Environmental responsibility has been added to the corporate agenda in the 21st century. Businesses are held accountable by both the government and society to operate in environmentally friendly ways. Green marketing is used by companies to communicate a brand's emphasis on business practices or products that are beneficial for the environment.
Growing consumer awareness and interest in preserving and utilizing natural resources has contributed to an influx in sales and marketing of environmentally friendly and reusable products. "Organic" has become a key word in marketing. Sales of organic products reached $26.6 billion in 2009, according to Barbara Haumann in her April 2010 report for the Organic Trade Association. $24.8 billion was generated from organic food sales and an additional $1.8 billion was realized through non-food organic products.
Enhanced Environmental Awareness
The Encyclopedia of Business (2nd Edition) pointed out that a benefit that resonates with industry and consumers alike is the expansion of environmental awareness. As companies market their green-friendly efforts and products, they simultaneously encourage the green initiative. This perpetuates the efforts by other companies to operate with more green responsibility and causes consumers to remain vigilant in holding companies accountable for their actions.
Keeping up with environmental expectations can be expensive for a company. Preserving rain forests, recycling, reducing waste and other green-friendly actions take time, resources and concerted effort. A benefit of green marketing expansion is that consumers may become more comfortable and accepting of paying higher premium prices to acquire earth-friendly products or to support companies that engage in green activities. The Encyclopedia of Business acknowledges that it is a crucial task of marketers to get customers to take on these premium prices.
A challenge faced by early adopters of the environmental movement was the limited supply of earth-friendly food and non-food products. Companies that initially sold organic foods faced high prices due to a limited number of organic farmers and suppliers. However, Haumann notes in her report "farmers’ markets, co-ops and CSA (community-supported agriculture) operations gained a lot of interest as consumers increasingly look for locally and regionally produced organic foods." Grocery retailers also benefit from stronger local supplies of organic food products.