Mission Driving Margin
Growing consumer awareness and demand are making socially responsible brand building a more viable business and marketing model.
Shoppers are expressing strong enthusiasm for brands with a conscience, with the increasingly influential Hispanic consumer segment identified as one of the most socially conscious and active population segments. The most significant shopper research finding is that, unlike consumers from past decades, these consumers are not only expressing their preferences for socially conscious brands, they also are backing up these beliefs with dollars. A 2013 Cone Communications Social Impact Study found that the number of shoppers who purchased a product associated with a cause over the last 12 months, increased 170% since 1993.
With brands such as Toms expanding offerings, the number of consumers who invest dollars with socially conscious brands by purchasing their goods can be expected to grow.
Toms Roasting Co. launched in 2014. With each purchase of TOMS Roasting Co. Coffee, the company provides one week of safe water (approximately 37 gallons) through the collaborative work with its giving partners. In 2015, the Toms Bag Collection launched in four countries with three giving partners. Purchases of Toms Bags help the company’s giving partners train birth attendants and distribute birth kits containing items that help a woman safely deliver her baby.
Widely reported to have sprouted from a side project that founder Blake Mycoskie worked on while taking a break from his high-demand full-time job, Toms is a household name today.
David Simnick, co-founder and CEO of Soapbox Soaps, appears to be facing a similar trajectory. Simnick in his presentation during the Package Design Corporate Social Responsibility webinar describes the founding of the personal care brand as a “side hustle.”
He recalls, “Soapbox starts in 2010 when I used to be a subcontractor for the United States Agency for International Development and I was thinking about how we could do aid differently.” Simnick specifically was thinking about sustainable business models that would support highly effective, smaller initiatives that gave access to soap for populations in need for their health and hygiene programs. “I called up my best friend and told him that we are going to start our [soap] company,” Simnick says. “He thought I was crazy so he hung up the phone! I had to call him back to convince him that, indeed, I was actually serious.”
What started as an “evenings-and-weekends projects” is now a one-for-one, socially conscious personal care brand with distribution at natural goods, club and discount department stores. The brand has been spotted on shelves at Target and Whole Foods Market and spotlighted at Costco and Sam’s Club warehouses.
Like Mycoskie, Simnick believes the simplicity of the one-for-one model packs marketing punch. “Another thing about cause being a part of your package design and branding strategy is that the cause needs to be simple,” he argues. “So leave the cents and percents out is what I usually like to say.
“Your cause marketing statement needs to immediately make sense,” Simnick adds. “People don’t understand what 5% of profits are. That could be a gigantic donation, but 5% sounds so small. It could be 25 cents of each and every one of these purchases. It could move your margin by 10, 15 or 20 points, and, yet, people still don’t resonate with that because they don’t understand what 5%, 10% or 25, 50 cents means. So you need to make it simple.”
But as Lewis Perkins, interim president of the Cradle to Cradle Products Innovation Institute, states in this month’s Debate & Discuss editorial, certification marks can help build consumer confidence in a cause.
And including logos from respected giving organizations can help socially conscious shoppers recognize products that align with their personal philosophies. In addition to the marketing potential of being able to include a giving organization’s logo on your packaging, brands can benefit from inclusion in the giving organization’s member directories.
Socially conscious shoppers can search One Percent for the Planet’s member directory for like-minded brands at http://onepercentfortheplanet.org/membersearches. (You can learn more about the One Percent for the Planet at the Package Design Matters Conference being held in southwestern coastal Florida in January, where One Percent for the Planet’s CEO Kate Williams will be moderating a panel discussion about corporate social responsibility on January 22 at 8:30 a.m. Visit www.packagedesignmatters.com to register for the conference and its co-located events.)
These seriously socially conscious shoppers often are better informed about giving organizations than the general public, although, again, the general public is showing increasing support of socially minded brands. These consumers often look up to these giving organizations and their members, giving a brand immediate rapport with the consumer.
Caleb Simpson, co-founder/owner of Bearded Brothers, was so impressed with One Percent for the Planet’s mission and its member companies that it inspired him to start his wholesome snack food company. “Before Bearded Brothers was even started, I was looking up to companies like Patagonia, whose founder started One Percent for the Planet,” says Simpson during Package Design’s Corporate Social Responsibility webinar. “Companies like Patagonia and even Clif Bar & Company. They are giving 1% of all their sales to organizations that promote environmental and sustainable causes. I really resonated with that, so I am more apt to support companies like them because they are using my money and their money for good. Their socially responsible business models made me want to start my own company, so I would give part of our earnings to organizations that promote things I’m passionate about, like sustainability and the environment.”
Simpson and Bearded Brothers’ co-founder Chris Herbert are also passionate about being fathers. “We chose to partner with Boneshaker because Chris and I are both parents of children,” Simpson remarks. “Boneshaker is a nonprofit here in Austin, Texas and their mission is to inspire kids to lead healthy and active lifestyles. They seek to combat childhood obesity by educating children about being active, healthy eating and about organic food. Many of these families are lower income families, and they are hearing the message about eating healthy, organic foods for the first time. By helping these kids, we are also reaching these kids’ parents.”
During the same webinar, Chris Kajander, CMO of Runa, described how a desire to help families in need launched the beverage company. Runa president Tyler Gage, an indigenous languages enthusiast, was living with the Kichwa people in the Ecuadorian Amazon. The Kichwa enchanted him with stories of their connection with nature, and their very personal connection with the forest.
So he was shocked to find that unsustainable activities such as logging were being used by the Kichwa to pay for education and medicine. But their argument was simple and strong, the Kichwa valued the ancestral connection to nature but when it came down to deciding between their children and the trees, the children won every time.
Gage looked to a sustainable forest product, versus logging, to create a product and a business that supports indigenous farmers and reforestation in the Amazon. Kajander is quick to note that Runa is not a nonprofit. Instead, it’s a social enterprise that delivers a win for families in need, a win for the planet and a win for the business, with profits.
These young companies are strong examples of success social enterprises, but they aren’t the sole purveyors of socially responsibly business models. For more than 175 years, doing the right thing has been at the core of Procter & Gamble’s purpose, values and principles. Today, Stephen Sikra, a materials science engineer, leads P&G’s global Material Science and Technology program for package material innovation in support of all P&G business units. Prior to his current role, Sikra served in a variety of management roles including those in process development and package development contributing to P&G’s fabric care, home care and beauty care business units.
During the webinar, Sikra explained that P&G’s commitment to social responsibility, specifically sustainability helps make P&G a stronger and a more competitive company by reducing costs and increasing values.
A sentiment echoed by Mitch Hedlund, executive director of Recycle Across America.org and a member of the Package Design editorial board. “Kiehl’s, to date, has donated actually over 275,000 standardized recycling labels to K-12 school throughout the U.S.,” she explains. “What this does for Kiehl’s as a CPG company is that it helped advance society’s ability to recycle right. As a result, Kiehl’s as a package good company will have more access to clean and competitively priced recycled commodities in the future. CPG companies and packaging designers have the most to win with recycling! It can give a packaged goods company more access to recycled materials at a time when companies are receiving tremendous amount of pressure to use sustainable packaging. Therefore, recycling and recycling right ensures that CPG companies and brand designers have the ability to incorporate recycled content into their packaging. “