Americans happy to pay more to go green

Environmental issues remain a concern for the majority of Americans with more than a third (35%) happy to pay more for environmentally friendly products, according to Mintel’s latest report on green living.

“Given this increased interest in the environment over the past few years, nearly every segment of consumer products now offers a ‘green’ option for shoppers,” said Chris Haack, Mintel senior analyst. “Food and beverage and personal care are the two most mature categories and account for the majority of green products in the marketplace.”

Food and beverage

After rapid sales growth of more than 24% from 2006 to 2008, the natural and organic food and beverage category saw only slight growth in 2009 (+1.8%) as the recession took its toll on nearly every sector of the consumer goods marketplace. Despite this stall, Mintel forecasts sales in this segment to grow nearly 20% from 2010 to 2012.

Only 21% of organic food buyers have cut down or eliminated organic purchasing, while 20% have switched to less expensive organic options, says Mintel. Meanwhile, nearly half (48%) are buying as much or more organic food than before the recession. This suggests that organic food is a core lifestyle element for many people who may make cuts in other areas of their budget before they will turn away from organics, say researchers.

Personal care

Sales of green personal care products increased by 18% from 2006 to 2008 and similar to food and beverage, saw only a slight incline in 2009 (+1.2%). This segment is poised to resume rapid growth once consumer spending begins to recover from the current downturn, says Mintel. One-third of all consumers have never tried organic or natural personal care products, suggesting there is plenty of room for growth in this market.

According to Mintel’s Global New Product Database (GNPD), new products with an organic or natural claim only encompassed 5% of all beauty and personal care product launches in 2006 but increased to nearly 10% in 2008 and held steady through 2009.

Haack said Mintel expected to see a growing trend toward upscale green personal care products targeted to spas, salons and other high-end retail outlets in the coming years.