Seventh Generation is an eco-conscious household products company. They make green cleansers and laundry detergent, recycled toilet tissue and paper towels, even disposable diapers. In North America, they simply dominate the niche market for natural home products.
And now, they're going big time, beginning to compete for shelf space in the major supermarket chains. In this interview CEO Jeffrey Hollender (author of What Matters Most) talks about doing business with Walmart, building an online database of corporate accountability ratings and internalizing the true costs of your products:
Q: In comparing costs between more sustainable products and conventional products, I've heard you say, "Fair trade and organics should actually cost less than conventional products." Can you explain why?
A: Well, the reason conventional products cost less is because they are able to externalize so much of the costs. So if you were going to grow conventional coffee with pesticides, for example, and you had to pay to clean up the soil and the soil erosion, and all of the other environmental impacts that using those pesticides created -- what if that had to be rolled into the price of the coffee? And why shouldn't it be? I mean, who is going to clean up the mess? If that was rolled into the price of the coffee, organic would be dramatically cheaper. When paying workers salaries they can't live on, they have to rely on government subsidies. They have to keep their kids out of school so they can work on the farm. All of those things have costs to the society that you are not paying for when you pay for coffee that is that cheap. So in a sense, it's an artificially lower price. Now today, unfortunately, we are in this perverse world where it costs more to be organic, it costs more to be fair trade, and you have to convince consumers to pay extra money for something that really should be cheaper.
Now, Seventh Generation is essentially a marketing firm -- they don't actually design or make any of their own products -- and not a particularly "bright" green one at that. But it seems to me that they're also on the sharp edge of a big change, a change involving the mainstreaming of high expectations on corporate behavior. Today diapers and hybrids, tomorrow the world.