Values In Aisle Six

I reached under the kitchen sink on Friday to grab dishwashing liquid to take care of a couple of leftover wine glasses from Thanksgiving. I was a surprised to find a bottle of Seventh Generation rather than Palmolive or Dawn.

Seventh Generation, Inc. is a company, which makes household and personal care products that are healthy and safe for the environment. It was founded in Vermont almost 20 years ago -- way before environmental sustainability was fashionable in the suburbs. The name of the company comes from an Iroquois belief that "in our every deliberation, we must consider the impact of our decisions on the next seven generations".

I wasn’t surprised that my wife embeds values in her household shopping habits – she is a karma capitalist at heart too. Rather, my surprise had more to do with Seventh Generation's limited distribution. Historically, the brand was only available by mail order or in health food stores and Whole Foods. Now, it seems that Seventh Generation brands are available at Target (where my wife found the dishwashing liquid) and supermarkets such as Shoprite.

Do you know what the biggest threat to Whole Foods is? It is certainly not a slow down in the general wellness/earth-friendly marketplace – especially with categories such as organic foods growing at 15% a year. The biggest threat to Whole Foods is that it loses its point of differentiation versus the supermarkets and chains, which are more conveniently located in your town.

Mass retailers such as Wal-Mart, Target, Kroger and so on are eyeing Whole Foods’ success and hoping to copy key components of its business model. That’s what happened to Starbucks when McDonalds, Dunkin Donuts and just about every neighborhood café improved its coffee service to compete. Keeping abreast of key growth segments and copying successful competitors is a matter of staying in business.

Let's get back to Seventh Generation. Here is a company that quietly built its franchise over the last 20 years. Visit their website to find our more about the company, their focus on sustainability and full range of their products. link

This is a quiet company no more. Last year, revenues grow by 28% and it moved into a fancy new headquarters – good for them. Like most commercial enterprises, the owners of Seventh Generation want and need to grow – which expanding their product line and broadening their distribution are essential moves. This is not only about growth – it is about survival. Just as Target and Kroger’s are watching Whole Foods, Procter & Gamble, Colgate and Unilever are watching Seventh Generation. And if these packaged good giants can’t reinvent their product lines fast enough, they’ll transform them through acquisition. This is why Colgate purchased Tom's of Maine -- a natural ingredients, personal care products company.

Don’t be put off if large companies are hitching a ride on the latest trend – the LOHAS Market, which stands for Lifestyles of Health And Sustainability and represents 50 million adult consumers and close to $300 billion in spending. This is great news for the values-oriented consumer. The net result for you will be more wellness and earth friendly brands to choose from at lower prices and available in more places.

And, you need not be concerned about the prospects for Seventh Generation. The company seems to be superbly managed and may look to go public to raise expansion funds (why not, if Lululemon is worth billions!) or be acquired like Tom’s of Maine or Burt’s Bees. In any scenario, this will no longer be a sleepy Vermont based company.

That’s good news for the earth and all of us inhabiting it too.