Recent headlines may give eco entrepreneurs a reason to worry!
Clorox Launches Greenworks
Organic Brands Bought Up by Large Corporations
In fact some of the bigger independent players in the natural and organic arena are doing just that according to a recent NY Times article.
“The whole landscape is shifting, and I think everyone is struggling to redefine their strategy in the midst of huge change that ain’t finished,” said Jeffrey Hollender, the president of Seventh Generation, which makes nontoxic household products like cleaners and diapers. “It’s still sort of in the early stages.”
Smaller manufacturers of green products like independents, Simple Green and Seventh Generation may have something to worry about. As going green becomes hip, more and more large companies are either buying out established eco friendly companies or starting their own green divisions. Those who have been around awhile have seen this happen in other types of businesses and know how hard it can be to maintain a socially responsible identity and still grow a business.
The core of the issue is usually the distribution deals that large, established companies are able to make with large well known retailers. For example, it’s much easier for Clorox to sell one more line of products into Wal-Mart than it is for a small eco-cleaner company. Conversely, as Wal-Mart begins to look for green brands smaller companies which once only sold their products to natural stores suddenly have the opportunity to enter the big chains.
Then of course as consumers realize ec- products can be bought without a special trip to their natural grocery store, they forgo their trip and the natural grocery store begins to suffer. Whole Foods, for their part is invested in denying this trend.
Whole Foods, meanwhile, is striving to remain unique as the small upstart brands that have come to define the store are being lured by buyout offers and bigger grocery chains. Whole Foods does not want to compete on price with discount retailers.
“We are just not going to be taken for granted,” Mr. Robb said, adding that the company may drop brands that have “migrated in not a sustainable direction.” The chain, he said, is “going to look for people who want to partner primarily with Whole Foods.”
Perhaps their strategy will work. In the meantime, eco entrepreneurs have some decisions to make: Sell out or fight Goliath. Deciding which is the right choice for your business takes some thought.
Ben and Jerry, founders of the ice cream business which bears their names, attest to the ideological struggles they went through after their sale to Unilever in their book. Various other entrepreneurs chose to stay the course and maintained their share of the green market. A few, such as Anita Roddick of The Body Shop, have been able have been able to carve out a niche market and grow into an international franchise.
Surveying the market, making some educated guesses on where it is going and understanding the natural business cycle are a priority for eco-entrepreneurs today.
What do you plan to do?