Green brands set for major sales growth

03 June 2010

LONDON: Sales of green brands are set to increase dramatically in Europe over the next five years, as these products enter the "mainstream" in a variety of different categories.

Kelkoo, the price comparison website, partnered with the Centre for Retail Research, the consultancy, to assess the probable evolution in demand for eco-friendly goods in the region.

They predicted that the revenues generated by brands with strong environmental credentials will rise from €10.3bn ($12.6bn; £8.6bn) in 2000 to €56bn in 2009 and €114bn in 2015, equivalent to a 5% share of all retail returns.

Such a shift will occur despite the fact these products cost an average of 46.4% more than generic alternatives at present, although this "green premium" has declined from 53.5% in 2006.

Prices for electrical goods achieving high standards of energy efficiency were found to be 70% greater than the norm in 2006, a gap that will shrink to 58% in 2010 and 47% in 2012.

Food and drink will post a decrease from 27.8% to 23% in the same timeframe, figures that will stand at 42% and 26.6% respectively for household goods and at 33.9% and 25% for apparel.

This differential is to remain most pronounced in the health and beauty segment, reaching 168% in 2010 measured against a total of 212% in 2006.

Organic food and drink lines and energy-efficient consumer electronics made up 60% of in-store green sales last year, with electrical appliances and stationery responsible for a similar share on the web.

The typical European household invested €369 in environmentally sound goods in 2009, peaking at €555 in Switzerland, compared with €413 in France, €364 in Germany, €352 in the UK and €315 in Spain.

Looking forward, this headline figure should expand to €751 per household in Europe by 2015, climbing to a high of €1,133 in Switzerland, €873 in Sweden and €843 in Denmark.

By this date, French households will also spend €841 a year in this area, although their counterparts in the UK will come in marginally below the average on €749.

The consumer electronics sector will derive €45.7bn from devices that utilise lower amounts of energy in 2015, with organic food and drink and other similar ranges on €27.7bn.

Consumers using e-commerce sites could currently save around 11% on purchases of non-food items that are regarded as performing particularly well in the area of sustainability, the Kelkoo/CRR report said.

Online sales of green products reached €3.4bn in 2009 and should leap to €10.6bn in 2015, meaning the web will be responsible for 9.3% of all expenditure directed towards brands with this type of positioning.

Elsewhere, shipments of hybrid cars are expected to improve from 70,849 units in 2009 to 245,000 vehicles in 2015, although this will still only represent 1.9% of private vehicle acquisitions.

These vehicles will bring in revenues of €6.2bn for automakers in five years time, an increase of 265% from 2009, boosted by falling prices and rising interest among drivers. 

Data sourced from Kelkoo; additional content by Warc staff