A new level of consciousness

From NZ Business Magazine, March 8 2008

A new breed of smart, informed and globally aware consumers is judging your business, its products and its values. Kimberley Paterson explains the LOHAS phenomenon

A tsunami of change is currently hitting the shores of New Zealand business – yet its genesis lies in earth tremors that began at least 20 years ago.

2007 proved to be the watershed year when environmentalism and all things ‘eco’ and ‘green’ moved from peripheral thought to become lodged deep in the heart of this nation’s consciousness – and indeed around the globe.

Perhaps it was Al Gore’s documentary An Inconvenient Truth; maybe it was the flood of scientific papers on global warming, looming water shortages and peak oil that finally cut through consumer consciousness; or maybe that wave that had been gathering momentum for at lest two decades finally peaked.

Whatever the cause, the future for business has changed and those businesses which don’t evolve with the times risk dying off much like the dinosaur.

Yet there is an even bigger wave still coming behind the ‘green’ one and it promises to further shape and shake the foundations of how business gets done.

The New York Times has confidently called it “the biggest market you’ve never heard of” and it goes by a variety of other titles, with Lifestyle of Health & Sustainability (LOHAS), Solution Seekers, Conscious Consumers, Cultural Creatives being some of the more popular.

In essence what it’s all about is the rapidly emerging awareness that up to 25% of the population of many countries (it’s been estimated at being up to 33% in New Zealand) are consumers making buying decisions on ethical and environmental concerns.

While the group has largely gone unrecognised by mainstream media, these ethical spenders can be found across every age group, cultural background and location. What defines them is their interest in natural health, natural products and lifestyles along with alternative energy, green building, eco tourism and ethical investing.

They care about the quality of their life, and life on the planet, and are very aware of the connection between how they spend their dollars and how things happen in the big picture. Chances are they are taking a long, hard look at the business philosophy and ethics behind the company they buy from.

This market is now estimated to be worth $US209 billion annually in the US and represents around 32% of the population. In Australia the LOHAS market involves four million people spending $A12 billion a year and is expected to be worth $A21 billion within the next three years. One Australian survey last year indentified one in every four people as LOHAS-aligned.

`Consumers Who Care’ is the name coined by Neilson Media Research & Nick Jones & Associates who identified nearly 300,000 Kiwis making a weekly decision to buy based on what a company stands for.

Meanwhile Wellington company Moxie Design strategy coined the term ‘Solution Seekers’- an estimated 30% of New Zealanders who are ‘smart, informed and globally aware’ and willing to pay substantially more for sustainable products, as well as looking for authenticity and innovation in the products they buy.

Globally the LOHAS market has been estimated at $500 billion and studies on the phenomenon consistently find consumers are willing to pay more for ethically and environmentally friendly products.

British corporate responsibility consultancy Good Business conducted a survey last year which found 48% of UK shoppers now factor in ethical issues when buying products – which aligned with a 46% increase in spending on fair trade goods.

Towards a better world

The group was first formally identified by American sociologist Paul Ray who called them ‘Cultural Creatives’. These are people who want to live with more simplicity and balance, more authenticity and quality in their lives and are actively looking for the products, businesses and services to help them achieve that.

LOHAS buyers want a better world for themselves and their children. They are savvy, sophisticated, ecologically and spiritually aware consumers who believe we are at a watershed time in history. The current growth in social conscience/ethical/green businesses reflects the increasing impact LOHAS shoppers are having.

Canadian research company Globescan has found a hardening of green beliefs in US and UK consumers: 70% of UK consumers thought everyone needed to do more about climate change; 70% believe businesses needed to do more; 57% believe government should force businesses to change.

Many believe that ultimately adoption of these LOHAS values will determine whether a company is successful or not long term. Consumers are adopting these values in a hurry and are keen to have the impact of how they spend their dollars felt.

Already the indicators of the force of their combined consumer shopping are everywhere. The British organic food market is growing an average 25% annually and is now worth £2 billion a year, despite the fact that organic food is generally around 30% more expensive than conventionally grown food.

America is seeing a growth in environmentally friendly firms offering green mortgages, car loans and home equity loans. The oldest eco-bank is 10 year old Shorebank Pacific which has seen assets growth 30-fold since 1997. Half the growth has come in the past four years.

Natural and organic cosmetics are seeing double digit growth in Europe and were expected to be worth over $1.3 billion in 2007; France and Germany are the biggest consumers.

Hallmarks of Cultural Creatives/LOHAS include:

• Passion for sustainable products and services and a concern for the planet

• Well informed shoppers who research and buy products carefully

• Redefining the meaning of success – they want lives that encompass personal fulfilment, social conscience and a better future for us all

• Create and support businesses that incorporate their values

• Insistent on authenticity at work, home and in business

• Want news stories that encompass the big picture and ‘good news’

• Focused strongly on holistic medicine and therapies

• Want natural foods, beauty products, clothing, lifestyle

• Buy more books and magazine and watch less television than others

• Strong consumers of the arts

• Strong interest in spirituality

Kimberley Paterson runs Soul PR – a specialist PR agency that works to help businesses and individuals within the wellbeing, lifestyle, green and ethical business sectors communicate their message to the public and media www.soulpr.com

Soul PR | Tel: +64 9 4244218 | Mob: 0273 454570 | Email: kimberley@soulpr.com
PO Box 485, Whangaparaoa, Auckland 0943