Thursday, February 26, 2009

Great big green ideas in the building industry waning?

Construction industry stakeholders are increasingly recognizing green building capabilities as “good”—and being a necessary part of a firm’s best practices, ending the view of green building as a niche sector, according to FMI’s 2008 U.S. Construction Overview

According to the Overview, green nonresidential construction put in place was $13.4 billion in 2006, and by 2008 $21.2 billion of all new nonresidential construction will employ the use of green building principles. The growth in green construction has created a shift in perception among owners and the architectural and engineering communities. Construction industry stakeholders have embraced the green movement and sustainable design for its energy savings, worker productivity increases and positive public perception, the report states.

In 2008, the three largest segments for nonresidential construction green building—office, education and health care—will account for more than 80 percent of total nonresidential green construction. Other segments such as lodging and commercial are also experiencing green construction growth, with a 20 percent gain expected from 2007 to 2008.

That article was from January of a search today on the tern "green construction industry" that was the most recent result. Most of the content was from 2007 or even 2006. Before the recession was in full swing. Before the housing market tanked.

So where are they now? Is construction still moving towards green? Or has green given way to the red ink that fills the account books of construction companies? And if the green has stopped flowing, will it pick up again as the economy recovers? Your thought?

Wednesday, February 18, 2009

Greener can be cheaper Part Four

Simplify, simplify, simplify....

Years ago, Henry David Thoreau said

Our life is frittered away by detail... Simplify, simplify, simplify! ... Simplicity of life and elevation of purpose.

That sage advice penned on the banks of Walden pond has never been more in need than today. In times of abundance, our lives -- and the products we use each day -- become more elaborate and more complicated. But abundance is not the watchword of the day, and people are looking at those complicated and expensive "toys" and asking why.

That represents a great opportunity for green manufacturers and marketers to offer a simpler -- and ultimately cheaper -- alternative. In this case, it's not about making the product cheaper than a less green version, but offering a product that takes the place of a more expensive and less green tool, service or item.

For example, the last few years have seen the ordinary clothes dryer morph into a gigantic $1,000 plus monster in a dozen decorator colors. Laundry areas formerly housed in closets or behind sliding doors in a kitchen no longer accommodate the huge dryers and their companion washers, so new houses need bedroom-sized laundry rooms. And these rooms need to be decorated, fitted with cabinetry and laundry folding tables and sorting bins, then heated and air conditioned. All to wash and dry dirty clothes.

So where is the green marketing opportunity here? In turning back to Thoreau's message...simplify. Marketing green means offering a cheaper, simpler alternative. Instead of a $1,000 dryer, how about well designed, attractive clotheslines and small energy efficient dryers, the kind that fits in a closet?

In this case, and so many more like it, the greener is cheaper model isn't about making a green clothes dryer that is cheaper than other same-sized clothes's about offering a viable, simple alternative to the king-sized dryer.

Greener can be so much cheaper, especially when it's simpler.

With dryers. it's a clothesline. With things like business products, it's not finding a way to make something like a laminated minimum wage poster greener, it's about going back to just paper because really most printed posters and notices don't need to last that long.

Think about the expensive, complicated items in the marketplace. Now envision a less complicated, less expensive way to accomplish the same goal. Many of them may have come from an earlier, more cost conscious time. There is your cheaper, greener marketing opportunity.

Friday, February 13, 2009

Greener can be cheaper part three

Targeting needs, not marketing illusions

One of the great failings of the green movement in this country has been the failure to start the process by looking at where demand already exists but is not met, instead of trying to force a "green" version of products that may not have a significant market.

Creating and marketing a product not in demand results in:

Higher costs. The item needs to be advertised, promoted and otherwise pushed as "green." The potential buyer needs to be sold on your product, rather than happy to find what they already wanted.

More waste.
High prices and low demand means more product will end in clearance racks, on discounter shelves and ultimately in the trash.

A bad reputation. The more green products are viewed as indulgent and overpriced, the more people will turn away from the green movement. That's bad for legitimate green manufacturers and providers, and ultimately, bad for the planet.

The lesson for would-be green businesses?

Make sure there is a demand
Check out the competition to verify that the demand is not being met
Find lower cost green raw materials or elements
Skip the gimmicks
Market your products at a price point that will encourage demand to remain high

Tuesday, February 10, 2009

Part two of greener can be cheaper

Co-op for raw materials

One of the biggest justifications for the higher cost of green products is the higher cost of organic or otherwise green materials.

One of the reasons for this discrepancy between the costs of standard and green materials is something called "economies of scale," a term that basically means that the more you use or make or grow or create, the cheaper it is per element.

The green world is no exception. But manufacturers seem to be forgetting this. Or ignoring it. Or perhaps just acting as though it doesn't apply to their product.

And that can be deadly to green businesses at all levels. Here's an example:

When a company decides to manufacture notebooks with recycled paper, they need to order the paper. Most green products have a limited run (more about why in a second.) So the company orders X reams of recycled paper, makes the notebooks. A price is set, based upon the materials and the perceived value of a green product at wholesale.

A wholesaler or a retail store gets the notebooks, and marks them up again to cover both the cost and the value-added of a green product.

They may also add in a factor to cover the cost of expected unsold product because of the higher sales price of green items. After all, they cost a lot more so people buy a lot less. That was the assumption from the start, when the run size was determined and the prices were set at each stage.

The problem is, that assumption is killing green products and green businesses!!

Let's start over.

The company who wants to make green notebooks finds other companies who are making green paper products. Together, these companies order a significantly larger amount of recycled paper. The paper manufacturer gives them a better price because it's such a large order(economies of scale).

The materials costs are now lower, so the price can be set lower. If the order for paper was large enough, it might be the same as or even lower than standard runs.

Now the notebooks go to the wholesaler or retailer. And because of the perceived value to customers and the lower wholesale price, they order many more. They may get an even better price. The cost to them is the same as a standard notebook, or at least close. Again, economies of scale.

A mark-up to cover anticipated unsold items isn't needed, because these notebooks cost the same as standard ones AND they have the appeal of being green. Easier to promote!

So now the price that the consumer sees is about the same as the regular notebook AND they have a good feeling, too. More notebooks sell, more are ordered and the cycle is in place.

Unless someone gets greedy and forgets that short-term gains equal long term losses, the notebooks sell, the costs remain low and the earth benefits. And we benefit.

For less.

Monday, February 9, 2009

Part one of greener can be cheaper

Step 1: Forget about the gimmicks.

A single baby blanket hand-tied with am organic hemp string before being adorned with a hand-lettered recycled paper diecut tag proclaiming its incredible greenness is cute...until you see the price. Is this product designed to improve sustainability for the average consumer or to allow the well-heeled shopper to congratulate themselves as they load this one perfect blanket into their SUV and head home to the 6000 square foot home for three people?

If the goal is to REALLY reduce waste and pollution and environmental abuse, a package of ordinary-looking baby blankets with an ordinary printed tag will reach far more people. Of course, the blankets can be green, whether that means organic or made without toxic dyes. And the labels and bags can be recycled materials. But because there is no need to shout, more people would buy them.

More demand would reduce the unit cost, as unit costs for manufacturing are higher for smaller runs. So even more people could buy green...probably many of them without even looking for green. And THAT is when green is real and not about show.

Friday, February 6, 2009

Making greener cheaper

Greener can and should be cheaper.

My previous posts on green marketing and overpriced goods lead to a lot of comments via e-mail. Some agreed, and gave examples of truly green marketing in Europe where the absence of overtly green images doesn't change the fact that the products ARE green. Another had attended a green trade show here in the US and complained about the explosion of green ink, and the even more disturbing fact that many of the items advertising green loving were not in fact green products at all!

Others complained bitterly, saying that of course green has to cost more -- a lot more -- because the raw materials and processes are so much more costly. Is that true? It may be in the short term, but that is largely because of the high retail prices, rather than an excuse for them. More about that later.

I want to explore ways in which green items can...and should be cheaper. And why manufacturers and suppliers using the green image as a gimmick are over-inflating the prices,using guilt or fear instead of value as a marketing message.

The next few posts will focus on the real costs of green production, building and sales. I would hope you would join in by commenting on the blog or by submitting guest articles. I want to hear from you. I want to open the floor to the why's and how's of green life and business. Will you join us?

Monday, February 2, 2009

Department of Homeland Security Green Disaster

In a ruling about a month ago, the Department of Homeland Security (DHS) announced that the I-9 Forms used to verify and document employee eligibility to work would be changing. Some of the acceptable documents had changed. The form content was rearranged. And because every employer in this country is required to use one of these forms for every single employee they hire, that meant that every existing Form I-9 and every existing set of instructions for the I-9 form would have to be thrown away and replaced with new forms and new sets of instructions.

There was a very short time between the final release of the new form and the requirement to use a new form, and no option to ease into the new forms. So lots and lots and lots of paper was thrown away. A small portion was probably recycled. And new forms were designed and printed. And new books and instruction sheets and templates and FAQ's were printed in anticipation of a February 2nd deadline.

And then, yesterday, February 1st, less than 24 hours before the deadline, the DHS reversed itself, saying that the new forms would not be acceptable, the new requirements would not be in effect, and that employers must continue to use the old forms and old instructions at least until April 3rd of this year.

The same forms that people just threw away. Replaced. That companies like G.Neil and HRdirect and ComplyRight just reprinted in the new and now potentially useless format!

So what we have is a green disaster on two fronts:

First is the green environmental disaster. Millions of sheets of paper have been disposed of and will now have to be printed. Millions more have been printed and now may never be used. And potentially millions more will have to printed again when the DHS makes up its collective mind in April. And besides all the paper, we have all the ink (potentially toxic) and the eletricity that was used to do the printing and the gas that was used to drive the disposal and the delivery trucks!

And we have a green money disaster. Companies, already struggling financially, had to dispose of unused forms and other paperwork surrounding this form, and buy for print new forms and new paperwork. And that costs money they can ill afford. Now they are being told that they must again replace the I-9 form, but this time with the one they had before. And will possibly need to buy all new stuff AGAIN in April! Just what businesses on the edge of bankruptcy need -- more expenses with zero return.