the ethical retailer concept in the 1970s, a growing number of green brands such as Melvita and Korres are opening stores across the globe.

Pioneering green brands / companies will be participating at upcoming 6th North American edition of the Sustainable Cosmetics Summit, which will be hosted by Organic Monitor in New York on 14-16th May; they include Aveda, The Body Shop, Burt’s Bees, Léa Nature, Hain Celestial, etc.

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