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Agrimarketing : September 2009
Frankly, going green is scary. Exec- utives worry that they will need to sacrifice large profits to become only slightly more eco-friendly. But recent research suggests that going green, a near necessity given increas- ing government regulations and heightened consumer concern for the environment, can yield financial gain for your company. In "Green to Gold," Daniel C. Esty and Andrew S. Winston suggest that there is money to be made by going green. Companies that make an effort to go green will likely dispose of fewer pollutants, therefore reduc- ing spending on pollution penalties and waste disposal. Green compa- nies can also use less energy, result- ing in lower energy costs and reduc- ing their dependence on the volatile prices of fuel and gas. For example, Limoneira, a producer of citrus, avo- cados, cherries, and nuts, recently installed solar-powered pumps to irrigate its California land. By giving your commitment to being green a place of prominence in your marketing campaign, you can attract environmentally conscious buyers, increase your sales, and develop customer loyalty. (Just think of the success of the Toyota hybrid gas-electric car, Prius.) It also has the potential to motivate current employ- ees and attract new employees. Recent innovation has brought forth a number of products and solu- tions that will help your customers and stakeholders be more green, including seed that requires less water, variable-rate fertilizer, more energy- and fuel-efficient machinery, more efficient irrigation practices, products for and from organic farm- ing practices, and packaging made of recyclable or recycled products. You can also cater to environ- mentally conscious consumers by increasing your representatives' knowledge of reduced or no-till farming methods (which increase water availability and biodiversity while decreasing erosion), organic and sustainable farming practices, and alternate energy sources such as solar and nuclear power. Companies can also devise or reassess commercial avenues for their byproducts or develop processes to generate revenue by helping customers deal with product disposal. (Dell, for example, charges customers $25 to dispose of obsolete computer equipment.) GETTING STARTED You can take steps toward being green in any of the following areas: energy, water use and pollution; chemicals, toxics, and heavy metals; air pollution; and waste and byproducts management. While catching the green wave isn't easy, there are some simple ways to get started, such as switch- ing to energy-saving lightbulbs, set- ting office computers to shut down when not in use, or investing in motion sensors to shut lights off when no employees are present. Product delivery strategies also often have room to be more green. Consider filling your delivery trucks to maximum capacity, optimizing delivery routes, and rethinking pack- aging so that more product can fit in each truck. COMMUNICATION AND PITFALLS Since not all customers will pay a premium for a green product, you need to ensure that what you are offering also has all the features of your competitors' products. Green alone will not sell! By making your product green while still satisfying other consumer needs, you may save money that can be passed along to customers. If you can give cus- tomers environmental and economic benefits, you definitely have a business case. Communicating your green performance to your customers can take many forms, from product labels to traditional marketing. The California Rice Commission's web site at www.calrice.org is a great example of effectively communicat- ing environmental values. Remember to keep your sales force (and all your employees) aware and well-informed of your effort to make sure the right message is com- municated to consumers and the public at large. Be careful, though, not to communicate too early on, or to commit to targets you may not be able to reach. You should also evalu- ate your suppliers and your supply chain, since all constituents need to go green if it's going to be part of your marketing campaign. Going green may appear scary at first, but many ag companies are already setting an example and experiencing the positive results. By taking small steps, it's easy to estab- lish more environmentally sound practices. Plus, it doesn't have to come at the expense of profit. AM Maud Roucan-Kane (mroucan@ purdue.edu) and Amber Rankin (firstname.lastname@example.org) are research associates at Purdue University's Center for Food and Agricultural Business. September 2009 Agri Marketing 51 DON'T FEAR THE GREEN by Maud Roucan-Kane and Amber Rankin Sales and Marketing Insights from Purdue University SEMINARS Upcoming Agribusiness Strategic Agrimarketing October 12-16, 2009 ARA Management Academy February 2-4, 2009 ASTA Management Academy March 2-5, 2009 Learn more at www.agecon.purdue.edu/cab Center for Food and Agricultural Business
Best of CAMA 2009