Don Knauss, CEO of Clorox, sat down in conversation at the State of Green Business Forum to discuss the transition Clorox has taken from a chemical intensive consumer product company to one that now has sustainability as a core focus of its company. The company saw four main trends that pointed them toward their current drive that has included the company’s acquisition Burt’s Bees, Brita and GreenWorks. These four trends were the ever-increasing attention to health and wellness, consumer desire for sustainability, an increasing focus (likely fueled by Wal-Mart) on affordable convenience, and a fast-growing demographic of the Latino community.
Knauss gave some insights into the development of GreenWorks. Many people, Knauss said, think that consumers asked Clorox to produce a greener cleaner. Instead, he said the consumer is not great at telling you what they want. However, they are good at telling you what problems they have. And in the case of green cleaning products, he said that people in their market research complained that green cleaners at the time either “Don’t work well, cost too much, or I can’t find them.”
Clorox’s distribution, reach, marketing budget, and $100 M brand created in one year–”for those who are not too familiar with the consumer products arena, there are not a lot of new brands that achieve that level.” But within a year, the recession hit, and the product line’s sales dropped in half. The company addressed the price gap as a result and got GreenWorks to within a 5-7% price premium and is now seeing good growth again.
But while GreenWorks is often heralded as the turning point for Clorox, Knauss said it was the acquisition of Burt’s Bees that really changed the DNA of the company. It influenced not just the sales strategy of the company, but its operations and cored direction as well. They decided to get more explicit in setting 5 year goals for reducing solid waste (20%), GHG emissions, water usage and energy usage (10% each). The sales manager asked the leadership to replace all their cars with hybrids, so they did that. Their corporate building in Oakland is now LEED certified.
For other managers looking to follow Clorox’s lead and get sustainability to be a key component of their own companies, Knauss recommended that three things:
- sustainability be not just a driver for saving money, but also for achieving growth
- get out of your comfort zone (Knauss cited their early conversations with the Sierra Club)
- align your incentive program so that your team are aligned and focused on sustainability
Stay tuned for more news from the State of Green Business Forum. As always, you can follow TriplePundit on twitter for live feeds from the event.
Scott Cooney is the author of Build a Green Small Business (McGraw-Hill) and Principal of GreenBusinessOwner.com