Saving our planet; one bag at a time

July 11, 2008

The politicization of green marketing

Filed under: Environment — Kaajal @ 4:02 pm

Green bullying? I think the cause is worth it.

I just read an article where the author is outraged by Wal-Mart dictating green parameters to their suppliers for the products they buy. I’ve reproduced the story below.

I imagine Wal-Mart’s reputation as a bully has some element of truth, but suppliers still queue up to do business with them. It’s a choice they make, even after all the horror stories they hear.

If Wal-Mart were to ask us to supply them bags, I would say no because we’re not interested in doing immense volumes at wafer thin margins. But then that’s me. Exercising a preference as every businessman has a right to do. While I prefer to make better quality products and offer superior service and customisation to even small buyers, it is perfectly legitimate for a company to want to do colossal volumes at tiny margins.

Wal-Mart shoppers come looking for the best prices and it is equally legitimate for Wal-Mart to negotiate to get the best prices they can.

The fact that they are combining their normal business practices with a greener perspective is wonderful. Read the story below and you might agree that the shape of a noodle is less important than the state of our planet.

My take is that what Wal-Mart is doing is good. Green consciousness in businesses often has to be thrust down some throats. Free markets are a valuable thing, but I wouldn’t call this anything else.

Saving Earth, one noodle at a time
Peter Foster, Financial Post Published: Friday, July 11, 2008

According to a story in this week’s Financial Post Business magazine, Lee Scott, CEO of retailing behemoth Wal-Mart, deemed the noodles in Hamburger Helper guilty of “unnecessary curliness,” so he browbeat their producer, General Mills, into straightening them out.

As with so much corporate lunacy these days, this vignette is rooted in the alleged need for corporations to take a conspicuous lead in forestalling catastrophic climate change. You see, curly noodles take up more space than straight noodles and thus require larger packages. So, due to Mr. Scott’s intervention, the Hamburger Helper box is now 20% smaller, with — according to General Mills — an annual saving equivalent to taking 500 trucks off the road.

One assumes that Mr. Scott’s crusade will now bring him into conflict more broadly with the pasta industry, whose products display a shameful array of shapes that require redundant packaging. He will no doubt be seeking the eradication of the spirals, bow ties and tubes of fusilli, farfalle and penne in favour of more compact spaghetti and tagliatelle. Otherwise we might be forced to conclude that Mr. Scott has something against consumers of Hamburger Helper, whom he seems to think can make do with utility pasta. When will he start editing alphabet soup?

I always regarded tales of Wal-Mart’s terrifying “power” as nonsensical, based on confusing economic heft with political clout. Now I’m not sure. For Wal-Mart to squeeze its suppliers in the name of customer value and profitability is sound business; to twist suppliers’ arms to save the planet drifts into dangerous politics, and potentially lousy economics.

In my Wednesday column, I noted that the otherwise delightful animated film Wall-E portrayed a world depopulated by crass materialism, of which the main pusher was a monolithic and environmentally feckless nightmare version of Wal-Mart named “Buy n Large.” The irony is that Wal-Mart is now determined to portray itself as greener than green.

Indeed, its new, Orwellian, motto is: “For the Greener Good.” And I do mean Orwellian, because Wal-Mart seems to want to play Big Brother to its suppliers.

Straightening out Hamburger Helper is just one example of the use of Wal-Mart’s green muscle (perhaps its new symbol should be The In-credible Hulk). Procter & Gamble, too, has apparently been pressured to produce only concentrated detergent,

The problem is that the Hamburger Helper intervention might burnish Wal-Mart’s CSR credentials, but it makes General Mills look stupid, and undermines the free market more generally.

The Hamburger Helper intervention might burnish Wal-Mart’s CSR credentials, but it makes General Mills look stupid, and undermines the free market more generally

General Mills was either inefficient in providing its Hamburger Helper in a form that consumers didn’t want, and which involved waste packaging, thus damaging its own profitability, or, if its consumers really did like their curly pasta, it has sacrificed them to environmental bullying.

I sent an e-mail to General Mills asking– among other things– about the role of Mr. Scott, why Hamburger Helper was curly in the first place and whether any market study had been done on how consumers felt about the shape shift. The company claimed that consumers were happy with the changes, and ignored the questions about Mr. Scott and the pasta’s shape. It also asserted that General Mills had been “focused on efficiency and minimizing our impact on the environment for decades.” But that’s the point. Economizing on packaging and raw materials is a critical aspect of any business, as is responding to, and anticipating, consumer wants.

Green marketing is hardly a new phenomenon. Almost twenty years ago, Dave Nichol, the marketing genius who spearheaded Loblaw’s President’s Choice brand, said, “I think in the future we’re going to look back at this point in time as the start of what is going to be the most important revolution in our society — the politicization of the consumption process.”

It was an astonishingly prescient choice of words, although what Mr. Nichol was in fact talking about was the power of consumers “to vote for the environment at the cash register.” Things have turned out somewhat differently, significantly due to climate change hysteria. Corporations now seem to imagine that it is their role to be out in front of consumers — indeed, that they should force consumers into the paths dictated by radical NGOs. They also pressure their suppliers as a means of taking the heat off themselves. This thrust is inevitably pushed farther by a growing army of environmental consultants and “licensers” who earn fat fees for nagging their clients, and/or providing them with a “Cloak of Green”

Corporations, by subscribing to vague sustainability, are unwittingly leaving themselves open to an almost infinite range of further demands and interference. Whether they realize it or not, they are subscribing to the blanket condemnation that markets do not work and that the whole capitalist system represents one giant “market failure” that requires fretting and tinkering at every level, from noodle shapes through carbon labeling to the calculation of “food miles.” That way lies madness, but that’s where we’re heading.

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