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Sustainability was one of four mega-trends observed by the Clorox Co. in 2006 as potential business opportunities. Consumers' desire for greener products led the company to launch a new green cleaning brand, acquire Burt's Bees, and reposition the Brita brand to include a sustainability focus. "That's what really drove our focus on sustainability. It was all about growth," said Clorox CEO Don Krauss. "It was also about being on the right side of the angels."
In an interview with BSR Senior Vice President Eric Olson at the State of Green Business Forum in San Francisco Thursday, Knauss described the sustainability journey of a company better known for its bleach than its green cleaning products. Although the recession nearly halved sales of Green Works, the product line grew into a $100 million business within a year of its launch, a period during which it introduced many mainstream consumers to the concept of green cleaning. Clorox attributed the success to the company overcoming three common consumer complaints about green products: They don't work, are hard to find, and cost too much. Green Works' price premium has been declining steadily, from 20-25 percent when it launched in 2007, to 5-10 percent now. Clorox hopes to bring that premium down to zero. "The products that are explicitly green we want to get them to same prices as conventional products," Knauss said. "If we could give people a natural option at the same price that they would pay for a conventional cleaner, for example, we think we could explode the category and really make it part of the mainstream." Internally, the Green Works line and the purchase of Burt's Bees pushed the Oakland-based company to look at sustainability as a business imperative and to be more explicit about how the company is operated, Knauss said.
Clorox set goals to reduce greenhouse gas emissions, energy consumption and water use each by 10 percent by 2013, relative to 2007 baselines. Clorox also plans to cut waste by 20 percent. The company is on track to meet the goals, Knauss said, and may even reach the targets a year ahead of schedule. All told, the efforts save the company about $25 million a year. The company has also committed to green building and replaced its sales fleet with hybrids. Compensation is tied to sustainability performance through an Executive Scorecard. Even its philanthropy arm expanded its focus from K-12 education to improving families and childrens' wellness. Knauss challenged audience members to get out of their comfort zones when trying to embed sustainability into the company fabric, and to put their money where their mouths are by offering incentives for progress. Sustainability, he said, shouldn't be a one-off effort and has the potential to grow the bottom line. "You have to focus on sustainability as part of the overall strategy of the company," Knauss said. "It can't be a hobby."