Market News

 March 07, 2019
It's not cheap being a green consumer

 If you want to be an eco-friendly consumer, you don't have to look hard to find companies that will help you swap everyday items made from fossil fuels for greener alternatives. But the average American just can't afford them.

As more municipalities move to rid the world of the ubiquitous plastic straw (a super-tiny component of plastic fouling the planet's oceans), the lifestyle consumer market is filling up with reusable water bottles that will help you kick the plastic bottle habit; metal straws that eliminate your reliance on the Big Oil version; and even duvet covers that will leave a smaller footprint than the down, feather or synthetic fiber-filled comforter you've been sleeping with for years. But being green comes at a cost.

While you could spend $2 on a plastic water bottle at the grocery store, companies such as LARQ---a company that makes stainless-steel water bottles that use a UV-C light in the cap to clean and purify your water---is banking you'll pay $95 for its product. Sure, you could make that money back in a few weeks, depending on how much you hydrate. But then there's the complicating factor of convenience---not having to wash or carry a bulky bottle---both of which often militate against mass adoption.

LARQ Chief Executive Officer Justin Wang said that the price point for his water bottle isn't high, considering the technology involved. The bottle's UV-C light "neutralizes up to 99.9999% of harmful, odor-causing germs," according to the company's website. The bottle is meant to be self-cleaning because of the cap, and the light activates every two hours.

With a wide range of options in the market, the reusable water bottle industry is expected to reach $10.4 billion by 2025, according to Transparency Market Research.

There is an underlying benefit to these bottles. People in developing countries could make use of self-cleaning water bottles, because they may provide consistent access to clean water. But the company's current price isn't realistic for those populations, Wang conceded. He said the company is working on a new model that will be scalable for developing countries.

It's arguable that the path to mass adoption began with straws, specifically when companies such as Starbucks and McDonald's vowed to phase them out following increased public awareness of plastic contamination across the world's oceans. In January, KFC went further, pledging that all plastic-based consumer packaging will be "recoverable or reusable" by 2025. Environmentalists, however, are skeptical of what they sometimes call corporate "greenwashing," noting that straws account for just 0.03 percent of the 8 million metric tons of plastic that enter oceans each year.

But as far as individual consumers are concerned, the controversy may have been the straw that broke the, well, you know.

The green marketplace is made up of more than just water bottles, straws and comforters. Practically any lifestyle product you can think of has a more sustainable alternative. Energy company NRG even made a pair of sneakers from power-plant waste. (Insert carbon footprint joke here.) A section of the U.S. Environmental Protection Agency's website has "recommendations of standards and ecolabels for federal green purchasing."

There are green blogs and green influencers such as Bea Johnson (@zerowastehome) and Lauren Singer (@trashisfortossers), who live carbon neutral lives and document it on Instagram. You can sort Kickstarter projects by "environmental" to find sustainable products that are in the works, like kelp jerky or the Grove Ecosystem, which helps you grow fresh food in your home. And for investors, there are plenty of options for putting your money in non-planet-killing securities or exchange-traded funds.

But as eco-friendly beauty, clothing and household products vye for consumer dollars, corporate America has sensed a moneymaking opportunity---not unlike the higher prices you pay for that allegedly organic or natural, hormone-free food you crave. It's no coincidence that it costs $20 to use reusable beeswax instead of plastic wrap to keep your food fresh, and you can even buy shoes that are completely made from recycled plastic---but they'll cost you $145 a pair.

Green entrepreneurs say it's unreasonable to expect them to charge cut-rate prices when demand remains low. Emma Rose Cohen, chief executive of FinalStraw, said the personal green industry starts with the lowly straw but it doesn't end there.

Cohen views her straw, which initially sold for $29.50 but is now on sale for $24.50, as a conversation piece that inspires consumers to be more environmentally conscious.

"The straw is gateway plastic, so it's basically getting its foot in the door to speak to larger issues around plastic pollution, around waste consumption and ultimately, around source reduction, because that is the goal," Cohen said. "If we never use the waste to begin with, then it will not end up polluting the earth and our oceans. Beyond the pollution aspect, it's just wasteful. These are nonrenewable resources that we are consuming at a rapid rate."

Cohen recognizes that $24.50 isn't cheap. "We get it," the company says on its website. "This is a consumer-based product that puts the responsibility on the individual."

Other lifestyle companies, such as Buffy, a green bedding company, are looking to create buzz in the sustainable consumer space. With nonsustainable comforters ranging in price from $20 to $200, Buffy CEO Leo Wang is dominating the sustainable bedding marketplace. His comforter ranges in price from $120 for a twin bed to $190 for a California king-sized bed.

So what exactly makes the Buffy comforter eco-friendly? The outer shell is made from eucalyptus fibers, which require 90 percent less water than cotton, and the inside is composed of recycled plastic bottles.

According to Wang, approximately 50 bottles are recycled in every Buffy comforter that's purchased. When you tie that to the company's current sales numbers, Buffy has used approximately 10 million recycled bottles.

With the average consumer replacing comforters every five to eight years, Wang also wanted to focus on creating a longer life cycle for the product. "We've tried to engineer the Buffy materials so they last at least a decade, if not more," he said.

So how do companies make it more accessible for consumers to go green? Demand, as usual.

"Bringing down the prices of eco-friendly products will come from massively growing demand for eco-friendly products," said Joe Sanberg, co-founder of Aspiration, a financial firm that lends to sustainable companies. "The more we can make it easy for consumers to pick eco-friendly products, the more there will be a demand for those eco-friendly products and the more the prices for those products will fall."

Sanberg touched on the fact that this shift will require "a heightened consciousness, which involves making people aware of the power of their money."

Venture capitalist and impact investor Christine Lu said she recognizes that it's unaffordable for the average American to be a sustainable consumer right now. "Inequality makes it expensive for people to meet their basic needs, and they stay reliant on mass consumption because it's affordable," she said. As an impact investor, Lu said it's challenging to find companies that are sustainable from a financial perspective, too. "Social impact has to scale the way big startups do," she said. "It's not easy."

The paradigm shift will come from an understanding that being more environmentally conscious doesn't mean giving up everything you own for a more sustainable version, Sanberg said. "Don't think about it as an either-or," he explained. "It's a broad spectrum, and there's all kinds of things you can do to be more sustainable."