Now, you knew it would happen. When a company with sustainable products and vision—from its inception—decides to sell to Wal-Mart, there’s bound to be a lot of discussion and controversy in the blogosphere.
That’s why Seventh Generation’s recent announcement that the company will start doing business with Wal-Mart raised eyebrows, questions and plenty of comment, pro and con.
From the company’s own press release: “Seventh Generation, the nation’s leading brand of non-toxic and environmentally friendly household products, is embarking on a mission with Wal-Mart (NYSE: WMT) to help make sustainable living more accessible to consumers nationwide, including availability at more than 1,500 Wal-Mart stores and on Walmart.com.”
At first blush, this may not seem like a match made in heaven. No doubt hard-core environmentalists and proud tree-huggers everywhere will eschew this new relationship. But should they? Wal-Mart has made a huge, unwavering commitment to becoming a more sustainable retail operation over the past five years. And it has been accomplishing some milestones.
So is there anything wrong with Seventh Generation doing business with the largest retailer in the world? Obviously, it’s a big deal to get distribution into 1,500 retail stores for a small company like Seventh Generation. But a company like this isn’t interested in only top-line sales.
Here’s a huge opportunity to educate the public at large. Here’s a chance to convert more households into purchasing and using environmentally friendly laundry, dishwashing and cleaning products, disinfectants, paper goods, baby care and feminine care products. This is all about getting closer to fulfilling the company’s chief goal: “Protecting Planet Home.”
So why wouldn’t they sell to Wal-Mart? As president Jeffrey Hollender noted on his Seventh Generation Protagonist blog: “Certainly any retreat (by Wal-Mart) on social or environmental progress would trigger some rethinking. Our positions on responsibility, accountability, and transparency aren’t subject to change, and we expect our partners to keep working toward these goals.
Question: What do you see as the pros and cons of this new partnership?
I’d love to hear from you.
Tags: Marketing
It’s an inevitable move in the progression of the “green movement” from the progressives into the mainstream. The largest ‘green products’ company starts selling to the most powerful retailer in the country. It’s all very predictable. I’m sure there will be compromises somewhere on Seventh Generation’s part – not that I blame them. Working with a huge retailer like Walmart – principles and business don’t always match, and Seventh Generation will have to make compromises on one or both in the long-term. Lucky for consumers, there are plenty of smaller companies making these types of products – many of them better than Seventh Generations (for the environment, and as products themselves – see Biokleen and Meyer’s). You just won’t find them at your local super-size me factorymart.
Hi Ted,
I wonder how Seventh Generation is going to price their products. If they decrease the price to the Wal-mart standard then they decrease the value their previous customers had of the product. If they maintain their prices then I wonder if Wal-mart consumers would be willing to pay that much? How eco-conscious is the Wal-mart consumer anyway?
Possible pros
Larger distribution channel
Increased sales
Possible cons
Diluted brand
Potential alienation from their most loyal customers
Hi Phillip,
Sharp, perceptive comments on your part. Thanks for weighing in. You’re quite right. When a brand as green as Seventh Generation ventures into a retail deal with behemoths like Wal-Mart, it could be rather dicey. I will point out that Wal-Mart has increasingly pushed for more sustainability over the past few years, though. Still, as you stated, Seventh Generation’s most loyal customers may find the partnership with Wal-Mart distasteful. As for pricing, Wal-Mart’s huge purchasing power and state of the art distribution will likely enable them to price the products for less than the average retailer. But if that happens, it’s likely going to come down to a few pennies worth of difference. Remember: these are cleaners, detergents, paper goods. We’ll have to wait and see. This is going to be interesting, isn’t it?
Hi Ted. Hi Phillip.
I think Phillip touched on an important question: “How eco-conscious is the Wal-mart consumer anyway?” I’m going to hazard a guess that the answer is “Not so very much.”
Wal-Mart has always positioned itself as low price price/few frills retailer – although they have made strides to improve the look & feel of their retail spaces in the last few years. I think that their main customer base is more concerned with getting quantity of product for their money then they are getting sustainable products. When you’re doing your best to stretch your budget as far as it can without it breaking, I doubt that paying a more premium price for sustainable goods is a viable option.
That being said I am very interested to see what the pricing structure will look like. It could be that in this new era of frugal being cool, being able to say “I buy my Seventh Generation products at Wal-Mart” could become a bit of pride for the frugal. Sort of an “I’m can save the planet while saving money” anthem.
You’re right Ted; this is going to get interesting.
Question: What do you see as the pros and cons of this new partnership?
I am a loyal Seventh Generation customer.
Before responding tot this post, I grabbed a container of Seventh Generation Natural Glass & Surface Cleaner. It says on the back, “Made in USA.” Wall Mart is known as a company that sources a LOT of its products from China and elsewhere and very little from the U.S. I would start shopping at Wall Mart if they committed to carrying more products manufactured in the U.S.
I don’t expect all products I buy to be made in the USA but I don’t like it when a store carries very little that is manufactured here.
Hi Kate,
You brought up Phillip’s point and it’s a good one. I’m not so sure the average Wal-Mart shoppers have sustainability uppermost on their minds. However, Wal-Mart itself has done some good things. The company’s Packaging Scorecard, for example, has pushed manufacturers to cut down on extraneous packaging in the past few years. The company has recycled much more and optimized its distribution of products from warehouses to stores, cutting down on truckloads and fossil fuels substantially. It is their commitment to try to change the way they do business. That’s important. Now the company apparently feels it wants to start positioning more sustainable products in their mix. By virtue of their tremendous size and reach, more consumers will be using these products, as a result. That’s not such a bad thing. Will every customer shopping at Wal-Mart be tempted to try sustainable products? Of course not. But many will be exposed to them–likely for the first time. And out of that number, surely a percentage will give them a try. There is a growing concern among consumers about the environment, so here’s hoping. . .And yes, Kate, frugality is now a chic attribute; one that consumers hold out proudly. We’re all shopping smarter than ever before. Thanks for weighing in here with your articulate thoughts. I appreciate it.
Hi Neil,
You’ve raised an interesting point. Most consumer products are manufactured in China, southeast Asia and elsewhere these days. It is nice to be able to support American manufacturing companies when they produce quality products. Wal-Mart used to stake a major claim on “Buying American”. Unfortunately, there are fewer and fewer companies offering goods made here. Manufacturing has been made too expensive here, due to high start-up costs, too many regulations, taxes and red tape. If consumers use their wallets to support more American-made products, maybe state governments will find ways to make it more attractive for companies to manufacture again. We could certainly use the jobs! Thanks for weighing in, Neil. I always enjoy your comments and insights.
Hi RC Lations,
You’re right: it seems inevitable that when green companies reach a certain size, they make the leap from limited, natural retailer distribution to the mass. Still, many have done so without giving up their principles. Take a look at the brands on the food size of the business: Kashi, Stonyfield Farm, Silk, Nasoya among them. These companies are found in supermarkets everywhere. Are all of the outlets they’re in now green? No. Are the companies still principled? Yes. The important part here, in my view, is that many supermarket chains are working toward adopting more sustainable practices, much as Wal-Mart is. Their widespread distribution also enables these brands to reach many more customers than they otherwise could. Is that such a bad thing? It seems to me that making steps, even baby ones, will eventually take us all to a better place. They key for companies like Seventh Generation is NOT to give up any of its core principles. And as you point out, RC, if consumers feel betrayed by SG products in Wal-Mart stores, there are other choices in the marketplace. That’s what makes open markets so terrific, right? Thanks very much for sharing your thoughts. You’ve expressed a very valid opinion; one shared by many, no doubt, RC.
I’m not concerned at all about pricing. What concerns me is Walmart’s history of dictating to manufacturers price and price point.
Ted, you mentioned that companies like Seventh Generation would never give up it’s core principles. However, at this point that’s quite debatable.
Walmart is also known for ignoring their legal obligations. It is such a behemoth with such an aggressive legal department, only a few attorney’s would be able to tangle with them. So if/when things go badly between Seventh Generation and Walmart, I doubt Seventh Generation would have the financial resources to correct the matter. Such a situation will leave Seventh Generation to find their own solutions internally – which may result in a few ingredient changes, processing shortcuts, measurement shorting, etc.
However, it was incumbent on Seventh Generation to investigate all possible contingencies before finalizing the agreement. With a modicum of research, Walmart’s history of ‘legally bullying’ it’s vendors and violating it’s own contracts can be documented.
Accordingly, we must conclude that Seventh Generation performed research diligently, is aware of Walmart’s previous and continual injuries (to humanity and the environment), and has decided to conduct business with them anyway. That is a violation of (my perception of) their values ie., how can you deal with the devil and not expect to be burned?
Hi Maurrean,
Thanks for sharing your views with us. Wal-Mart has a well-known reputation for strong-arming manufacturers to lower their prices. Many of them have had to make choices: give up more profits or cheapen the goods. What do you think many have opted to do, as a result? Now we have no way of knowing what kind of contract was drawn up between Seventh Generation and Wal-Mart, but I suspect the vendor stipulated what it could and would do, vs what it can’t and won’t do. Wal-Mart has been in the process of changing its M.O. over the past couple of years. Let’s hope so. Here’s the thing: how much can consumer products be cheapened? Lower prices seem desirable, but obviously lower quality standards hardly please us, do they? What kind of “value” is there in cheap, shoddy merchandise? And all of the “box store” retailers find themselves guilty of this. How low is too low?
Thanks, Maurrean: you brought up a very important part of this equation and I thank you.