At Seventh Generation, we seek to embed a mutual concern for sustainability in all of our collaborations, including our new partnerships with retailers and our expansion into new markets.

We were thrilled to see the dramatic increase in people buying healthy products in 2008. To accommodate this, most retailers took shelf space from their conventional products to offer a greater selection of natural products to their consumers. This creates a tremendous opportunity for Seventh Generation to entice these “newly green” shoppers to our brand and the authenticity we offer. The downside of this increased competition is that we lost a few products in some stores, such as our spray cleaners at Walgreen’s. Nevertheless, we applaud our industry’s emerging awareness of the benefits of healthy and environmentally responsible products. Not all of the competition was responsible, though; examples of greenwashing rose apace. Read the Inspired Protagonist blog on the issue of greenwashing: go/greenwashing.

There may be more people buying natural household products but consumers are also watching their pocketbooks as never before. Many shoppers are sticking with the natural brands they’ve been using but are no longer buying them at natural food stores where the perception (and sometimes reality) is that they are more expensive. They are buying the same brands at chain stores or online where they can buy in bulk. At Seventh Generation, we have to be very clear on describing the value our products provide, not only to consumers but to our retailers as well. While our products outsell conventional ones at some stores, in the near term, we won’t have the volume of sales that much larger companies have, so we’ve always needed to offer the retailer a higher profit margin to justify our shelf space. But we don’t think shoppers should have to pay more to do the right thing. The upside of the economic downturn is the edge it has given us in arguing for price parity with our retailers.

As a company, we grew up selling to natural food stores whose shoppers are in tune with our commitment to natural, safe products and healthy homes. These stores continue to be extremely important to us with their emphasis on in-store education and their commitment to sustainability. We want to do everything we can, such as experimenting with pricing, to nurture our relationships in the natural food arena during these tough economic times.

In response to the shifting needs of our consumers, we now sell our products through a much broader array of types of stores and venues (called channels). We don’t think our consumers should have to search for us; we want to make our products available where they shop most frequently. This shift in channels exponentially increased the demands on our organization to develop the sophistication and competence to meet the needs of so many different types of stores. 2008 marked a big leap in our ability to play on so many fields at once.

We seek deep mutual connections with retail partners that embrace sustainability in their own businesses. Seventh Generation Sales Team Leader Bill McConnell put it this way, “If retailers embrace green in general, we can build a relationship from there. I don’t try to sell to people if they’re not ready to be there. I try to meet my customers’ needs by engaging them, not create needs by selling them on something.”

Our relationship with Target this past year exemplified the way that sustainability is central to our partnerships. We had sold some products in a few of their stores but we made a top-level commitment to each other this past year. We are now selling our key products in all of their stores and we also developed a unique water blossom scent for the laundry detergent they sell. Our conversations didn’t just focus on quantities and sizes but also explored ways we might be able to work together to improve the sustainability of both of our ventures.

Consumers are also likely to find a much greater range of grocery stores carrying our products as we forged deeper relationships with several retailers. The small Pennsylvania-based grocery chain Weis’s Markets launched us with a bang leading to high per-store sales. In North Carolina, our broker partner Mark Morsillo took the initiative to set up a display of Seventh Generation products in a Harris Teeter store that caught the eye of a top manager. They immediately signed on for 15 of our products and have since come back for 15 more, along with commitments on promotion and category margin requirements so that we achieve competitive pricing versus leading conventional brands.

A Seventh Generation display from Anderson Air Force Base in Guam.

Sales of Seventh Generation products in military commissaries worldwide increased 241% in 2008. We are focusing on understanding the needs of our military consumers who are generally young and watching expenses. The average tour of duty is three years and we hope to be able to serve military men and women well so that when they are discharged, they will look for our products in civilian life. We also hope to supply commissaries with diapers in 2009.

Internet Sales: New moms concerned about the products they use on their babies’ sensitive skin are a big reason our internet sales grew 115% this past year. Parents love the convenience of having a case of chlorine-free diapers delivered to their doors. Etailers such as Amazon have subscription programs offering loyal shoppers deep discounts for monthly shipments. In a recent snapshot of consumer sales from one of our etailers, we found that if a consumer purchasing a SVG product also purchases a second product in the same shopping cart, 92% of the time it is another Seventh Generation product.

“The internet isn’t one size fits all,” says Betsy McGinn, Sales Team Leader. “Our coupons don’t work online and there are very different marketing needs. It’s a fun and interesting challenge to serve our internet partners. That’s why I wanted to take it on.” Unique to internet sales are the convenient consumer comment forums. Looking for a natural diaper? You can easily see how shoppers rated each available brand and you can read the unedited diatribes of anyone who has had a bad experience.

Unfortunately, some Seventh Generation internet buyers had negative experiences. The problem? Our liquid cleaning products occasionally leaked en-route, sometimes ruining the other items in the shipping box, as well. The shipping materials that so effectively transport cases of our products to stores were not performing for shipments of odd batches of different items going directly to homes.

This was clearly unacceptable and, we’re happy to say, no longer the case for customers ordering our special internet case packs, although work continues on the packaging for individual unit orders.

In 2008, we redesigned our packaging specifically for the internet. We put fewer bottles in a box and developed sealed caps for our liquid cleaners. For spray cleaner orders, the nozzle is now packed separately in the box. Then we redesigned the entire box system by increasing the strength, integrity and thickness of the cardboard and by improving our inserts. Our next step will be to improve the closure for our laundry detergent bottles. With our liquid transport issues mostly addressed, we can approach our internet sales more confidently in 2009. We will now be partnering on couponing and cross-category promotion so diaper buyers will have a chance to try our other products.

Cory Tower, Director of Logistics at drugstore.com, described his company’s experience offering Seventh Generation cleaning products:

We had very regular feedback from our customers that they were frustrated with our inability to get Seventh Generation products to them in good condition. They have a very loyal customer following, but eventually they would give up. While we still have challenges with some of the products (specifically the laundry soap), we have seen dramatic improvement in many of the products they changed.

One of the main value propositions we offer our customers is convenience. When a customer has to get an order replaced, we lose that. Probably the biggest improvement in feedback is that we have less of it. As is typical in retail, customers are far more likely to contact you when something is wrong than to tell you something is right. This is true not only of our customer, but also our carriers. We used to hear complaints regularly from both parties and I do not hear them anymore. Working with Seventh Generation to resolve this was fabulous. From the beginning they treated the issue as a joint problem, one for both parties to corroborate on. This has been very different from other vendors we worked with. I was impressed to see that they take their brand seriously. Being environmentally sound is obviously more than just a tag line for them. They were genuinely concerned with the impact that their products’ leaking could have on the environment, not just both companies’ bottom lines. I was also impressed with their desire to learn. When I offered to show them the challenges of the direct-to-consumer, small parcel environment, they eagerly took me up on it.

Drugstore.com is a big believer in being environmentally friendly similar to Seventh Generation. We have a wide selection of green and natural products. Being able to offer brands like Seventh Generation fits right in with that strategy. It is what our customer base is looking for.

Canada

To all of you in Canada who called or wrote to say you had trouble finding our products or couldn’t get our coupons to work, we heard you!

We made the decision in 2008 to commit to providing a full suite of services to our friends up north. Previously, we sold a variety of our products in Canada, mostly in the west. We had only enough French on the labels to sell products in certain provinces of the country; they couldn’t be sold to the residents of Quebec, just an hour to our north. Without meeting the more rigorous Quebecois labeling requirements, stores that sold nationally wouldn’t take our products. Even where we did sell, we did not have coupons or the most relevant support material available. Our savings statements read “If every household in the U.S…” and didn’t include Canada at all.

Our Canadian consumers deserve the highest level of support our company can provide. In 2008, we created fully bilingual labels for 22 cleaning, laundry and baby care products for sale in Canada. This was a daunting task as it coincided with our decision to expand the information on our labels using a three-part back label. We also posted MSDS information for all of our ingredients in French on our website and we developed specifically Canadian savings statements in both French and English. Our efforts garnered a 61 percent increase in sales in 2008 and five national retailers signed on to sell our products.

In 2009, our Canadian website will be online with French and English sections, and we will offer Canadian coupons and opportunities to join the 7Gen nation. Fifteen more fully bilingual products will debut, giving us the depth we need to operate competitively. We’ll also be participating in consumer shows and launching an aggressive media campaign. Our Canadian consumers are not carbon copies of our American consumers. They want different things and have different questions. To meet their needs, we will be hiring a Canadian sales director who will better understand and anticipate our Canadian shoppers’ needs.

Maggie Jones, a Broker Partner from Indigo Marketing in Vancouver, BC, talks about her experience as a GIVE presenter:

When I was finally ready to do my first presentation of the 7th Generation GIVE materials, I was nervous and worried about how the material I was offering would be received. I knew that I had something of great value to offer the staff of my stores but I didn’t feel confident about my ability to facilitate the session.

I jumped in with both feet and what an incredible surprise I had. The staff members were not only hungry for the information and knowledge that I had to offer, but they also valued the opportunity to speak about the 7th Generation line and their experiences both with customers and in their own lives.

I knew that Health and Body Care staff are constantly given trainings, in-services and extra information that help them to do their jobs, but grocery staff feel largely ignored and they were so excited and grateful to participate in my GIVE sessions. Most commented that the training session made them feel valued as staff members and all were very excited and enthused to participate.

As I have become more confident, I realized that I am a guide, a facilitator, and that the stories, experiences and information that the staff have shared with me as a result of the GIVE sessions bring great value and meaning to my work with 7th Generation.

I have also been quite tickled by the positive comments received by staff on my later store visits and have been approached by staff members who were not able to participate at the time of my session as to when I will be back to present to them!

I am grateful for the opportunity to share my GIVE story and I do hope that it encourages other reps to just jump in!

Gregor Barnum thanks for your thoughts - we are only focusing on our major customers in the coming months and will definitely keep you in mind as we grow this program. Gregor 17 August 2009

stephanie schlecht Susan, Sounds like you are creating change agents through the GIVE program. Is Seventh Generation planning on rolling out a similar program for the independent office supply channel? If you are, you have a partner in Give Something Back Business Products. There are many opportunities for behavior change through education in this channel. We see it with our customers. Folks want to bring their values to work. There is nothing more disturbing than the smell of harsh cleaning chemicals all over one's cubical. Stephanie Schlecht Director of Sustainability http://jm.ly/xNob3F 14 August 2009