July 19, 2008

A Conversation with Chris Nunes from Cornerstone Strategic Branding (NY)

A few weeks ago, Chris Nunes, CEO of Cornerstone Strategic Branding based in New York visited us and spoke to my team on Eco-Branding. I have known Chris for many years and his company is currently working on a packaging graphic project for one of our snack brands. I asked him to write about the theme for the blog. Here is what he sent me...

Small is Good Again - The Emergence of Eco-Brands

I have been on the road traveling to different markets reporting on the state of environmental branding and packaging, and espousing its benefits. As CEO of Cornerstone Strategic Branding in New York and Sao Paulo, Brazil, I have had the opportunity to work with a wide range of package goods brands competing in international markets such as the United States, Mexico, Canada, Brazil, Venezuela, Argentina, South Africa, United Kingdom, South Korea, Pakistan, and many, many others. My company has been in business for 18 years and during that time I have secured and worked with clients in over 23 countries including those in North America, Europe, Asia, Africa and the Middle East.

A topic of continuing interest to me and to an increasing number of my clients are the trends to increased use of environmentally friendly packaging and the introduction of a new class of brands which I call “Eco-Brands”. With the help of some of my colleagues at CSB, I have researched these trends extensively and the result is a comprehensive presentation on the subject with a global perspective.

I discovered that there is a lot more activity going on in the use of environmentally friendly packaging than what we see here in the U.S. What was even more striking is the emergence of this new class of brands called Eco Brands.

These are brands which from the moment of origin are created with a mission, a brand positioning and “value set” that clearly focus the brand on behaving in a way that is protective of the planet. There are many ways that Eco Brands achieve this with their packaging, in addition to how they also reflect this in their product and everything that they do.

Some of these brands only use recycled materials in their packaging such as recycled/post consumer paperboard, recycled PET plastic resin (RPET), recycled glass, etc. Some of these brands use these materials in combination with new materials called bio- resins made from sustainable plant materials such as corn and cane sugar starches that replace traditional petroleum based resins, made from a non- renewable resource.

Some reduce their use of these materials altogether and eliminate complete “layers” of packaging to become more environmentally friendly, while reducing costs. Others do all this and also print their packaging using water and/or vegetable based inks with very low VOC’s (volatile organic compounds). These inks can replace traditional inks formulated with environmentally dangerous solvents high in VOC content.

The most interesting thing I learned about these Eco Brands is that some of these brands have been around for a while and how, in a very short period of time, have grown in sales significantly. Take for example the brand Burt’s Bees. Their website defines the brand ‘s mission as follows: “We create natural earth- friendly personal care products formulated to help you maximize your well being and that of the world around you”. The intriguing thing about this brand is that it has been around since 1984 and as recently as 2003 had only $8 million in sales. Just 5 years later, what do you think their sales are? Try $250 million.

Another example is the Eco Brand Seventh Generation. Seventh Generation is a household cleaning products brand with a line that includes dishwashing detergents, surface cleaners, paper towels, toilet tissue, disposable diapers, etc. The company and brand was established by Jeffrey Hollander who was once president of the Rainforest Foundation and on the Board of Directors for Greenpeace.

Seventh Generation was founded in 1988 and generated $1million is sales in 1989. Ten years later sales volume grew somewhat modestly and incrementally to reach $11 million in 1999 and grew to $25 million in 2004. What do you think their sales are now? Try approaching $100 million.

These examples illustrate the power of the Eco Branding concept, even if you start small. Consumers are not only now buying products that deliver demonstrable benefits equal to or superior to traditional, non –eco products, they are also buying into a value set that is aspirational to them.

The Eco Branding concept says that you can, in fact, start small, do good, build an environmentally positive track record and succeed. This approach is beginning to debunk the myth that many packaged goods companies have ascribed to for years that says new products have to be tested to validate wide scale share and volume potential in order to be commercially viable.

The most compelling news of late on this subject is that the continuing escalation of the price of oil, and it’s effect on rising costs of packaging materials and a host of product ingredients and materials, has now made the cost of goods for Eco Brands, which have historically been a bit more expensive than traditional brands, much more competitive now in many categories.

This was underscored by a recent article in the Wall Street Journal entitled “Green Products Gain From New Price Equation”. One example given is a line of compostable dinnerware made by a Colorado company called Eco-Products. Eco Products manufactures their dinnerware using a bio resin made from corn starch and does not use a petroleum based resin. Therefore, their cost of goods has remained stable while the costs of petroleum based resins have continued to escalate, thereby now making Eco-Products dinnerware prices competitive to traditional dinnerware brands made out of petroleum based plastics.

The message to the marketing community is to take note of this phenomenon. Re-orient your thinking. Think small, do good, build a positive environmental track record and ride the Eco Branding wave.

With the continued escalation of oil prices into the foreseeable future, and the rising consumer demand for products that are friendly to the environment, the future of Eco Brands has never been brighter.

Christopher Nunes
Cornerstone Strategic Branding, Inc


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