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:
Scott Cooney, Principal of GreenBusinessOwner.com and author of Build a Green Small Business: Profitable Ways to Become an Ecopreneur (McGraw-Hill, November 2008), is also a serial ecopreneur who has started and grown several green businesses and consulted several other green startups. He co-founded the ReDirect Guide, a green business directory, in Salt Lake City, UT. He greened his home in Salt Lake City, including xeriscaping, an organic orchard, extra natural fiber insulation, a 1.8kW solar PV array, on-demand hot water, energy star appliances, and natural paints. He is a vegetarian, an avid cyclist, ultimate frisbee player, and surfer, and currently lives in the sunny Mission district of San Francisco. Scott is working on his second book, a look at microeconomics in the green sector. In June 2010, Scott launched GreenBusinessOwner.com, a sustainability consulting firm dedicated to providing solutions to common business problems by leveraging the power of the triple bottom line. Focused exclusively on small business, GBO's mission is to facilitate the creation and success of small, green businesses.