[GRRN] reply to Jesse White and Steve - in V99 #268

Nelson, Eric (Eric.Nelson@METROKC.GOV)
Tue, 7 Sep 1999 13:35:37 -0700

In re: questions/comments of Jesse White, and "Steve" of 9/7
(repeated below):

> From: Jessewhite 9/6/99
"...Look at the content, look at the packaging, and you'll
find that the same product: min 10% post consumer recycled file folders sell
for $6.99 in the "recycled content" packaging and $3.29 in the regular
packaging. The R content of the product is the SAME, the packaging results
in a 90% increas in price.

"I cant understand why industry chooses to mark up recycled
content products as a 'premium' when packaging the product to reflect its
recycled content."

Sellers apparently perceive a market among people to whom recycled
content represents added value and who are willing to pay a premium for this
value. Indeed, studies by EPA and others have established that a tiny
fragment of the population (about 5% of the total) will spend more for this
perceived value. Since optimal pricing strategy is to set prices at exactly
"what the market will bear," It makes sense to do the extra packaging,
marketing, and distribution work if you think the market will pay you to do
it. Apparently, some vendors have become convinced that government
regulation and activist campaigns will expand this market segment.

I don't think this is going to happen any time soon without product
development support. People are smart. Although they may be initially
attracted to the concept of benefiting the environment through their
purchases, they will be paying attention to price and performance and will
also be scrutinizing their purchases, looking for evidence that they are
actually beneficial to the environment. Some marketers are making ludicrous
environmental claims about products whose price and performance are simply
insufficient to be acceptable to a majority of consumers in the long term.
Every time a smart consumer detects a fraudulent environmental marketing
claim, all producers of environmentally preferable products are losing

It's ironic that governments have spent a lot of money to promote
the perfectly sensible concepts behind environmental products, through
"Buy-Recycled" campaigns, "Environmental Trade Shows," etc, but have hardly
spent a dime to help industry realize those concepts in actual products that
actually work, at acceptable prices. If we are to move sensibly toward
sustainable markets for environmental products, we need to focus on the
fundamentals. In whatever ways we can, we need to help industry develop
sensible and economical products that perform well. For a lamentably brief
time, Washington State funded the Clean Washington Center, which made
striking progress toward effective products and markets, before its funding
was eliminated. Though King County is a relatively small customer, we are
pleased to be purchasing several good and economical products that came into
being through the research supported by Clean Washington Center.
(Fortunately, CWC [as it is now known] is still operating a consultancy to
help other governments and businesses think effectively about this subject.)

The following post reinforces the message that "green marketing"
alone is not sufficient to support environmental product industries. People
are smart. They will not buy products that cost too much or don't perform.

> From: Steve1092@aol.com
"I'm having trouble finding any recycled paper products
anymore. They keep disapearing from shelves...The reason, no one buys them.
It's understandable. I don't really feel like paying double to get a
product even if it is made of recycled material."

You can fool some of the people all the time, and all of the people some of
the time, but you cannot fool all of the people all the time.
- Attributed to Abraham Lincoln

Eric Nelson (206) 296-4324 and Karen Hamilton (206) 296-4317
Environmental Purchasing Program
King County Procurement Services
500 - 4th Ave, Room 620
Seattle, WA 98104

> Environmental Purchasing web-site:
> http://www.metrokc.gov/procure/green