Being green isn’t enough to succeed in the increasingly crowded market for eco-friendly products. Just ask Eric Ryan and Adam Lowry, who jumped on the green bandwagon early and found success by adding some pizzazz, along with a positive environmental pitch, to their innovative products.
Their venture was born back in 1999, when the San Francisco roommates and childhood friends were seeking a business opportunity that would combine Ryan’s marketing expertise with Lowry’s background as a climate scientist. They found one in the stodgy cleaning-products industry, which they believed was overdue for some real innovation.
“It was a sea of sameness,” says Ryan, 39, a former advertising account planner. Cleaning product aisles were filled with nearly identical white spray bottles containing ingredients that reeked of ammonia and bleach. Some eco-friendly cleaning brands had created a small niche with consumers concerned about both the environmental and their health. But those brands, primarily sold by specialty retailers, barely made a splash with total sales of less than $30 million at the time, Ryan says.
Ryan and Lowry’s concept: Produce surface cleaners and soaps made from nontoxic, mostly natural ingredients, like coconut oil and plants, and package them in sleek modern bottles that people would want to display in their kitchens and bathrooms.
They recognized that the big challenge would be appealing to mainstream consumers and not being typecast as just another eco-friendly brand. “Green products at the time took themselves so seriously” and catered to “wear-it-on-your-sleeve greenies,” Ryan says. “We wanted to turn that niche on its head and show that green products can be fun.”
So in 2000, Lowry and Ryan introduced eco-friendly Method, a line of colorful cleaning agents with fruity or flowery scents like “ginger yuzu,” and sold them in curvaceous, often clear bottles. Today, the San Francisco-based company employs about 90 people and generates revenue of more than $100 million a year.
The founders originally sold Method from their car trunks to grocery chains in California. After a few years, they had worked their way into 400 grocery stores and had amassed about $1 million in venture capital.
By then, Ryan and Lowry began seeing mushrooming demand among consumers for environmentally friendly products of all sorts. They knew it was time to move to the next level and contacted buyers at Target Corp. After a series of meetings, Target agreed to run a 90-store test of Method products in northern California and Chicago. Although Method didn’t meet Target’s sales expectations during the test, the retailer nevertheless agreed to start selling it nationwide in 2003.
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As sales took off and Method moved into more national chains like Lowe’s and Whole Foods, Ryan and Lowry rolled out more types of cleaning products, including hand soap and concentrated laundry detergent in their signature bottles.
While penetrating Target was a major breakthrough, Ryan and Lowry attribute their success more to their aesthetically pleasing package designs and fragrances and subtle green marketing. Rather than follow the example of competitors and tout Method’s eco-friendly qualities boldly on the labels, the founders only mention in small print on the bottles that the products are “naturally derived” and biodegradable.
“Method doesn’t really do green marketing,” Lowry says. “That means that it’s a much slower build over time, but it’s a much more authentic build.” The company tries to engender brand loyalty through its online efforts. It provides more detailed information about its sustainability initiatives on its website and hopes the message will spread through word- of-mouth promotion from its loyal customers. Method also has recruited an army of advocates online called “People Against Dirty,” who join campaigns the company starts such as its call for more transparent labeling of household cleaning products.
“A lot of people will come in for the design and the fragrance,” Ryan says, “but it’s the sustainability that will ultimately build the loyalty.”
A growing challenge for Method is the intensifying competition in the green cleaning product market. Major marketers, including Clorox, have introduced more environmentally friendly cleaners with bold green messages on the label. At the same time, other green brands like Seventh Generation and Mrs. Meyer’s Clean Day have become more formidable rivals.
Ryan and Lowry won’t say how much other brands have affected their sales. But Method has cut prices in recent years by 10 percent to 30 percent, Ryan says, because many consumers in today’s slow economy aren’t willing to pay much of a premium for green products.
He and Lowry say they have tried to avoid focusing too much on the competition, which they believe can stifle innovation. Method has continued to develop new products and reformulate old ones, using new methods of green chemistry to create more eco-friendly cleaning solutions. In 2010, it launched an eight-times concentrated laundry detergent in a pump bottle, and this year, it introduced a daily wood cleaner and revamped its core cleaning product line with new bottles and a new green formula.
“We’re creating whole new molecules that replace nasty chemistries that have been used for years,” Lowry says.
Lowry and Ryan’s Advice for Other Eco-Entrepreneurs:
1. Make your product enticing. Focus on creating products that offer consumer benefits like stylish design and pleasant scents. Let the environmental sustainability message come through clearly, but subtly.
2. Recruit loyal advocates. Word-of-mouth marketing is highly effective. Try to attract a corps of customers who will talk up your products and your environmental message.
3. Be fully committed to sustainable practices. If you go green only for profitability, customers are likely to see through you. Show them through your actions and words that you are committed to sustainability in all aspects of the business.
4. Keep innovating. The bar keeps getting higher on sustainable products and packaging, as more companies make environmental pitches. To be a green leader, you need to continually seek new ways to reduce your environmental footprint.