It’s official: 2009 is the beginning of a new era. Barack Obama is president, Detroit’s Big Three are on the verge of becoming the Little Two (and A Half?), and Seventh Generation – a brand synonymous with sustainable values – is doing business with Walmart. It’s no full-scale partnership – Seventh Generation products will be sold in just four pilot Walmart stores, under Walmart’s “Marketside” brand, as an experiment. But this relationship is meaningful and significant, to retailers and producers of both mainstream and green products.
First of all, it’s important to point out that Seventh Generation has a lot of questions and reservations about this partnership – Jeffrey Hollender, their CIP (“Chief Inspired Protagonist”), brings these up immediately on his official company blog. For instance: Walmart’s long history with poor workforce policies, and their general symbolism as American capitalism gone bad, are particularly relevant to Seventh Generation’s mission. One imagines that this relationship has a few heads shaking at Walmart too, as Seventh Generation’s image may seem (on the surface, at least) to be inconsistent with the identity of Walmart’s customer base.
But in this situation, both corporations were able to see beyond surface incompatibilities to identify a crucial strategic match. With a little digging, it’s easy to see why. Walmart has identified that further business growth – and long term business value – are impossible without a more sustainable world to do business in. Unless the world gets more sustainable fast, Walmart’s leadership expects environmental and social injustices to have increasingly hard impacts on their bottom line. Walmart is one of the few companies who are big enough to feel directly the macro effects of unsustainable practices, and they’ve wisely realized that bringing sustainable brands to the fore is one way to improve their business prospects in the future.
Surprisingly, the situation for Seventh Generation is similar. Although selling through Walmart may seem antithetical to their image, transitioning from a niche to mainstream product is very much in line with their core values. Seventh Generation’s name derives from Iroquois law, which dictates that present-day decisions should be informed by their impact on future generations. If Seventh Generation wants to make a real impact down the line, they must transition from the fringe to the mainstream. While Walmart may be an imperfect partner, they clearly are a non-negotiable hurdle to becoming a dominant industry player, not an also-ran.
So what’s the takeaway? There are a few. First, when companies think big about long-term growth and strategy, they may find themselves in partnerships with other players that they never expected. So don’t be surprised if taking a closer look at your strategic position means making some new friends. Second, existing market players are going to need to rethink their image and identity in light of a new emphasis on sustainable business. They will need to reach across the aisle, to market players that they thought of as enemies just a few years ago. This means that outsiders like Seventh Generation will need to soften their anti-establishment tune to avoid marginalization, and insiders like Walmart will have to learn to embrace those that seemed ahead of the mainstream so recently.
What other former enemies do you think should be working together? Which ones already are? Sound off in the comments!