The Market for Sustainable Business is Bigger Than You May Think

Several recent studies show between 40-50 million Americans - about 25% of the adult population - are beginning to make value-based choices in more and more product categories. When price and quality are comparable, socially responsible businesses have the advantage.

Social Trends
Many leading polls, including a comprehensive study by the Harwood Group, show that the majority of Americans across all walks of life, name problems such as greed and selfishness (90%), the deteriorating environment (86%), increasing stress on families (83%) and communities, and the gap between 'haves' and 'have-nots' (72%) as major obstacles endangering America's future.

In a fascinating study, The Integral Culture, the author, Paul Ray, discusses three competing worldviews in America today. What Ray calls the Traditionalist worldview dominated the early days of the U.S. Faith-based, it includes many people who identify themselves as part of the religious right. It is declining rapidly and currently includes about 56 million people, about 29% of the adult population. Traditionalists propose to solve problems by returning to what worked earlier in this century.

The Modernist worldview is what most people would call the mainstream. It includes about 88 million Americans, about 47% of the adult population. This paradigm emerged with the industrial revolution and became dominant early in this century. It is now leveling off. Modernists believe progress and the 'good life' are defined by increasing material wealth. Problems can be fixed by adjusting the present system. Almost all contemporary political, business, media and religious leaders share this view.

A new worldview, the Cultural Creatives, began to emerge and grow rapidly in the 1970s. "These are the ones who are coming up with most new ideas in American culture, operating on the leading edge of change." A defining characteristic of this group is its toleration for ambiguity - an ability to look beyond either/or choices and embrace a larger whole. It integrates the best of the of Traditional and Modern views and goes beyond them.

About 44 million Americans, or 24% of the adult population, believe society faces significant problems and needs to reinvent its culture, institutions and practices to solve them. They seek to integrate their values into their everyday lives and are ready to take action on a wide range of social, environmental and spiritual concerns. Core values are ecological sustainability, civil rights, self-actualization and spirituality, and social conscience and optimism.

Interestingly, most Cultural Creatives think they represent a tiny, minority worldview - maybe as small as themselves and their close friends. This happens for two reasons. First, because it is an emerging paradigm and people come to it from many paths (environment, social justice, health & healing, etc.), it is still very fragmented. People within it don't share a common language or recognize people who arrive from different paths as allies.

Second, one of the jobs of the dominant paradigm is to marginalize new ideas. Feedback from the Modernist mainstream is that Cultural Creative thinking is a small, fringe view. Cultural Creatives don't see themselves reflected in the media or institutions, so it is easy to believe there aren't many like them. This causes many to lie low, expressing their values in their homes but not at work or other aspects of public life. It may be causing many socially responsible businesses to see and act as if their market is much smaller than it really is.

Market Trends: Cultural Creatives as Customers
Sustainable businesspersons will recognize the profile of the Cultural Creative as their customers. They are about twice as likely to be women, their median age is 42, and although they come from all walks of life, they are more likely to be well-educated in the upper middle class.

Cultural creatives scan the horizon for information, delve into their interests, and integrate what they learn into the big picture. They take action on their values and, especially in their homes, are making value-based purchasing decisions. Key products they seek are natural food, natural body care products, eco-travel, wellness health care, education and workshops, arts and culture, and values-based investments.

Cultural Creatives Characteristics


Whole Foods is an example of a company that understands and reaches the Cultural Creative. Compare a Whole Foods store to a mainstream grocery such as Safeway, and you'll get a visceral sense of the difference between the Cultural Creative and Modernist paradigms in the business world.

Business Opportunities
Other recent market studies corroborate this trend. Kaagen Research Associates identified 50 million Americans as "socially responsible" in their purchasing and investing activities. The Hartman Group segmented natural food shoppers into: "True Naturals", "New Green Mainstream" of at least 45 million Americans, "Young Recyclers" and "Affluent Healers."



Natural Food Purchaser Categories

True Naturals: 7% population. The core, loyal natural food shoppers. Committed to environmentally sound products as part of their lifestyles; knowledgeable about the issues; self-sufficient and secure.

New Green Mainstream: 23% population. High concern for the environment but inconsistently express concern in their purchasing decisions.

Young Recyclers: 10% population. Concerned about environmental issues, but concern doesn't always bring action.

Affluent Healers: 12% population. Environmentally concerned but less than other segments. Care more about nutrition, health and exercise.



Sales of organic food are growing at 20-25% per year, while the conventional food industry grows at 3-5%. The social investing market has more than doubled in two years, now representing over $1.2 trillion and 59% of Americans would like to change their investments to support environmental concerns.

Cautions & Caveats
As many of you know, to reach this market a values-based approach is necessary but not sufficient. Businesses must satisfy core purchase criteria of quality, price, convenience. Most studies show the environmental characteristics of a product are most important for only about 7-10% of the market - the "True Greens". While it is this core group that is pioneering a new culture, a much larger group is sympathetic with and responding to these values. Many sustainable businesses limit their market to True Greens, when there is a much larger receptive group out there - the emerging mainstream of the Cultural Creatives.

Further, businesses must understand which social or environmental message works with its product. The Hartman Group found that for many, but not all, food products, pesticide-free was the most important environmental message. Others like chemical-free or organic were less effective. Since the Cultural Creatives is a fragmented market, careful research is required to reach it successfully.

Harvey Hartman said it well: "The 'green' consumer is now mainstream. There is significant market potential for earth-sustainable products. It is not merely a market niche. It is a market that is here to stay and is still untapped."

Excerpted From Coop America's Connections

The Hartman Group, The Hartman Report, Food & the Environment: A Consumer's Perspective, Phase I. , Bellevue, Washington, 1996.

The Harwood Group, Yearning For Balance - Views of Americans on Consumption, Materialism and the Environment, for the Merck Family Fund, 1995.

Paul Ray, The Integral Culture Survey: A Study of the Emergence of Transformational Values in America, report to the Institute of Noetic Sciences and Fetzer Institute, 1996.