Customers in Asia Value Product Stewardship, Too
Al Iannuzzi
June 18, 2014
Research from the Natural Marketing Institute (2012) indicates 88 percent of the Chinese population and 84% of Indians prefer to buy products that are manufactured in a sustainable manner, compared to only 53 percent in the US. These two countries scored the highest of any polled! I didn't expect this - I anticipated that European countries would come out on top. Another survey question also saw China and India come out on top: 80 percent of Chinese and 79 percent of Indian survey respondents in India indicated they care about protecting the environment.
Like me, you may wonder what's driving these poll results, and after doing some thinking, I have a few ideas. Like many multinational companies, Johnson & Johnson has significant operations in emerging markets. When I first traveled to China, I noticed two things: an overwhelming amount of construction and obvious air pollution. There have also been many documented supply chain incidents in Southeast and South Central Asia, like poor manufacturing conditions for factory workers, and environmental management and quality issues. I believe that combined, these factors have helped raise awareness of sustainability issues among audiences in China, India and other emerging markets.
In addition, the middle class - predicted to grow by 2.5 billion globally in the next 15 years - is growing fast in China and India (Resource Revolution, Heck 2014). These consumers will be looking for the same products we have in the West and this growth is putting stress on resource availability and highlighting the need for products with a reduced footprint. As a result, consumers are expecting more from companies selling to them and are willing to reward brands that address their concerns about their environment.
Forward-thinking companies are becoming aware of these trends and are starting to see that they must do things differently and product design must reflect this reality. Because of the impending stresses on raw materials, Johnson & Johnson developed Earthwards®, our approach to developing products with the environment in mind. Conducting trainings on our approach is one of the main things I will be doing while in China.
The Earthwards® approach considers the demands of a global market place. We have a 4-step process which enables product developers and marketers to bring products to market that address customers' needs.
Step 1: First of all, every new product must undergo a regulatory review so that we can be in compliance with environmental regulations increasingly being developed in regions around the world, like in the Asia Pacific region, e.g. China REACH, KREACH, packaging legislation, etc.
Step 2: Next, key impact areas of our product categories are reviewed so we can understand the most important parts of the life cycle and reduce a product's footprint. We then encourage development teams to reduce impacts across seven impact areas, including material use, packaging, energy reduction, waste reduction, water reduction, positive social impact or benefit, and product innovation.
Step 3: If a product achieves at least three significant improvements across the seven impact areas, brand teams are rewarded for their innovations by Johnson & Johnson leadership and the product is added to our greener products catalog. Our marketing teams can benefit too because every Earthwards® product is reviewed by the Earthwards® Board, which is made up of NGOs and sustainability experts who help ensure environmental marketing claims are in accordance with applicable guidelines.
Step 4: Adapting to a resource constrained future is becoming an imperative. Product development is going to have to be done differently, especially to address the growing middle class in the Asia Pacific region. It is becoming more important than ever to respond to growing market pressures and bring greener products to customers in this region as well as the rest of the world.
For those of you with defined product stewardship programs, have you considered the importance of green products to customers outside of the United States? What is some of the feedback you've received from customers around the world?
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About the Author
Al Iannuzzi
Johnson & Johnson
Al Iannuzzi, Ph.D. is a Senior Director of Environment, Health, Safety and Sustainability for Johnson & Johnson, where he directs the global product stewardship and green marketing programs. He is the author of the books, "Greener Products: the Making & Marketing of Sustainable Brands" (CRC Press 2011) and "Industry Self-Regulation and Voluntary Environmental Compliance" (CRC Press, 2002), and has written numerous articles on product stewardship and environmental compliance.