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Green products can sustain price premium, report

By Lorraine Heller , 21-Dec-2007

Americans will be willing to pay more for environmentally friendly products in 2008, despite an overall decline in consumer spending, reveals a new study.

Results of a survey conducted between December 11-14 2007 indicate that people who purchase natural and organic products would fork out an extra premium, and are particularly interested in supporting the 'green' practices of companies.

 

 

 

"The study revealed that consumer interest in healthy, organic and sustainable products is on the rise, showing a commitment to organic foods and green products not only for personal health benefits but also for the environment," according to the report.

 

 

 

Conducted by Mambo Sprouts Marketing, a natural and organic direct marketing company, the survey tracked the buying habits of 1,000 natural product consumers and forecasted their expected purchases of 2008.

 

 

 

Soaring energy costs and a deterioration in the housing market are expected to contribute next year to an overall decline in consumer spending, however seven in ten of the 'natural' consumers surveyed said they would remain willing to pay 20 percent more for environmentally friendly products.

 

 

 

Produce remained top of the priority list for organic products, with 60 percent of respondents indicating they would purchase these.

 

 

 

Some 54 percent said they would opt for organic dairy products, while 50 percent would purchase organic child and baby food products

 

 

 

Only one in four or fewer felt it was very important to buy organic in the categories of beer and wine (10 percent) and desserts and snacks (23 percent).

 

 

 

But in addition to the product categories they choose, consumers are also increasingly supporting the concept behind organic and natural.

 

 

 

"Consumers aren't just scrutinizing the products they buy, but want to support businesses and retail stores that have green sustainable practices," said the report.

 

 

 

Over 70 percent indicated it was important to do business with companies that were environmentally responsible.

 

 

 

For the coming year, while price was the overriding factor in decisions as to where to shop, cited by 60 percent of respondents, one in two or more consumers also identified the selection of healthy organic products (56 percent) and availability of organic produce (49 percent) as key factors as well.

 

 

 

Earlier this year, Mambo Sprouts Marketing conducted another survey that revealed that consumers remain confused about the use of organic product claims.

 

 

The survey revealed a mistrust of the US Department of Agriculture's (USDA) organic seal, and concerns that the agency's organic standards were declining or weaker than they would like.

 

 

 

The findings reinforced the importance of easy-to-understand labels and consumer education, as confusion or hesitation in the supermarket aisle will ultimately impact purchasing decisions.