US shoppers going green despite struggling economy

Fri Nov 20, 2009 9:01am EST

Related Topics

* Sustainable products doing well

* Economic troubles trigger consumers' conscience

By Basil Katz

NEW YORK, Nov 20 (Reuters) - Despite the worst U.S. recession in decades, sales of organic and sustainable products have continued to grow, experts say, with shoppers willing to spend a few more dollars in a bid to become more green.

U.S. supermarket sales of environmentally sustainable or "ethical" products -- from energy-efficient light bulbs to organic produce -- will rise about 8.7 percent in 2009 to nearly $38 billion, according to a recent study by Packaged Facts, a market research provider.

President Barack Obama's commitment to tackle climate change, a string of scandals over tainted food and effective marketing of sustainable products have helped convince more Americans, whose environmental credentials lag behind Europeans, to buy green.

"I've been reading about carbon footprints," said Lindsey Hoffman, 24, as she selected organic lettuce at a Whole Foods Market WFMI.O in Manhattan, "and though I'd prefer to go to a farmer's market, this is better than anything else."

"When I walked in I saw gorgeous asparagus, but as it's $4 a bunch and flown in from Peru, I stayed away," she said.

While sustainable and organic goods have traditionally occupied the premium shelves of supermarkets, an increasing number of retailers such as Wal-Mart Stores Inc (WMT.N) and Safeway Inc (SWY.N) have expanded their offerings and some prices now rival conventional products.

Some experts say the global economic crisis and the battle against global warming have prompted consumers to think more about purchases -- both financially and environmentally.

"The financial crisis reminded people of the unintended consequences of collective behavior," said Scott Bearse of Deloitte Consulting, who added that once people go green, they generally stay green.

Shelly Balanko at the Hartman Group, a marketing consulting firm that specializes in sustainable goods, said shoppers were realizing that green products offered better quality, along with causing less harm to the environment.

She said buyers now thought, "'If I buy this, it will be less wasteful and I'm going to get good value for my dollar.'"

Some companies are appealing to these lifestyle changes, such as Kimberly Clark (KMB.N), one of the largest manufacturers of paper towels and diapers, which launched Scott Naturals, a paper products line using recycled fibers.

"There is much more of an interest in this in the last couple of years," said Kimberly Clark spokeswoman Kay Jackson.

Americans spent a total of $511.9 billion on groceries at drugstores, supermarkets and mass retailers in 2008. So far this year shoppers have spent 1.9 percent more than the same period a year ago.

Sales of goods specifically labeled organic rose 17 percent to $24.6 billion in 2008, according to the Organic Trade Association.

"The more I read and hear about it, the more I'd like to go completely organic, 100 percent," said Richard Drew, 35, a television producer, as he shopped at a natural body care shop in Manhattan. (Editing by Michelle Nichols and Vicki Allen)

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