Earlier this month, SC Johnson announced its acquisition of Ecover and Method, two brands that proved sustainable cleaning products could be hip, competitively-priced and effective. The news was generally greeted with a yawn if not overlooked, though that certainly was no fault of Wisconsin-based SJ Johnson. Geopolitics and a barrage of headlines have sucked all of the oxygen out of the newswires in recent weeks.
Nevertheless, the cleaning products and consumer packaged goods (CPG) sectors have been in the midst of a longstanding trend, as summed up by SC Johnson’s CEO, Fisk Johnson.
“Method and Ecover have a strong tradition of innovation and delivering on consumers’ needs. They are a great complement to SC Johnson’s trusted lineup of iconic brands,” said Johnson in a public statement.
In other words, consumers are increasingly concerned about the sustainability of their products and the conduct of the companies from which they buy their favorite brands.
The outcome is a huge challenge for some of the world’s largest CPG companies, who find themselves boxed by changing consumer preferences. Younger consumers want more products with a conscience; other customers, however, are loyal to their favorite brands and would rather not see them change. That tension is in part what drove Unilever to acquire Seventh Generation last year, and the Anglo-Dutch conglomerate was briefly rumored to be in talks to by The Honest Company.
As a result, some analysts said Procter & Gamble was under pressure to complete a similar deal. To date, such an acquisition has not yet occurred; P&G has instead decided to follow a strategy of making “eco-friendly” versions of iconic brands such as Tide Detergent. Meanwhile the company has endured several years of sluggish sales; many of the company’s observers are not thrilled with P&G’s long term prospects. The problem P&G faces is that if given the choice between a conventional and “eco” product, brand loyalists will stick to what they know. Millennials and more “conscious consumers,” meanwhile, will gravitate towards the brightly-colored spray bottles of Method instead of the dowdy alternatives the likes of P&G, Clorox and Unilever have long pitched.
One argument in support of a conventional company buying a smaller “sustainable” firm is the synergy that can result. As profiled on the Guardian in 2013, despite fears that Burt’s Bees was “selling out” to Clorox, that was far from the truth. Century-old Clorox became more of a sustainable and lean operation due in part to what it learned from Burt’s Bees; the latter in turn could score pointers from Clorox’s managerial expertise and the company’s distribution channels.
Of course, Oakland-based Clorox had a corporate culture that was open to change. Could the same be said for SC Johnson? The company used to be quite active on the social media front, at one time being a leading voice for corporate sustainability. But that chatter has largely quieted down in the past few years. SC Johnson has certainly tried, from its point of view – for example, the company tinkered with pushing its concentrates to reduce waste (and sent the author a supply to test out), but that push has largely fallen by the wayside.
Could Method’s founders, Adam Lowry and Eric Ryan, offer SC Johnson the jolt of “innovation” for which the company inferred it was looking? And will the “family of companies” that comprises SC Johnson be receptive to the “weird” culture Lowry and Ryan instilled at Method’s headquarters? If the two cultures can mesh, SC Johnson has a huge opportunity to win new customers over, and not just those buying ylang ylang-scented shower spray.
Image credit: Method